Tag: Stock pick

I believe one of the best investment strategies when it comes to ASX share investing is to buy and hold, and then let the magic of compounding run its course.

Compounding is powerful because it means the numbers can deliver growth on growth as the years go by. After several years, the business could be generating dramatically bigger revenue and earnings.

The two ASX share below have significant growth plans, and I’m excited by what they could achieve.

L1 Group Ltd (ASX: L1G)

L1 Group describes itself as an alternative investment manager that is “committed to providing best-in-class investment products that deliver exceptional risk-adjusted returns” for investors.

Two of its most well-known investment products are listed investment companies (LICs) which provide L1 Group with locked-in funds under management (FUM). Those LICs are L1 Long Short Fund Ltd (ASX: LSF) and L1 Global Long Short Fund Ltd (ASX: GLS).

I’m expecting the ASX share to generate revenue growth due to attracting new FUM into existing strategies, launching new funds and delivering investment growth with its existing funds.

Fund managers can be very scalable because it doesn’t take 10% more staff and a 10% bigger office to manage 10% more FUM. Therefore, I’m expecting profit margins to increase.

L1 notes that its client base is extremely diversified, with 91% of revenue coming from non-institutional clients, which I think makes it less vulnerable if short-term fund performance were disappointing.

The fund manager has also talked about launching joint ventures and acquiring existing investment managers, which add further growth potential.

According to the projection on Commsec, the L1 Group share price is valued at 20x FY27’s estimated earnings.

Sigma Healthcare Ltd (ASX: SIG)

Sigma is best known as the owner of pharmacy giant Chemist Warehouse, which is growing rapidly and has international ambitions.

In the FY26 first-half, Australian Chemist Warehouse-branded store sales grew 17.2%, with like-for-like sales growth of 15%. This shows that the business is delivering excellent levels of organic growth considering it’s a physical store retailer.

Chemist Warehouse is growing its own brands (including Wagner) and expanding its Australian store network, which are pleasing tailwinds for the business in its core markets, which could help it deliver profit improvement for many years ahead.

Internationally, the ASX share is expanding in New Zealand and Ireland at a fast pace. In the first half of FY26, it opened 12 new stores and expects to open another 11 in the second half of FY26. In HY26, Ireland sales rose 49.6% and New Zealand sales increased 22.4%.

I’m not sure what its local and global store network will look like in 10 years from now, but I’m optimistic it will be significantly larger.

According to the projection on Commsec, the Sigma share price is valued at 33x FY28’s estimated earnings.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

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• I think these are some of the best ASX 200 shares to buy now
• If I had $5,000 to invest in ASX 200 shares today, here’s what I’d buy
• 3 simple ASX shares to start investing today
• Top brokers name 3 ASX shares to buy next week
• Buy, hold, sell: Life360, Northern Star, and Sigma shares

Motley Fool contributor Tristan Harrison has positions in L1 Long Short Fund. 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.

Building long-term wealth on the share market doesn’t require constant trading or chasing the latest trend.

In many cases, it comes down to identifying high-quality businesses with lasting advantages and holding them as they grow over time.

With that in mind, here are three ASX 300 shares that could be worth considering for the next decade.

Breville Group Ltd (ASX: BRG)

Breville has quietly built one of the most impressive global consumer brands to come out of Australia.

At the centre of its success is coffee, and more specifically, its premium at-home coffee machines. As more consumers look to recreate cafe-quality coffee in their own kitchens, Breville has been a major beneficiary of this shift.

This isn’t just a short-term trend either. The company’s half-year results in February showed that coffee continues to be a key growth driver, with strong double-digit growth helping push revenue to a record $1.1 billion for the half.

What makes Breville particularly attractive is how it has turned a simple appliance into an ecosystem. From machines to grinders and even its Beanz coffee subscription platform, it is embedding itself deeper into the daily routines of its customers.

Combined with global expansion into markets like China, Korea, and the Middle East, Breville appears to have a long runway for growth.

REA Group Ltd (ASX: REA)

Another ASX 300 share that could be worth considering as a buy and hold investment is REA Group.

As the owner of realestate.com.au, it holds a leading position in Australian property listings, which is a market where scale and network effects are incredibly difficult to disrupt.

Even during periods of softer housing activity, REA has shown an ability to grow earnings through pricing power and premium products for agents. Over time, this combination of market leadership and monetisation strength has underpinned consistent and robust earnings growth.

Looking ahead, its expansion into adjacent services such as data, financing, and developer tools provides additional avenues for growth beyond simple listings.

For a long-term investor, REA Group offers exposure to a high-quality digital marketplace with strong competitive advantages and a track record of execution.

Temple & Webster Group Ltd (ASX: TPW)

A third ASX 300 share that could be a top buy and hold option is Temple & Webster.

It has established itself as a leading online-only furniture and homewares retailer in Australia. While the category has historically been dominated by physical stores, consumer behaviour is gradually shifting.

Temple & Webster’s asset-light model gives it flexibility that traditional retailers often lack. It can scale its product range quickly, respond to trends, and operate without the cost burden of a large store network.

Although earnings can be more cyclical due to housing and consumer spending trends, the long-term direction of travel appears favourable. As online penetration in furniture continues to increase, Temple & Webster is well positioned to capture a growing share of the market.

The post 3 ASX 300 shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

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

S&P/ASX 200 Index (ASX: XJO) shares closed at 8,953.3 points on Monday, up 0.07%.

On The Bull this week, three experts provide their assessment of three sector giants in their respective market sectors.  

Here’s what they think of these ASX 200 large-cap shares in the technology, consumer staples, and finance sectors.

Xero Ltd (ASX: XRO)

The Xero share price closed at $82.15 yesterday, up 0.21% for the day and down 46% over the past 12 months.

Xero has been caught up in the prolonged tech sector sell-off between August 2025 and March this year.

And it was big.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) lost 48% of its value between 29 August 29 and 30 March.

Investors sold their tech stocks on fears that artificial intelligence (AI) may do lasting damage to many companies.

The Xero share price fell 56.5% between 29 August and 30 March.

However, things appear to be turning around.

ASX 200 tech shares stormed 13% higher last week, with Xero shares soaring almost 15%.

Christopher Watt from Bell Potter says Xero is a high quality business that he expects to deliver sustained double-digit earnings growth.

Watt explains his buy rating on Xero shares:

We believe concerns related to the impact of artificial intelligence are overblown, and the share price sell-off presents a compelling buying opportunity.

Watt says Xero is experiencing strong subscriber growth and increasing average revenue per user through its product expansion.

Xero continues to improve operating leverage as the business scales up globally, with margins expected to expand in response to cost discipline.

Importantly, Xero is transitioning from a growth-at-all-costs model to one focused on profitability and cash generation, which should support a re-rating in valuation.

Woolworths Group Ltd (ASX: WOW)

The Woolworths share price rose 1.9% to $37.49 yesterday.

The ASX 200 consumer staples giant has risen 40% over six months.

John Athanasiou from Red Leaf Securities has a hold rating on Woolworths shares.

He explains:

Australia’s largest supermarket operator offers stable defensive earnings and a strong balance sheet.

However, margin pressure from cost inflation and competitive discounting limits growth prospects.

WOW is a reliable long term holding, but lacks significant upside catalysts in the absence of operational improvements or digital expansion initiatives.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price rose 1.1% to $180.15 on Monday.

CBA shares experienced a dramatic drop last year after hitting a record high of $192 in June.

They’ve been fighting back this year, rising 12% in the year to date.

Dylan Evans from Catapult Wealth thinks CBA shares are overvalued.

Evans has a sell rating on the ASX 200 bank stock, explaining:

CBA is a high quality company, with a strong management team and consistent track record.

However, in our view, the bank was recently trading on a lofty price-earnings ratio well above its long term average and that of its competitors. This multiple expansion has driven much of CBA’s share price outperformance in the past five years.

However, the company’s high multiple is supported by only single digit growth and a recent modest dividend yield below 3 per cent on April 16.

The post Buy, hold, sell: Xero, Woolworths, CBA shares appeared first on The Motley Fool Australia.

More reading

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• I think these are some of the best ASX 200 shares to buy now
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• Forget CBA shares — here are 2 ASX bank shares I’d rather own right now
• This ASX shares and ETF mix could be the key to early retirement

Motley Fool contributor Bronwyn Allen 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 Xero. The Motley Fool Australia has positions in and has recommended Woolworths Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I had to pick one ASX dividend share to own through every market cycle, it would be Transurban Group (ASX: TCL).

This is not a high-flying growth story or a market darling chasing headlines. It’s something far more valuable for long-term investors: predictability.

When you’re building a portfolio designed to last decades, boring can be beautiful. And Transurban is about as close as it gets to “set and forget” on the ASX.

Operator of city’s arteries

At its core, this $42 billion ASX dividend share is a major toll road operator, owning and running critical motorways across Australia and North America.

These are not optional assets. They are the arteries of modern cities, used every day by commuters, freight operators, and essential services. That level of necessity creates a powerful foundation of recurring demand. Because drivers don’t simply stop using roads in a downturn, the company’s cash flows tend to be remarkably resilient.

On top of that, many of its toll roads operate under long-term concession agreements, with pricing often linked to inflation. That means revenue doesn’t just stay stable, it can gradually grow even when economic conditions are uncertain.

Strong payout record

This is exactly what income investors look for in an ASX dividend share: durability first, growth second.

Transurban has also built a strong track record of returning capital to shareholders through consistent distributions. While the yield moves with the share price and investment cycle, the underlying focus remains the same—sustainable payouts supported by real, tangible infrastructure assets rather than financial engineering.

For FY26, the company has guided to a distribution of 69 cents per security, implying a forward yield of around 4.9%. It recently paid an interim distribution of 34 cents per security, unfranked, reinforcing its steady payout rhythm.

Importantly, this is not a static business. Transurban continues to reinvest heavily in expanding and upgrading its road networks. As cities grow, congestion worsens, and infrastructure demands increase, its assets become even more valuable. That creates a long-term growth engine layered on top of its defensive earnings base.

Foolish Takeaway

Of course, no investment is without risk. Transurban carries significant debt, which is typical for infrastructure operators but does make it sensitive to interest rate changes. Higher borrowing costs can weigh on returns and investor sentiment.

Regulatory risk is also ever-present, as toll pricing and concession terms ultimately depend on government agreements. And while traffic volumes are generally stable, they are not immune to economic slowdowns or major disruptions.

Even so, the long-term case for the ASX dividend share remains compelling. This is a business built on essential infrastructure, supported by population growth, urbanisation, and inflation-linked revenue streams. It doesn’t require perfect conditions to perform. It simply requires people to keep moving.

The post Which ASX dividend share could you buy and hold forever? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a small gain. The benchmark index rose 0.1% to 8,953.3 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 set to rise

The Australian share market looks set for a positive session on Tuesday despite a poor start to the week in the US. According to the latest SPI futures, the ASX 200 is poised to open the day 28 points or 0.3% higher. On Wall Street, the Dow Jones was down slightly, the S&P 500 fell 0.25%, and the Nasdaq dropped 0.25%.

Oil prices rise

It could be a good session for ASX 200 energy shares Karoon Energy Ltd (ASX: KAR) and Santos Ltd (ASX: STO) after oil prices stormed higher overnight. According to Bloomberg, the WTI crude oil price is up 5.8% to US$88.73 a barrel and the Brent crude oil price is up 5.3% to US$86.95 a barrel. Rising tensions in the Strait of Hormuz sent oil prices charging higher.

Buy WiseTech shares

The team at Bell Potter remains bullish on WiseTech Global Ltd (ASX: WTC) shares. This morning, the broker has retained its buy rating on the logistics solutions technology company’s shares with a trimmed price target of $78.85 (from $83.75). It said: “We note that WiseTech is currently trading at >30% discount to Technology One on an EV/EBITDA basis in both FY26 and FY27. While we believe some sort of discount is now warranted, we believe the current discount is excessive given WiseTech has greater forecast earnings growth over the medium term and also a similar strong competitive moat due to 30 years of proprietary data, deeply embedded software and high switching costs.”

Gold price falls

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Ramelius Resources Ltd (ASX: RMS) could have a subdued session on Tuesday after the gold price pulled back overnight. According to CNBC, the gold futures price is down 0.9% to US$4,835.2 an ounce. US-Iran tensions and a stronger US dollar put pressure on the gold price.

Rio Tinto Q1 update

Rio Tinto Ltd (ASX: RIO) shares will be on watch on the ASX 200 on Tuesday when the mining giant releases its first-quarter update. According to a note out of Morgans, its analysts are expecting Pilbara iron ore shipments of approximately 71.3Mt. This will be down 20% quarter on quarter and short of the consensus estimate of 77.8Mt. Elsewhere, a mixed result is expected for Rio Tinto’s copper operations.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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

Finding stocks that can realistically double in a year is not easy. Most of the time, those kinds of returns come with higher risk or rely on a big change in sentiment.

Right now, that shift is starting to show up in parts of the ASX tech sector.

After a sharp sell-off through late 2025 and early 2026, several high-quality names have fallen well below previous highs. In some cases, the underlying business has kept improving while the share price moved the other way.

That gap is what stands out.

If I were looking for positions with strong re-rating potential from current levels, these are the three ASX stocks I would focus on.

WiseTech Global Ltd (ASX: WTC)

WiseTech is a clear example of sentiment disconnecting from business performance.

The company continues to expand its CargoWise platform globally, with revenue lifting strongly following the e2open acquisition. In its latest result, revenue rose 76% to $672 million, while EBITDA increased 31%.

At the same time, the share price has been under heavy pressure. The stock is still well below its 2025 highs after falling rapidly over the past year.

Some of that reflects margin compression tied to acquisitions and governance concerns. But those are not structural issues with the core platform.

CargoWise remains deeply embedded across global logistics networks. Once in place, it is difficult to replace, which supports recurring revenue and pricing power.

If sentiment stabilises, this is the type of stock that can move quickly.

Pro Medicus Ltd (ASX: PME)

Pro Medicus sits at the premium end of the ASX tech space, but the business model continues to justify that position.

The company delivers medical imaging software to major hospital networks, mainly in the United States. Its contracts are long-dated, high-margin, and often include minimum usage volumes.

That creates strong revenue visibility.

Recent results showed revenue up 28.4% and EBIT up 29.7%, with more than $1 billion in forward contracted revenue.

The key point here is consistency. Growth has remained strong even as the share price pulled back over the past year.

It is a high-quality operator that has been repriced with the sector.

Xero Ltd (ASX: XRO)

Xero offers a different angle, but the same setup.

The company continues to grow its global subscriber base, with users reaching 4.59 million in the latest half. Revenue increased 20% to $1.19 billion, with improving EBITDA margins.

At the same time, the share price has fallen heavily alongside the broader tech sell-off.

There are still execution risks, particularly around US expansion and competition. But the core model remains strong.

Xero generates recurring subscription revenue and continues to lift pricing through product improvements.

If growth holds and sentiment shifts, there is room for the multiple to expand again.

Foolish takeaway

All three of these companies have seen large drawdowns despite continuing to grow.

This is not about finding unknown ASX small-caps. These are established businesses that have already proven their models at scale.

The risk is that sentiment stays weak or growth slows.

But if the market continues rotating back into tech, these are the types of companies that are likely move the most.

Personally, I see this more as a sentiment reset than a change in fundamentals. That is why I would be looking here first.

The post Want to double your money in 2026? This is what I’d buy appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Aaron Teboneras 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 WiseTech Global and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Over the past six or seven weeks, I have begun to reassess my ASX share portfolio and stress-test it for the worst possible scenario when it comes to the ongoing conflict between Israel, the United States, and Iran. After all, I’m a ‘hope for the best, prepare for the worst’ kind of guy when it comes to these situations. And this latest Middle East conflict is throwing up some pretty nasty potential consequences.

After a comprehensive reevaluation of my portfolio, I have realised that a mistake I made years ago when building it is still haunting it. This mistake is one that I have decided to dedicate 2026 to correcting.

A personal note here, one of my weaknesses is a love of a good collection. I am a collector at heart, and have been my entire life. There are few things I can resist less than a full collection, whether it be a book series or a set of trading cards. Or stocks.

When I first began building my stock portfolio, I couldn’t help but try to own shares of every high-quality company I could find. If an item was in the supermarket, or contributed even a few stitches to the fabric of popular culture, I had to own shares of the company that made it.

A few years ago, I realised that this strategy perhaps wasn’t the most prudent one. That revelation came when auditing my portfolio revealed that I owned more than a hundred different positions, all rather small. That is a ludicrous amount that prohibited the kind of dedication that is necessary for stock market success.

My 2026 ASX share portfolio goal

Over subsequent years, I sold down many of those positions that, while I thought were decent companies, I lacked a deep knowledge of. These ranged from Nike, PepsiCo, and Unilever, to Kraft Heinz, Adobe, and Hasbro.

Most of these names are high-quality companies whose products can be found all over the world. But I simply had too many of them to keep track of. My love of collecting had become a burden on my finances.

Today, my portfolio is simpler, more nimble and easier to keep an eye on. However, even though I have sold off many holdings over the past few years, it is still too large. Here at the Fool, we usually tell investors that they should aim for somewhere between 15 and 25 companies in a typical individual stock portfolio. Unfortunately, I still don’t have my money where our mouths are, and I currently own a lot more than 25 positions. But it is far less than the triple-digit figure I had a few years ago, so progress is being made.

One of my goals over the rest of 2026 is to reduce this portfolio further. Boiling it down, as it were. One of the things I have learned over my years in the market is that the best way to harness the power of compounding is to find the rare companies that can consistently compound their own revenues and earnings over time and buy as many shares as one can. There are only a handful of companies in my portfolio that I have faith in this endeavour. I’ll be spending this year adding to them, and perhaps selling down the rest. In investing, as with many things, often less is more.

The post My ASX share portfolio: Overcoming a common investing mistake appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Kraft Heinz, PepsiCo, and Unilever. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe and Nike. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Hasbro, Kraft Heinz, and Unilever and has recommended the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool Australia has recommended Adobe and Nike. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for ASX shares, then it could be worth hearing what Bell Potter is saying.

It recently named a number of smaller companies that it believes offer attractive upside.

Here are three ASX shares that have been given the thumbs up:

AMA Group Ltd (ASX: AMA)

This accident repair business is one of Bell Potter’s preferred smaller ASX shares.

The broker sees value in AMA Group as the company continues to improve following a difficult period, with its scale and integration capability giving it leverage to better conditions.

Commenting on AMA Group, Bell Potter said:

AMA Group is the largest accident repair group in Australia with approximately 138 vehicle panel repair shops. The company also has a presence in New Zealand with 5 vehicle panel repair shops. AMA sold its manufacturing business in 1HFY21 and its remanufacturer of automatic transmissions – called Fluid Drive – in 1HFY23 so is now almost a pure play accident repair group. The only part of the company outside of panel repair is the Supply business – called ACM parts – which sells a range of new, aftermarket and recycled parts and consumables.

This business now, however, is flagged for sale. The company has a strong track record of successful integrations, and any announcements could trigger a rerating from where it currently trades at a discount to its long-term valuation average.

Nick Scali Ltd (ASX: NCK)

This furniture retailer is another ASX share that Bell Potter is positive on.

It likes Nick Scali due to its store rollout plans and expansion opportunities, particularly in the UK. Bell Potter explains:

Nick Scali is an Australian retailer specialising in household furniture and related accessories, operating under the core Nick Scali brand as well as the Plush banner. >90% of sales are completed in-store, with the company maintaining a substantial physical presence with over 100 showrooms across Australia and New Zealand, and has recently expanded into the UK, which now contributes around 8% of total revenue.

Looking ahead, the key growth drivers include the continued roll-out of Nick Scali stores in the UK, supported by the refurbishment of acquired Fabb locations, and the ability to leverage the group’s established supply base to drive scale efficiencies and margin expansion.

Universal Store Holdings Ltd (ASX: UNI)

This youth fashion retailer is also rated positively by the broker. Bell Potter sees appeal in Universal Store’s rollout strategy, quality metrics, and valuation. The broker said:

Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 11% p.a. Valuation looks attractive, trading on a forward P/E of ~13.4x. UNI is a quality small cap (ROE ~26%) that is executing on its rollout strategy.

The post 3 ASX shares Bell Potter rates as top buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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 recommended Nick Scali and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When I look for opportunities in the ASX 200, I tend to focus on shares with clear growth pathways and expanding market opportunities.

That usually leads me toward companies that are building platforms, scaling globally, or reshaping their industries.

Here are three ASX 200 shares that stand out to me right now.

Xero Ltd (ASX: XRO)

Xero is evolving into something much bigger than accounting software.

At its core, it sits on top of financial data for millions of small businesses. That position creates a powerful foundation for expanding into adjacent services and delivering more value over time.

What I find particularly interesting right now is how the company is leaning into artificial intelligence (AI).

According to its recent investor briefing, Xero sees the long-term opportunity expanding its total addressable market by around four times as AI capabilities are layered into its platform.

That shift changes how I think about the business. It moves beyond subscription accounting software and toward a broader system that helps businesses make decisions, automate processes, and improve performance.

On top of that, the integration with Melio is opening up a large US payments opportunity, which adds another growth driver.

I think Xero is building a platform that can continue to expand its reach and relevance over time.

Hub24 Ltd (ASX: HUB)

HUB24 is benefiting from structural change within the wealth industry.

More advisers are moving toward platform-based solutions, and HUB24 continues to capture that shift.

What stands out is the pace at which the business is scaling. In its latest results, platform funds under administration reached $152.3 billion, supported by record net inflows of $10.7 billion in the half.

That growth reflects strong demand from advisers and ongoing market share gains.

But it isn’t settling for that. HUB24 continues to invest in new solutions, including an emerging ecosystem that leverages AI and integrated tools to improve adviser productivity.

For me, this is a business where growth is driven by both industry tailwinds and continued innovation within its platform.

Sigma Healthcare Ltd (ASX: SIG)

Sigma Healthcare is another ASX 200 share I think could be a best buy. It is shaping into a very different business following its merger with Chemist Warehouse.

It now combines wholesale distribution with a large and growing retail network, which creates a broader and more scalable model.

The recent first-half results highlight how that combination is performing. Revenue increased 15% to $5.5 billion, with strong growth across both domestic and international markets, supported by expanding store networks and increasing demand.

What I find attractive is the runway ahead. The company continues to open new stores, expand its private label offering, and drive efficiencies through scale. 

Overall, I think Sigma is transitioning into an integrated healthcare platform with multiple ways to grow.

Foolish takeaway

What stands out to me is how each of these businesses is expanding its opportunity set.

Xero is building a broader platform around financial data and AI, Hub24 is scaling alongside structural growth in platform-based investing, and Sigma Healthcare is strengthening its position across retail and distribution.

That ongoing expansion is what I look for when identifying high-quality ASX 200 shares to buy now.

The post I think these are some of the best ASX 200 shares to buy now appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Hub24. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Australian investors, particularly those approaching retirement, often choose to target equities that generate passive income. 

This is often done using dividend shares, or dividend paying ASX ETFs. 

The trade off for many investors when targeting passive income is missing out on strong capital gains.

However there is one fund that stands out as being able to offer both. 

ASX leads global dividends

Some investors may not realise that Australia has historically offered some of the highest average dividend yields in the world. 

As of December 31, 2024, the trailing 12-month dividend yield of the S&P/ASX 300 Index (ASX: XKO) was approximately 3.5%.

According to research from S&P Global, this outpaced Europe, Canada and the US. 

However it is worth noting it’s significantly lower than its long-term average of approximately 4.5%.

According to Vanguard, Australia’s affinity with equity markets and our higher than the global average dividend rate, means that many investors look to shares for that income. 

But often there is a trade-off to be made between income and growth.

The exception to this rule is the Vanguard Australian Shares High Yield ETF (ASX: VHY). 

ASX ETF overview

The Vanguard Australian Shares High Yield ETF seeks to track the return of the FTSE Australia High Dividend Yield Index. 

According to Vanguard, it currently yields around 5% per annum (paid quarterly) – even higher when including franking credits. 

That means a $100k investment in this ASX ETF would have paid roughly $5,000 annually in distributions, before franking – a robust income source for retirees or income-focused investors.

Passive income and growth 

What stands out about this fund, is it has also generated strong growth alongside consistent dividends. 

It has delivered about 9–10% total return per year over the last 5 years, closely matching the overall Australian share market’s performance while outpacing many dedicated “high-income” funds. 

Notably, VHY’s total return (income + price appreciation) has surpassed the pure income strategies of some competitors. By contrast, VHY provided ample income and share-price growth, helping investors’ portfolios grow more over time.

This combination of passive income and growth is thanks to the underlying fund strategy.

VHY follows a transparent index-based strategy: it tracks the FTSE Australia High Dividend Yield Index, dividend-paying Australian companies. This rules-based approach ensures the fund consistently tilts toward above-average yielders while avoiding subjective stock picks.

The result is a straightforward, “core” equity income holding for clients – easy to understand and explain. In contrast, some income-focused peers use complex active tactics (e.g. rotating stocks around ex-dividend dates or writing call options for extra income).

Importantly for investors, the fund also comes with an annual fee of just 0.25%.

The post Why this is the best income ASX ETF for retirees appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.