Tag: Stock pick

Qoria Ltd (ASX: QOR) shares were well and truly out of form on Friday and crashed 19% to 26 cents.

Investors were selling the ASX cyber safety share following the release of its quarterly update and an update on its proposed merger with Aura.

While this decline is disappointing, the team at Bell Potter believes it has created a buying opportunity and is tipping a significant rebound.

What is the broker saying about this ASX share?

Bell Potter was a touch disappointed with Qoria’s performance during the third quarter. It notes that its annual recurring revenue (ARR) was softer than expected, which ultimately led to a miss on cash receipts. It said:

Exit ARR of $151m at 31 March was 3% below our forecast of $155m and the miss was driven by lower-than-expected K12 growth and a higher-than-expected negative FX impact of $5.1m. The positive surprise, however, was record Qustodio growth for the quarter of $2.7m when Q3 is meant to be the seasonally weak quarter for the consumer business.

Cash receipts of $23.3m was 7% below our forecast of $25.0m and again was partly driven by FX headwinds but was an unusually low 18% of our full year forecast (is more usually ~20%). Net operating cash flow was an outflow of $4.7m versus our forecast of an inflow of $1.5m with the difference being the lower cash receipts and higher working capital.

Big rebound potential

While this was disappointing, Bell Potter remains positive. In response, the broker has retained its buy rating on the ASX share with a reduced price target of 50 cents (from 60 cents).

Based on its current share price of 26 cents, this implies potential upside of 92% for investors over the next 12 months.

Commenting on its recommendation and expectations for the future, Bell Potter said:

We have reduced the multiple we apply in the EV/Revenue valuation from 4.5x to 4x and increased the WACC we apply in the DCF from 9.1% to 9.3% due to the lowerthan-expected Q3 result and the what-looks-to-be delay in positive free cash flow. The net result is an 18% decrease in our target price to $0.50 which is still close to double the share price so we maintain our BUY recommendation.

The thesis is now obviously more about the combined Qoria and Aura businesses going forward and we note that Aura had a strong Q3 in terms of ARR growth – up 31% y-o-y – and was not negatively impacted by currency like Qoria (as it reports in USD). The key, however, for the combined group will be showing/proving it can generate strong positive free cash flow when this has been the challenge individually to date.

The post This ASX share crashed 19% on Friday, Bell Potter says it could rebound 90% appeared first on The Motley Fool Australia.

More reading

• 4 ASX shares tipped to fly 100% to 125% higher
• 3 ASX shares tipped to grow 100% or more in the next 12 months

Motley Fool contributor James Mickleboro 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.

ASX dividend stocks are particularly attractive right now because of the large dividend yields on offer. Elevated inflation and higher interest rates may mean that investors are looking for additional income to offset that rise in costs.

The best thing to do, in my view, is to look for businesses that grow their payouts over the long-term. In that sense, I think it’s a good idea for an undervalued stock with a good dividend yield that can also deliver rising earnings.

That’s why I’m particularly attracted to the ASX dividend stock Sonic Healthcare Ltd (ASX: SHL), which is down around 30% since August 2025.

Great credentials of an ASX dividend stock

One of the best things about the ASX healthcare share is that it has provided investors with regular dividend growth. Over the last 30 years, the business has increased its annual payout in most years, including every year of the last decade.

In the FY26 half-year result, Sonic increased its interim dividend per share by 2.3% to 45 cents. The company’s board of directors has decided on a progressive dividend policy – the HY26 dividend was increased by 1 cent per share.

The last two dividends declared by the business equate to a dividend yield of 5.3%, or almost 7%, including franking credits, at the time of writing.

While the business isn’t growing its dividend per share at a fast pace, it’s being very consistent for shareholders.

Ongoing earnings growth

The business continues to deliver solid earnings growth. I’d say it’s benefiting from growing and ageing populations in its core markets of Germany, Australia, the USA, Switzerland and the UK.

In the FY26 half-year result, it reported revenue growth of 17%, operating profit (EBITDA) growth of 10% to $907 million, net profit growth of 11% to $262 million and operating cash flow rose 10% to $682 million.

Within those numbers, the ASX dividend stock delivered organic revenue growth of 5%, which is a pleasing rate of expansion.

Sonic Healthcare reported in the HY26 result that operating leverage and synergies from acquisitions – demonstrated by EBITDA margin enhancement for the majority of the business. It also said that it has an ongoing focus on cost control.

The company noted that it’s undertaking an operating review of US business, including “rationalisation of anatomical pathology operations”. In other words, it’s looking to grow profit by making some decisions with the US business.

Valuation

According to the projection on Commsec, the Sonic Healthcare share price is valued at 17x FY26’s, which I think looks cheap given how defensive it is and the likelihood of further earnings growth.

The post 1 ASX dividend stock down 30% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• 3 cheap ASX dividend shares offering 5% to 6% yields (and major upside)
• 6 ASX shares hitting 52-week lows amid today’s market rally
• 3 ASX 200 healthcare shares at multi-year lows

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

Having some exposure to the small side of the market can be a good thing for a balanced portfolio, if your risk tolerance allows.

That’s because the potential returns on offer from small-cap ASX stocks are often superior to what you would find elsewhere on the market.

With that in mind, let’s look at one small cap that Bell Potter is tipping to more than double in value. Here’s what the broker is recommending:

Which small-cap ASX stock?

The small cap that has caught the eye of Bell Potter is Alpha HPA Ltd (ASX: A4N).

It is the owner of the First Facility in Queensland, which is aiming to supply high-purity aluminium-based products to the semiconductor, lithium-ion battery, and light emitting diode (LED) manufacturing sectors.

Bell Potter highlights that the project’s proprietary technology is expected to disrupt incumbent HPA production through delivering ultra-high purity products with significantly lower unit costs.

Following a site visit, the broker is feeling very positive about the small-cap ASX stock’s outlook. It said:

A4N hosted a site visit and management briefings at its HPA First project in Gladstone yesterday, attended by around a dozen investors and sell-side analysts. The visit highlighted construction progress at Stage 2 and an update on engagement with customers. With reference to the January 2026 estimates, Stage 2 development is on budget and on schedule for wet commissioning in mid-2027 and first production in 2H 2027. A4N management spoke confidently about product demand and the potential for future expansions at Gladstone. They expect to meet the conditions for debt draw-down by the end of 2026.

Bell Potter also points out that the company is well-placed to benefit from increasing demand for aluminium compounds in the booming data centre market. It adds:

Around 70-80% of A4N’s current customer engagement is with the semiconductor sector which is seeing unprecedented demand from AI data centre expansions. A4N’s high purity aluminium compounds have purity and morphology which unlock greater manufacturing and computational efficiency compared with incumbent suppliers and materials (high purity silica). Key applications are for Chemical Mechanical Planarization used in semiconductor manufacturing and for thermal management (thermal fillers). A4N also has ongoing engagement for direct lithium extraction and battery anode coating use-cases where its products are again driving higher value in use.

Big potential returns

According to the note, the broker has retained its speculative buy rating on the small-cap ASX stock with an unchanged price target of $1.50.

Based on its current share price of 62.5 cents, this implies potential upside of 140% over the next 12 months.

Commenting on its buy rating, Bell Potter said:

A4N’s HPA First process has a competitive advantage in the production of aluminabased thermal interface fillers and CMP abrasives for the semiconductor sector. A Stage 1 facility commissioned in 2022 has technically derisked the process and is providing product for market outreach and customer qualification. Over 2026, we expect A4N to sign further offtake Letters of Intent and progress to sales contracts.

The post Why Bell Potter says this small-cap ASX stock could rise 140% appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Brambles, CBA, and Macquarie shares
• Is the Santos share price a buy or a sell amid the Middle East events?
• 5 things to watch on the ASX 200 on Monday
• Market alert: 2 major ASX bank shares could fall double digits
• If I had to build a simple ASX portfolio today, this is what I’d do

Motley Fool contributor James Mickleboro 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.

Investors have no shortage of ASX shares to choose from on the local market.

To narrow things down, let’s see what analysts are saying about three big names, courtesy of The Bull.

Are they buys, holds, or sells this week? Let’s find out:

Brambles Ltd (ASX: BXB)

The team at MPC Markets thinks that this supply chain logistics company’s shares are a sell this week.

It believes the Middle East conflict will weigh on its performance and could push its shares lower. It said:

Brambles is an integrated supply chain logistics giant. BXB lifted sales revenue by 2 per cent in the first half of 2026. Underlying profit was up 7 per cent. However, the shares have fallen from $25.27 on March 2 to trade at $22.18 on April 23. The fall has occurred since the conflict in the Middle East began on February 28. We believe the odds favour further weakness, at least in the short term, rather than a bounce to the top end of its trading range. Investors may want to consider taking some gains in uncertain and volatile times.

Commonwealth Bank of Australia (ASX: CBA)

Over at Morgans, its analysts continue to believe that CBA shares are overvalued.

This week, the broker has named Australia’s largest bank as a sell. While acknowledging its quality, it thinks better value can be found elsewhere. It said:

CBA is Australia’s strongest major bank, with a leading retail franchise and consistent profitability. However, the market fully recognises these strengths. The shares were recently trading at a significant premium, leaving limited upside as interest rate benefits fade and competition increases. While the business remains high quality, future returns are likely to be more modest, in our view. With the company’s valuation pricing in a lot of good news, we see better value elsewhere, supporting a sell view.

Macquarie Group Ltd (ASX: MQG)

The team at MPC Markets is positive on investment bank Macquarie and has named its shares as a buy this week.

It thinks the company has a bright outlook and highlights its strong track record as a reason to buy. It said:

This global financial services company operates in more than 30 markets. Businesses include asset management, banking and financial services and commodity and global markets. Its diversification appeals to investors, particularly in volatile markets. The trading desk has been a driver of growth in previous years and we suspect it will feature prominently at the company’s full year results due in May. The shares have surged from $191.53 on March 4 to trade at $229.95 on April 23. We believe the company’s outlook is bright. The company’s solid track record has stood the test of time.

The post Buy, hold, sell: Brambles, CBA, and Macquarie shares appeared first on The Motley Fool Australia.

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• Market alert: 2 major ASX bank shares could fall double digits
• 5 years ago, $10,000 bought 111 CBA shares. But how many would it buy now?
• Want to fast-track retirement? These ASX ETFs could get you there
• 6 ASX 200 shares downgraded by brokers this week
• 3 ASX shares I’d buy if the market dropped again

Motley Fool contributor James Mickleboro 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.

The Santos Ltd (ASX: STO) share price has had an excellent 2026 to date, rising more than 26%. The S&P/ASX 200 Index (ASX: XJO) is virtually flat. The business has clearly been indirectly positively affected by events in the Middle East.

As the chart above shows, the business is close to a 52-week high. The question is whether the ASX energy share is a buy given elevated profit generation, or whether this is a good time to sell given the boosted valuation.

I’m not an expert on ASX energy shares, so I’m going to look at the opinion of fund manager L1 Group Ltd (ASX: L1G), which likes to hunt for opportunities across a variety of sectors. Let’s look at some of those views on the Santos share price.

Is the Santos share price a buy?

L1 noted that oil and gas shares rose strongly in March in response to the Iran war, with oil prices jumping by more than 50% and European gas names up between 50% to 70% in the year to date.

The fund manager said that it expects near-term tightness of fuel supply to continue. However, the medium-term fundamentals are “less supportive”.

Based on the above, L1 decided to reduce its exposure to energy names during March, including Santos shares, due to the expectation that oil and gas prices (and related shares) would normalise as the current conflict resolves. At the time of writing, there is still no permanent agreement between the US and Iran to allow fuel and other cargo ships through the Strait of Hormuz again.

But, on the positive side of things, L1 noted that Santos continues to “make significant progress on its key growth initiatives, with its Barossa project loading the first LNG cargo at the end of January 2026, and the Pikka project expecting to achieve its first oil in the coming weeks.”

The fund manager said that the completion of these significant growth projects will mark the end of a multi-year period of elevated investment and represent an “inflection point” for earnings and dividends going forward.

Other analysts’ views on the ASX energy share

Other analysts are also fairly positive on the business right now. According to CMC Invest, there are currently six buy ratings, two hold ratings and a sell rating on the business. However, the average price target of $7.90 only suggests a possible rise of 1% from where it is, at the time of writing.

I can see why L1 may have decided to sell if there’s little upside to maintaining the position size it held in Santos shares. Other opportunities could be more attractive. In L1’s view, it’s good to look at businesses with low price/earnings (P/E) ratios and growing earnings.

The post Is the Santos share price a buy or a sell amid the Middle East events? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• ASX 200 energy shares lift as pessimism over Iran war deepens
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Deep Yellow, Develop Global, Resolute Mining, and Santos shares are pushing higher 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 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.

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week with a small decline. The benchmark index fell slightly to 8,786.5 points.

Will the market be able to bounce back on Monday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set for a subdued start to the week despite a relatively good finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 3 points lower. In the United States, the Dow Jones was down 1.5%, the S&P 500 rose 0.8%, and the Nasdaq jumped 1.6%.

Oil prices mixed

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) will be on watch on Monday after a mixed night for oil prices on Friday night. According to Bloomberg, the WTI crude oil price was down 1.5% to US$94.40 a barrel and the Brent crude oil price was up 0.25% to US$105.33 a barrel. However, with the US cancelling peace talks with Iran over the weekend, oil prices could be on the move again when Asian markets open.

PLS shares named as a hold

PLS Group Ltd (ASX: PLS) shares are fairly valued according to analysts at Bell Potter. In response to the lithium miner’s quarterly update, the broker has retained its hold rating on the lithium miner’s shares with an improved price target of $5.50. It said: “We maintain our Hold recommendation. At current lithium market prices, PLS will generate substantial earnings and cash flow ahead of the restart of the 200ktpa Ngungaju processing plant. P2000 and Colina development studies are being progressed, providing substantial organic growth optionality in markets with strong underlying EV and BESS-led long term demand fundamentals.”

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good start to the week after the gold price pushed higher on Friday night. According to CNBC, the gold futures price was up 0.35% to US$4,740.9 an ounce. This couldn’t stop the precious metal from recording a weekly decline on inflation and rate hike concerns.

BHP and Rio Tinto shares on watch

Mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) will be on watch on Monday after a poor finish to the week for their London listed shares. Both miners saw their shares fall around 1% on the LSE. This may have been driven by a pullback in copper prices on Friday.

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

More reading

• Market alert: 2 major ASX bank shares could fall double digits
• 3 reasons to buy BHP shares now and hold for the next decade
• Experts are bullish about the potential of this ASX 200 share!
• Australian couples vs singles: who needs more superannuation to retire?
• Nervous investors turn to ASX 200 defensives as global energy shock drags on

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The two biggest ASX bank shares have been standout performers over the past five years, comfortably beating the broader market. While the S&P/ASX 200 Index (ASX: XJO) has gained around 24% in that time, Commonwealth Bank of Australia (ASX: CBA) has surged roughly 96% and Westpac Banking Corporation (ASX: WBC) has climbed about 56%.

But the tide may be turning. Despite their strong run, signs are emerging that the sector could be running out of steam. And some experts believe the slowdown could have further to go.

CBA: Premium pricing under pressure

CBA shares have continued to push higher in 2026, rising around 8% year to date. That’s despite long-running concerns that the $292 billion ASX bank share is trading well above fair value.

Analysts widely agree that the bank’s valuation looks stretched compared to its peers, with its current price not fully supported by underlying fundamentals. At the time of writing, CBA trades on a price-to-earnings (P/E) ratio of 28. That’s significantly higher than other major Australian bank stocks.

With shares sitting at $174.49, CBA is also up about 6% over the past 12 months. Yet broker sentiment remains overwhelmingly negative. According to TradingView data, 14 out of 16 brokers rate the stock as a sell or strong sell, with just two suggesting a hold.

The average price target sits at $129.88, implying around 28% downside from current levels. Some bearish forecasts go even further, suggesting the shares could fall as low as $90 within the next year. That’s a potential drop of nearly 50%.

Westpac: Cracks appearing in outlook

This $133 billion ASX Bank share is another big four bank facing growing scepticism. While its share price has performed well — up 1% year to date and 22% over the past 12 months to $39.01 — concerns are building about the road ahead.

In a recent trading update, the bank flagged risks stemming from disruptions in energy markets, warning that supply shocks could drive higher inflation and interest rates. That combination is likely to weigh on economic activity and place additional strain on borrowers.

Westpac also acknowledged that a softer economic backdrop could prove challenging for some of its customers. Following the update, several brokers downgraded their outlook on the stock, shifting to more cautious or outright bearish positions.

Consensus estimates now point to a strong sell rating, with an average price target of $34.75. That suggests a potential downside of around 11% from current levels.

Foolish Takeaway

After years of outperformance, Australia’s major banks may be entering a more difficult phase. Elevated valuations, slowing economic conditions, and cautious broker sentiment all point to increased downside risk, particularly for CBA and Westpac.

While ASX bank shares have long been seen as reliable income generators, investors may need to reassess whether current prices adequately reflect the challenges ahead.

The post Market alert: 2 major ASX bank shares could fall double digits appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 3 reasons to buy BHP shares now and hold for the next decade
• Experts are bullish about the potential of this ASX 200 share!
• Australian couples vs singles: who needs more superannuation to retire?
• Nervous investors turn to ASX 200 defensives as global energy shock drags on

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 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.

There is no shortage of ways to invest in the ASX share market.

You can chase growth, focus on income, or try to time the next big move. But if I had to start fresh today, I would keep things much simpler.

I would build an ASX share portfolio that covers the key building blocks of long-term investing.

Start with broad market exposure

The first piece would be diversification.

Instead of trying to pick every winner, I would want exposure to a large group of ASX shares from the outset. That is where an exchange-traded fund (ETF) can play a role.

For example, the Vanguard Australian Shares Index ETF (ASX: VAS) provides exposure to a broad range of companies across the ASX. It includes large, mid, and small-cap stocks in one investment.

That gives you a foundation.

You are not relying on a single company to perform. You are participating in the broader market over time.

Add a quality growth layer

Once that base is in place, I would look to add a smaller number of individual ASX shares with clear growth potential.

One example I would consider is TechnologyOne Ltd (ASX: TNE).

It is a software business that continues to grow its customer base and expand its recurring revenue. What I like is the visibility. Subscription models tend to create more predictable earnings over time.

This part of the portfolio is about adding growth on top of the broader market exposure.

Include a steady income contributor

The final piece would be income.

Even if I am focused on long-term growth, I still like the idea of having some cash flow coming in along the way.

A company like Transurban Group (ASX: TCL) fits that role. It owns toll road assets that generate steady, inflation-linked revenue. Similarly, Woolworths Group Ltd (ASX: WOW) could also do a job.

They could support consistent distributions and add a more defensive element to the portfolio.

Keep it manageable

One thing I would avoid is overcomplicating things.

You do not need 20 or 30 holdings to get started. A small number of well-chosen investments can be enough.

This also makes it easier to stay on top of what you own and remain confident during periods of market volatility.

Build over time

This structure is only the beginning.

From there, I would look to add regularly. Whether it is monthly or whenever cash becomes available, consistency is what builds the portfolio.

Over time, those contributions can have a bigger impact than trying to pick the perfect entry point.

Foolish takeaway

If I had to build a simple ASX share portfolio today, I would focus on three things.

Broad market exposure, a layer of growth, and a source of income.

It is not complicated, but I think that is the point. A simple approach, applied consistently over time, can go a long way in building wealth.

The post If I had to build a simple ASX portfolio today, this is what I’d do appeared first on The Motley Fool Australia.

More reading

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• Nervous investors turn to ASX 200 defensives as global energy shock drags on
• All-weather ASX ETFs to buy if the market crashes 20%
• The Warren Buffett rule I keep coming back to with ASX shares
• 3 ASX dividend shares I’d hold through anything

Motley Fool contributor Grace Alvino has positions in Transurban Group and Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One and Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban Group and Woolworths Group. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

BHP Group Ltd (ASX: BHP) shares have never been a straight-line story.

The mining giant’s share price has gained nearly 200% over the past decade, but that journey has included plenty of ups and downs. That’s the nature of a business tied to commodity cycles. Even so, the past 12 months alone have seen BHP shares climb roughly 47%.

To put it in perspective, the S&P/ASX 200 Index (ASX: XJO) has risen 68% over ten years and 11% over the past 12 months.

So why consider buying now and holding through to 2036?

Strong operations across key commodities

Despite volatile commodity prices, BHP’s core operations continue to deliver.

The company has reported record production from its Western Australian iron ore operations and solid output from its copper division. Iron ore remains on track to meet full-year guidance, while copper production is expected to land in the upper half of its range.

That consistency matters. When multiple divisions are performing well at the same time, it supports earnings stability and strong cash generation.

There’s also a bigger picture at play. Global demand for key resources – especially copper – is expected to grow as the world transitions toward cleaner energy. Copper is essential for electric vehicles, renewable energy systems, and power infrastructure.

If that trend plays out, BHP shares are well positioned to benefit.

Reliable income with strong dividend history

BHP shares aren’t just about growth, it’s also a major income stock.

The company has a long track record of paying dividends, with distributions stretching back nearly two decades. It typically targets a payout ratio of at least 50% of earnings, which means shareholders benefit directly when commodity prices are strong.

Yields often sit in the 4% to 6% range and are usually fully franked, making them particularly attractive for Australian investors.

Of course, dividends can fluctuate with earnings. But over time, BHP has proven it can deliver meaningful income across cycles.

Financial strength and long-term growth

Another key reason to watch BHP shares is the company’s balance sheet and future pipeline.

The company has strengthened its financial position through asset sales and strategic deals, including a major silver streaming transaction. These moves have generated significant cash and reinforced an already robust balance sheet.

That financial flexibility is critical. It allows BHP to invest in new projects while still returning capital to shareholders.

One standout project is the Jansen potash development in Canada, with first production expected around mid-2027. This adds exposure to a completely different commodity – fertilisers – providing diversification beyond iron ore and copper.

At the same time, BHP continues to focus on low-cost operations and disciplined capital allocation. That approach helps protect margins, even when industry costs rise.

Foolish Takeaway

BHP shares will always be influenced by commodity cycles – that’s unavoidable. But with strong operations, reliable dividends, and exposure to long-term demand trends, the company offers a compelling case for patient investors.

For those willing to ride out the ups and downs, BHP could remain a powerful long-term holding well into the next decade.

The post 3 reasons to buy BHP shares now and hold for the next decade appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Market alert: 2 major ASX bank shares could fall double digits
• Experts are bullish about the potential of this ASX 200 share!
• Australian couples vs singles: who needs more superannuation to retire?
• Nervous investors turn to ASX 200 defensives as global energy shock drags on

Motley Fool contributor Marc Van Dinther has positions in BHP Group. 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 BHP 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 now trading well below where they were just a few months ago.

The recent 33% pullback from its high has largely been driven by external factors, particularly the conflict in the Middle East and the sharp rise in oil prices. Jet fuel costs have surged, creating uncertainty and weighing on sentiment.

When I look at it now, I see an opportunity to buy into the airline business at a cheaper price. Here are three reasons I would consider buying Qantas shares.

Strong demand is still there

One of the most important things to me is whether demand has held up.

Based on its market update this month, that appears to be the case.

Qantas continues to see strong demand for international travel, particularly to Europe, even as it adjusts routes and capacity in response to the current environment.

Domestic demand also remains solid, supported by both business and leisure travel.

That tells me the core business is still functioning well. The issue is not a lack of customers, it is the cost side of the equation.

The business has levers to respond

Airlines are not passive when conditions change.

Qantas has already taken steps to manage the impact of higher fuel costs. That includes adjusting capacity, redeploying aircraft, and increasing fares where needed.

This is important. It shows the company has some ability to respond rather than simply absorbing higher costs. While it may not fully offset the impact in the short term, it can help protect margins over time.

The company has also hedged a large portion of its fuel exposure, which provides some buffer against further volatility.

Long-term improvements are still underway

The third reason comes back to what the business is building.

Qantas is in the middle of a major fleet renewal, with new aircraft continuing to arrive and more expected over the next 18 months.

These aircraft are more efficient, support new routes, and improve the overall customer experience.

At the same time, the Loyalty division continues to grow and diversify earnings, with over 18 million members and expanding partnerships.

These are long-term drivers. They are not going to show up in a single quarter, but they can shape how the business performs over the next decade.

Foolish takeaway

Qantas shares have fallen heavily due to rising fuel costs and global uncertainty.

But demand remains strong, the company has levers to respond, and long-term investments are still progressing.

With the share price down 33%, I think this looks more like an opportunity to buy a quality business at a lower price rather than a sign that the long-term story has changed.

The post Down 33%: Here are 3 reasons I’d buy Qantas shares appeared first on The Motley Fool Australia.

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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.