Tag: Stock pick

The ASX blue-chip share space is a compelling hunting ground to find businesses with a very pleasing dividend yield.

The larger businesses on the ASX aren’t usually priced for a lot of growth, meaning they have a relatively lower price-earnings (P/E) ratio and this boosts the dividend yield.

Additionally, large businesses tend to have less reason to hang onto as much cash for growth as smaller, growing companies. A more generous dividend payout ratio can also lead to a higher dividend yield.

So, let’s dive into two businesses that offer investors significantly higher dividend yields than the market.

Medibank Private Ltd (ASX: MPL)

Medibank is the largest private health insurer in Australia, with the Medibank and ahm brands. It also has an expanding Medibank Health division, which includes primary care following acquisitions. Medibank Health also includes community-based services and acute home health.

Healthcare is a defensive sector that can provide investors with resilient earnings and that means it can provide a reliable dividend. The business noted in a recent update that it has proven growth through cycles, delivered customer and shareholder value, while navigating headwinds.

Medibank also noted that APRA’s quarterly private health insurance statistics showed industry growth of 2.1% in the 12 months to 31 December 2025. Increasing participation in younger cohorts is supporting ongoing affordability and long-term industry sustainability.

The ASX blue-chip share may also benefit from Australia’s ageing demographic and growing population.

Between the FY15 and FY26 half-year results, it increased its annual payout every year aside from FY20, which was impacted by COVID-19. It has a great track record of regular dividend growth.

According to the projection on CMC Invest, the business is forecast to pay an annual dividend per share of 19 cents for FY26. That translates into a grossed-up dividend yield of 5.6%. including franking credits, at the time of writing.

WAM Leaders Ltd (ASX: WLE)

This is a listed investment company (LIC) run by Wilson Asset Management (WAM). It aims to invest in the most attractive, larger businesses on the ASX.

By investing in ASX blue-chip shares, its portfolio can be more resilient than ASX growth shares.

Some of the largest 20 positions in the WAM Leaders portfolio includes ANZ Group Holdings Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), Goodman Group (ASX: GMG), Macquarie Group Ltd (ASX: MQG), National Australia Bank Ltd (ASX: NAB), REA Group Ltd (ASX: REA), Rio Tinto Ltd (ASX: RIO), Westpac Banking Corp (ASX: WBC), Woodside Energy Group Ltd (ASX: WDS), and Wesfarmers Ltd (ASX: WES).

As you can see, the LIC’s portfolio has a significant focus on ASX blue-chip shares.

Its portfolio outperformed the S&P/ASX 200 Accumulation Index (ASX: XJOA) since inception in May 2016, with a gross return of 11.9% per year (before fees, expenses and taxes) compared to the index return of 9% per year. Of course, past outperformance is not a guarantee of future performance.

WAM Leaders has increased its annual dividend every year between FY17 and FY25. It expects to increase its FY26 annual payout by 2.1% to 9.6 cents per share. That translates into a potential grossed-up dividend yield of 10.4%, including franking credits, at the time of writing.

The post 2 ASX blue-chip shares offering big dividend yields appeared first on The Motley Fool Australia.

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• 2 ASX shares with dividend yields above 8%

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, Macquarie Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended BHP Group, Goodman Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Wesfarmers Ltd (ASX: WES) shares have pulled back around 17% from their 52-week high.

The retail and industrial conglomerate is trading around $78.48 at the time of writing, down from a high of $95.18.

That is still not what I would call a bargain price. Wesfarmers remains a high-quality ASX 200 share, and the market usually prices it accordingly.

But I think the pullback has made the risk/reward more attractive for long-term investors.

A collection of strong businesses

One of the main reasons I like Wesfarmers is that it is not dependent on just one business.

Bunnings remains the most important part of the group and continues to be one of the best retail businesses in Australia. Its scale, brand strength, trade exposure, and store network give it a powerful position in home improvement.

But I also think the wider group deserves attention.

Kmart has become a very strong value retailer, which is useful in an environment where households are watching their budgets amid rising interest rates. Officeworks gives Wesfarmers exposure to business, education, technology, and everyday office needs. Priceline adds a health and beauty angle, while the group’s digital investments, including OnePass, could help deepen customer relationships across several brands.

There is also the longer-term opportunity from Mt Holland lithium, though this part of the business carries commodity and execution risks.

What I like is that Wesfarmers has several ways to create value over time. Some will perform better than others at different points in the cycle, but the group has shown a long history of owning good businesses, improving them, and continuing to invest where it sees opportunity.

The numbers still support the case

According to CommSec, the consensus estimate is for Wesfarmers to generate earnings per share of $2.55 in FY26 and $2.74 in FY27.

Based on the current share price, that puts the stock on around 31 times FY26 earnings and 29 times FY27 earnings.

That is not cheap. However, I think Wesfarmers can justify a premium valuation because of the quality of its assets, the strength of its brands, and its long record of disciplined management.

The dividend outlook also adds to the appeal.

CommSec’s consensus estimates suggest Wesfarmers could pay fully-franked dividends per share of $2.16 in FY26 and $2.33 in FY27.

Based on the current share price, that would imply forward dividend yields of roughly 2.8% and 3%, respectively.

Those yields are not huge, but the franking credits improve the income story for eligible investors. More importantly, I think the dividend is backed by a business with durable earnings and a long-term growth mindset.

Why I’d buy after the pullback

I would not buy Wesfarmers expecting a quick rebound just because the share price has fallen.

The stock can still come under pressure if consumer spending weakens, margins disappoint, or the market becomes less willing to pay premium multiples.

But I do think the recent fall provides a better entry point into one of the ASX’s highest-quality companies.

For me, the attraction is the combination of resilience and optionality. Wesfarmers has defensive qualities through everyday retail demand, but it also has growth avenues through Kmart, digital initiatives, healthcare, productivity improvements, and selective industrial exposure.

That mix is hard to find.

Foolish Takeaway

A 17% pullback does not suddenly make Wesfarmers a cheap ASX share.

But it does make a great business more interesting.

I think investors often do well when they buy high-quality companies during periods when expectations have cooled a little. Wesfarmers still has the brands, balance sheet strength, management discipline, and growth options that I want in a long-term holding.

At around $78, I would be happy to buy Wesfarmers shares and hold them for the years ahead.

The post Down 17%: Why I’d buy and hold Wesfarmers shares appeared first on The Motley Fool Australia.

More reading

• With no savings at 40, I’d follow Warren Buffett’s approach to build wealth
• I’d aim for $1 million in retirement buying just 10 ASX 200 shares
• 5 steps to bring in $1,000 per month in passive income
• 6 ASX 200 shares just upgraded by the experts
• Why Wesfarmers shares remain the gold standard of ASX retail investing

Motley Fool contributor Grace Alvino has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A $1,000 lump sum can be invested in a few different ways.

I do not think there is one perfect answer for every investor. The best choice depends on what someone wants from their portfolio.

Some investors may want income. Others may want long-term growth. Some may prefer the simplicity of an exchange-traded fund (ETF) instead of choosing an individual company.

With that in mind, here are three ASX options I would consider today.

Transurban Group (ASX: TCL)

If I were investing for passive income, Transurban would be one ASX share I would look at closely.

The company owns and operates toll road assets in major cities across Australia and North America. These are long-life infrastructure assets that can generate cash flows over many years.

I like Transurban because its roads are hard to replicate. Building major urban toll roads is expensive, politically difficult, and usually takes many years. That gives the company a strong position in the markets where it operates.

It also has some inflation-linked qualities through its tolling arrangements. That can be useful for investors looking for income that has the potential to grow over time.

WiseTech Global Ltd (ASX: WTC)

If I were investing for growth, I would consider WiseTech.

The logistics software company has had a painful share price fall from its highs, but I still think the long-term business is very attractive.

WiseTech’s CargoWise platform is used by freight forwarders and logistics providers to manage complex global trade workflows. This is not a simple app that customers can casually replace. It sits inside important daily processes involving customs, documentation, compliance, shipments, and supply chains.

That is one reason I like the business. Global trade is complicated, and I do not think that complexity is going away. If anything, global trade could get more complex in the future.

I also think artificial intelligence (AI) could become useful for WiseTech. Logistics still involves a lot of repetitive data entry, document handling, and exception management. If AI helps customers save time and reduce errors, WiseTech’s platform could become even more important.

VanEck Morningstar Wide Moat AUD ETF (ASX: MOAT)

If I wanted an ETF, I would consider the VanEck Morningstar Wide Moat AUD ETF.

The MOAT ETF gives investors exposure to US companies that have sustainable competitive advantages and are trading at attractive valuations.

I like that combination. It is not just buying the biggest companies. It is trying to own businesses with durable advantages, such as strong brands, cost advantages, network effects, or high switching costs.

That can be a useful way to invest for the long term without needing to pick individual US shares and mirrors the style of investing used by Warren Buffett.

Foolish takeaway

A $1,000 lump sum can be used in different ways depending on the job an investor wants it to do.

That is the key point for me. I would start by asking whether I want income, growth, or a diversified ETF.

Once that is clear, the choice becomes much easier. For my money, these three options each offer a sensible way to put fresh capital to work today.

The post ASX shares to buy now: How I’d invest a $1,000 lump sum appeared first on The Motley Fool Australia.

More reading

• I’d aim for $1 million in retirement buying just 10 ASX 200 shares
• 3 defensive ASX dividend shares I’d buy and hold
• 3 of the best ASX dividend shares to buy in June
• MOAT vs QUAL: Which quality ASX ETF would I buy today?
• WiseTech shares crash 66% in 12 months. What’s next?

Motley Fool contributor Grace Alvino has positions in Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and WiseTech Global. The Motley Fool Australia has positions in and has recommended Transurban Group and WiseTech Global. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Reaching 40 with no savings can feel confronting.

But it is not the end of the road. In fact, it can be the point where better habits, clearer priorities, and a long-term investment plan start to make a real difference.

If I were in that position, I would not try to get rich quickly. I would follow principles often associated with Warren Buffett: spend less than I earn, invest consistently, focus on quality, and let compounding work over time.

Start with the savings habit

The first step would be to create room for regular investing.

That might mean cutting unnecessary expenses, avoiding lifestyle creep, or directing pay rises and bonuses straight into investments. The amount does not need to be huge at the start.

What matters most is building the habit.

An investor who can put $500 a month into the share market is putting $6,000 a year to work. Over 20 years, that is $120,000 of contributions before any investment returns are included.

Once the habit is established, the numbers can become more powerful.

Invest like a business owner

Warren Buffett does not treat shares as flashing prices on a screen. He thinks like a business owner.

That is a useful mindset for anyone starting at 40. Instead of chasing hot tips, the focus should be on owning quality businesses with strong brands, durable earnings, and the ability to grow over many years.

On the ASX, that could mean looking at high-quality companies such as Wesfarmers Ltd (ASX: WES), REA Group Ltd (ASX: REA), or Macquarie Group Ltd (ASX: MQG).

It could also mean using broad-based ASX exchange traded funds (ETFs) to build instant diversification. This can reduce the risk of relying too heavily on one company or sector.

Let compounding do the heavy lifting

The real magic comes from staying invested.

If an investor put $500 a month into the share market and achieved an average annual return of 10%, they could build a portfolio worth more than $360,000 after 20 years.

That return is broadly in line with long-term share market averages, but it is not guaranteed. Some years will be strong, while others could disappoint.

The key is to keep going through the cycle. Selling in a panic after market falls can interrupt compounding just when future returns may become more attractive.

Foolish takeaway

Starting at 40 still leaves plenty of time.

An investor may have 20, 25, or even 30 years to build wealth before and during retirement. That is long enough for regular contributions and reinvested dividends to make a meaningful difference.

The Buffett approach is not exciting in the short term. It is built on patience, discipline, and sensible decisions repeated again and again.

For someone with no savings at 40, that may be just what is needed.

The post With no savings at 40, I’d follow Warren Buffett’s approach to build wealth appeared first on The Motley Fool Australia.

More reading

• CBA shares vs Macquarie shares: Which ASX financial stock would I buy?
• I’d aim for $1 million in retirement buying just 10 ASX 200 shares
• 5 steps to bring in $1,000 per month in passive income
• 2 ASX 200 shares that could dominate the next decade
• Buy, hold, sell: ANZ, Macquarie, Westpac shares

Motley Fool contributor James Mickleboro has positions in REA Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Some broker price targets are worth a closer look, especially when they point to material upside and the investment case makes sense.

That is how I see the two ASX 200 shares in this article.

Morgans has buy recommendations on both, and its price targets suggest one could rise by more than 20% and the other by more than 50% from current levels.

I also rate both as buys.

James Hardie Industries plc (ASX: JHX)

The first ASX 200 share is James Hardie.

The building products giant is trading around $31.80 at the time of writing, but Morgans has a buy rating and a $39 price target on the stock.

That implies potential upside of over 20%.

I think James Hardie is interesting because it gives investors exposure to a high-quality building materials business at a time when housing conditions are still subdued.

That might sound strange at first. Weak housing markets can put pressure on demand, volumes, and investor confidence. But I think this is where the long-term opportunity could be forming.

Morgans noted that James Hardie’s FY26 result was in line with consensus and slightly ahead of prior guidance. The broker also pointed out that management is not assuming a market recovery in FY27, with affordability pressures and lower builder activity still weighing on conditions.

That is important to me because it means the buy case is not built on a sudden housing rebound.

Instead, FY27 appears to be more about margin recovery, cash generation, and synergies. If James Hardie can improve the business while the broader market remains soft, it could be well placed when conditions eventually improve.

There are risks. Housing can stay weak for longer than expected, and integration or synergy delivery can disappoint. But I like the idea of buying a strong building products business before the cycle feels comfortable again.

Guzman Y Gomez Ltd (ASX: GYG)

The second ASX 200 share is Guzman Y Gomez.

The fast-food company is trading around $19.42 at the time of writing, and Morgans has upgraded its price target to $29.40 this month.

That suggests potential upside of approximately 50%.

This is a very different opportunity to James Hardie. Guzman Y Gomez is a growth stock, and investor sentiment can move quickly when expectations change.

But I think the latest development is a positive one.

Morgans highlighted the company’s decision to exit its US operations immediately. The broker viewed this as a positive catalyst because it removes a business that was expected to generate a significant underlying EBITDA loss in FY26 and require more capital than the potential returns could justify.

I think that makes sense.

The US may have offered long-term optionality, but optionality is not always valuable if it consumes too much money and management attention. By stepping away, Guzman Y Gomez can simplify the story and focus more clearly on the Australian business, where performance appears to be tracking well.

Morgans also noted that removing the US losses results in material upgrades to its EBITDA and NPAT forecasts.

That could be powerful for sentiment. Growth companies are often rewarded when the market gets more confidence in the quality of earnings, not just the size of the store rollout opportunity.

Guzman Y Gomez still needs to execute. Competition in quick-service restaurants is high, and the valuation will likely remain sensitive to growth expectations. But I like the cleaner focus and the potential for the Australian business to keep scaling.

Foolish Takeaway

A broker price target is not a guarantee, and investors should never treat one as certainty.

But I think these two buy calls are interesting because the logic is not just about hoping for better market conditions.

James Hardie could benefit from internal improvements while housing remains subdued. Guzman Y Gomez has made a decision that may improve earnings quality and simplify its growth story.

Both shares come with different risks, but I think each has a credible path to being worth more. If Morgans is right, the upside could be significant.

The post Why these ASX 200 shares could shoot 20% and 50% higher appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Grace Alvino has positions in Guzman Y Gomez. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the hardest parts of investing is deciding when to start.

When the market is rising, it can feel too expensive. When the market is falling, it can feel too risky. And when the market is moving sideways, it can be tempting to wait for a clearer signal.

I understand that feeling. But I also think waiting for the perfect moment can leave investors stuck on the sidelines for too long.

Here’s how I would invest in ASX shares if I were worried about buying at the wrong time.

Start with the right question

I would not begin by asking whether the market will be higher or lower next month.

I do not think anyone can answer that consistently.

Instead, I would ask whether I am buying something I would be happy to own for years. That changes the decision.

A share price can look expensive one month and cheaper the next. But if the business keeps growing earnings, improving its position, and returning cash to shareholders over time, the short-term entry point becomes less important.

That does not mean valuation should be ignored. It just means I would focus more on business quality and time horizon than trying to pick the exact bottom.

Put money to work gradually

If I were nervous about investing all at once, I would spread my buying over time.

That could mean investing part of the money now, then adding more over the next few months. This approach reduces the pressure to make one perfect decision.

If the market falls, I still have money available to invest at lower prices. If the market rises, I have at least started.

I like this because it turns investing into a process rather than a single big call.

It can also help emotionally. Many investors make poor decisions because they put too much importance on one entry price. A gradual approach can make it easier to stay calm.

Focus on businesses that can handle uncertainty

When market conditions feel uncertain, I would become more selective.

I would look for ASX shares with strong balance sheets, durable earnings, capable management, and products or services that customers keep using through different parts of the cycle.

That could include high-quality blue chips like Macquarie Group Ltd (ASX: MQG), defensive businesses, global growth companies, or broad-exposure exchange-traded funds (ETFs).

For example, an investor looking for broad exposure could consider an ETF such as the Vanguard MSCI Index International Shares ETF (ASX: VGS). It provides access to large global companies across developed markets and can add exposure to areas that are harder to access through the ASX alone, including global healthcare, technology, software, luxury goods, and consumer platforms.

For individual shares, I would focus on businesses where the long-term opportunity is still clear, even if the share price moves around in the short term.

Accept that volatility is normal

I would also remind myself that volatility is not a sign that the strategy is broken.

Share prices move every day. Sometimes they move for good reasons. Sometimes they move because investors are nervous, interest rate expectations change, or global headlines dominate the market.

That is part of investing. The goal is not to avoid every fall. The goal is to own investments that can recover, grow, and become more valuable over time.

This is where patience matters. If I buy a quality ASX share and it falls 10% soon after, that does not automatically mean I made a mistake. It may simply mean the market is doing what markets do.

Foolish Takeaway

I do not think investors need to wait until they feel completely confident before buying ASX shares.

That day may never arrive.

A better approach, in my view, is to start carefully, invest gradually, and focus on quality. It may not feel as dramatic as trying to call the bottom, but it can be much easier to stick with.

The market will always give investors reasons to hesitate. The real advantage comes from having a plan that works even when the timing feels uncertain.

The post How to invest in ASX shares when you’re worried about buying at the wrong time appeared first on The Motley Fool Australia.

More reading

• With no savings at 40, I’d follow Warren Buffett’s approach to build wealth
• Why these ASX 200 shares could shoot 20% and 50% higher
• If I invest $8,000 in ANZ shares, how much passive income will I receive in 2027?
• 3 reasons I would buy Qantas shares under $10
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ANZ Group Holdings Ltd (ASX: ANZ) shares may be one of the most popular dividend options because of the company’s perceived stability and dividend yield.

The ASX bank share typically has a higher dividend yield than competitors like Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG), and a similar yield to names like National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

Thankfully, ANZ’s dividend has recovered significantly since the COVID-hit year of 2020.

The recent FY26 half-year result was another example of the ASX bank’s share stability for shareholders.

In that HY26 result, ANZ maintained its interim dividend per share at 83 cents following the bank’s underlying cash profit before provision growth of 12%, while the underlying cash profit grew 14%.

In this article, we’re going to look at the annual FY27 dividend, which will be paid in 2027.

2027 dividend projection for owners of ANZ shares

According to the projection on CMC Invest, the ASX bank share is projected to pay an annual dividend per share of $1.70 in the 2027 financial year.

At the time of writing, this forecast translates into a dividend yield of 4.75% excluding franking credits and a grossed-up dividend yield of approximately 6.3% including franking credits.

If someone were to invest $8,000 in ANZ, they would be able to buy 224 ANZ shares (with a little bit of money left over).

With those 224 ANZ shares, investors could receive $380.80 of cash and some franking credits, the level of franking credits are not known at this stage because the ASX bank share is only paying partially franked dividends.

Is this a good time to invest in the ASX bank share?

According to CMC Invest, there have been 10 analyst ratings calls on the business in the last three months.

Of those 10, four of them were a buy, five were a hold and one was a sell. So, the investment professionals are, on average, neutral on the appeal of the company’s valuation right now.

The average price target of those 10 ratings is $35.14. That means, collectively, those analysts are predicting the ANZ share price will (at the time of writing) hardly move over the next year.

In the last 12 months, the ANZ share price has been above $40 and below $30, so it’s probably about fair it’s roughly in the middle now.

For now, there seem to be more compelling ASX shares out there to buy.

The post If I invest $8,000 in ANZ shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

More reading

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• This ASX bank ETF has a 5.2% dividend yield right now
• ASX 200 rises as inflation surprise leaves investors with one big question
• How do ASX dividend shares compare to savings deposit rates today?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Qantas Airways Ltd (ASX: QAN) shares are trading under $10, and I think they look attractive at that level.

Airline stocks can be volatile. Fuel prices, travel demand, competition, economic conditions, and aircraft availability can all move earnings around quickly.

But I think Qantas has enough going for it to make the shares worth buying for patient investors. Here are three reasons why.

The valuation looks reasonable

The first reason is valuation.

According to CommSec, the consensus estimate is for Qantas to generate earnings per share of 98.4 cents in FY26, $1.16 in FY27, and $1.15 in FY28.

With Qantas shares trading below $10, that puts the stock on less than 10 times FY26 earnings and around 8 times FY27 earnings.

That does not look demanding to me, especially for a business with Qantas’ market position.

Of course, those estimates are not guaranteed. Airlines can be affected quickly by higher fuel costs, weaker demand, or disruption across global travel markets. Qantas’ recent market update highlighted just how much fuel volatility can change the operating backdrop.

But I think the valuation already gives investors a reasonable buffer for some of that uncertainty.

The dividends are back

The second reason is income.

Qantas paused dividends for several years around the pandemic, which was understandable given the pressure on the aviation industry at the time.

But the airline is now back to paying dividends, and that changes the investment case.

CommSec’s consensus estimates suggest Qantas could pay dividends per share of 39.6 cents in FY26, 44.8 cents in FY27, and 56.2 cents in FY28.

Based on a share price under $10, that implies forward dividend yields of around 4% in FY26, 4.5% in FY27, and more than 5.5% in FY28.

That income stream could become increasingly appealing if earnings remain resilient.

I would not treat Qantas like a classic defensive dividend share. Airline dividends can move with the cycle. But I do think the return of dividends shows how far the business has come since the pandemic years.

The business has real strengths

The third reason is that Qantas is not just any airline.

It has a powerful position in Australian aviation, supported by the Qantas and Jetstar brands. That gives it exposure to different parts of the market, from premium corporate and leisure travel to value-focused flying.

I also like the Qantas Loyalty business. It gives the group a valuable earnings stream that is not simply about selling seats on planes. Frequent Flyer, partnerships, financial products, and customer engagement all add to the broader ecosystem.

Fleet renewal is another important part of the story. New aircraft can improve customer experience, increase efficiency, and help the group better match capacity to demand over time.

There are risks to consider. Fuel prices remain a major swing factor, and Qantas has recently taken steps such as network changes, capacity adjustments, and fare increases in response to the conflict in the Middle East. Higher costs can still affect customers and margins if conditions remain difficult.

But I think Qantas has the scale, brands, loyalty business, and financial discipline to manage through a tougher environment better than many smaller airlines.

Foolish takeaway

Qantas shares under $10 look appealing to me.

The stock is trading on a modest earnings multiple based on consensus forecasts, dividends are back, and the business still has a strong position in Australian travel.

I would not expect the ride to be smooth. Airline stocks rarely are. But for investors who can handle some turbulence, I think Qantas offers an attractive mix of value, income potential, and recovery strength at current levels.

The post 3 reasons I would buy Qantas shares under $10 appeared first on The Motley Fool Australia.

More reading

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• If you invested $1,000 in Qantas shares a decade ago, here’s what they would be worth now
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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One of the best ASX ETFs to own over the last 12 months has been the Global X Semiconductor ETF (ASX: SEMI). 

It has risen an impressive 148% in that span. 

A new report from Global X has identified the key catalysts for this growth, and why these are only likely to continue. 

Fund overview 

The Global X Semiconductor ETF seeks to invest in companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors. This includes the development and manufacturing of semiconductors.

It provides exposure to 30 of the world’s largest semiconductor companies through the Solactive Global Semiconductor 30 Index.

Rather than trying to pick the next breakout AI winner, the ETF offers diversified exposure across the global semiconductor supply chain.

For those unfamiliar, a semiconductor is a material that can both conduct and block electricity, depending on how it’s used.

This unique ability makes semiconductors essential to modern technology. They’re used to create microchips that power smartphones, computers, cars, and medical equipment.

Why business is booming 

Semiconductors are the “brains” inside modern technology. They process information, store memory and power computation. Without them, AI simply does not exist.

The semiconductor industry sits at the centre of several major structural themes:

• Artificial intelligence and data centres
• Cloud computing
• Electric vehicles and autonomous driving
• Robotics and automation
• Defence technology
• Consumer electronics

According to Global X, as AI adoption accelerates, demand for advanced chips has exploded. 

Training large AI models requires enormous computing power, which in turn requires increasingly sophisticated semiconductors.

That has created a powerful tailwind for the companies designing chips, manufacturing them and supplying the equipment needed to build them.

The companies leading the way 

This ASX ETF includes 30 holdings, including strong exposure to the four companies powering the AI boom. 

According to Global X, one of the reasons semiconductor investing has become so compelling is that the industry contains some of the most strategically important companies in the world, including:

• Nvidia (NASDAQ: NVDA) – is a leader in the AI revolution because its GPUs power many advanced AI systems and data centres.
• Taiwan Semiconductor Manufacturing (NYSE: TSM) – is vital to the global tech industry, producing many of the world’s most advanced chips for companies like Nvidia and Apple.
• ASML (NASDAQ: ASML) – is essential because it is the only company that makes EUV lithography machines needed to manufacture cutting-edge semiconductors.
• Broadcom (NASDAQ: AVGO) – plays an important role in AI by designing custom chips for major technology companies such as Google and Meta.

The opportunity for investors 

Semiconductors have become one of the defining investment themes of the decade because they sit at the intersection of AI, automation and digital infrastructure.

However it is important investors are aware that semiconductor stocks can be volatile, particularly after strong rallies. 

The long-term investment case increasingly centres on the idea that chips are no longer cyclical industrial products alone; they are now strategic infrastructure for the digital economy.

For retail investors looking to better understand the AI boom, semiconductors may be one of the clearest places to start. And rather than trying to identify the next individual winner, diversified exposure through vehicles like Global X Semiconductor ETF (SEMI) offers a way to participate in the broader transformation underway across global technology markets.

The post The growing case for this semiconductor ASX ETF appeared first on The Motley Fool Australia.

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• ASX investors: Are you overinvested in the Magnificent 7 without knowing it?
• If I could buy only one ASX ETF for the next 10 years, this could be it
• Could this ASX ETF be the easiest way to invest in AI?
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• Best 3 ASX ETFs to leverage massive artificial intelligence buildout

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ASML, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended ASML and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I’d describe Guzman Y Gomez Ltd (ASX: GYG) as one of Australia’s top shares, or at least, it has the potential to prove it’s one of the best in the coming years.

As the chart above shows, the Mexican restaurant business has seen enormous volatility since it listed on 21 June 2024.

But, at the time of writing, it’s down 37% in the past year and more than 55% since December 2024.

I’m not sure if the company will ever see declines of that size again in the future. But, I’ve been looking for opportunities away from the tech sector because of the uncertainties of how the AI future could play out.

I’m not convinced AI will become as widespread as some people believe due to costs, but I still think it’s wise to look at a wide array of opportunities.

There are a few great reasons why I think GYG shares are on course for a very good future.

Exciting plans for Australia

The most important part of GYG’s growth plans is what it wants to achieve in Australia.

GYG wants to reach 1,000 locations in Australia within the next 20 years. It had 242 restaurants at the end of the FY26 third quarter and it expects to open 32 restaurants in FY26. That’s an excellent growth runway.

In the FY26 third-quarter, Guzman Y Gomez reported network sales growth of around 20%. I’d describe a profitable business growing its top-line at around 20% (or more) per year, definitely makes it one of Australia’s top shares.

But, it’s not as though the new locations are entirely stealing growth from the existing network. In the FY26 third-quarter, the company said the Australia segment (which includes Singapore and Japan) delivered comparable sales growth of 6.6%.

GYG expects to deliver Australia segment underlying operating profit (EBITDA) of approximately $85 million in FY26, that represents 29% year over year growth.

International expansion

Investors should remain focused on the Australian division because that’s the segment that is likely to generate the most network sales and earnings.

But, its Asian network sales are also headed in a very pleasing direction.

I’m not sure how much GYG’s network sales will grow in Japan and Singapore in the next five years, but at the current rate of growth, it could become a sizeable contributor to Guzman Y Gomez.

In the third quarter of FY26, Asian network sales grew by 15% year over year to $21.5 million. If the network sales in Japan and Singapore continue growing by double-digits for the foreseeable future, then the future looks bright. But, the Asian network sales were only 6.7% of the Australian network sales.

Plus, GYG could decide to expand into other countries where its success may look more like the Asian success (and less like the US, where it has decided to exit).  

Rising profit margins could be key for one of Australia’s top shares

While the top-line of Guzman Y Gomez is growing at a very fast pace, its bottom line could increase at an even stronger rate because the company is expecting profit margins to improve in the coming years.

In FY26, it expects the Australia segment underlying EBITDA as a percentage of network sales to expand to between 6% to 6.2% in FY26 compared to 5.7% in FY25. In the long-term that profit margin is forecast by the business to rise towards 10%. That would represent a significant rise in dollar terms for the business, which bodes very well for the future, in my view.

According to the projection on CMC Invest, GYG could generate earnings per share (EPS) of 64.2 cents. That means it’s currently valued at 30x FY28’s estimated earnings. I think it’s an appealing price to invest in for the long-term.

The post A rare buying opportunity in 1 of Australia’s top shares? appeared first on The Motley Fool Australia.

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• 9 ASX 200 shares with renewed buy ratings this week
• Why Temple & Webster, Web Travel and Guzman Y Gomez shares could have even further to fall
• 3 highly undervalued ASX 200 stocks to target in June with up to 87% upside

Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.