Tag: Stock pick

Owning Fortescue Ltd (ASX: FMG) shares has been a very rewarding experience when it comes to passive income over the last several years. It has delivered huge dividends thanks to the strength of the iron ore price.

Fortescue is now one of the purest ways to invest for exposure to the iron ore industry. These days, BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) both have large copper operations, which gives investors useful diversification.

Nearly all of Fortescue’s value is related to iron ore, and the upcoming dividends will be quite dependent on what happens with the resource price.

We’re going to take a look at what’s forecast for the FY27 Fortescue dividend.

Dividend projection

In FY26, the company reported revenue growth of 9% to US$17 billion, underlying operating profit (EBITDA) rose 9% to US$8.6 billion, operating cash flow improved 6% to US$6.8 billion, free cash flow jumped 25% to US$3.2 billion, underlying net profit after tax (NPAT) grew 3% to US$3.46 billion, and in Australian dollar terms, underlying earnings per share (EPS) only declined by 2% to A$1.66.

That led to the business reducing its annual dividend per Fortescue share by 2% to A$1.08, while keeping the dividend payout ratio at 65%.

The forecast on Commsec suggests a significant decline in the earnings and dividend in the 2027 financial year.

That projection shows EPS could drop to $1.32, which is expected to lead to a fall in the dividend. The estimate on Commsec suggests the annual payout could reduce to 84.6 cents per share, a cut of 22% compared to the FY26 level.

That projected amount suggests the business could pay a dividend yield of 5.2% excluding franking credits and 7.4% including franking credits.

What would a $6,000 investment in Fortescue shares unlock in dividends?

The Fortescue share price is now a lot cheaper, it has dropped 26% this year. When share prices fall, the dividend yield gets a boost. So, prospective investors could still get an appealing dividend yield due to the decline in the Fortescue share price.

Buying $6,000 of the ASX mining share would allow an investor to buy 366 Fortescue shares, with a little bit of change left. If Fortescue does pay that projected amount of 84.6 cents, then it would create $309.64 dividend cash and $442.34 overall income, including franking credits.

Analysts are, overall, quite neutral on the business. According to Commsec, there are currently two buy ratings on the business, 10 hold ratings and four sell ratings. Therefore, it looks like other ASX shares could be better opportunities to buy.

The post If I buy $6,000 of Fortescue shares, how much dividend income will I receive? appeared first on The Motley Fool Australia.

More reading

• How much do I need in ASX dividend shares to receive $15,000 passive income per year?
• Fortescue vs Wesfarmers: Which ASX share is better for passive income in 2026?
• What do brokers tip for Fortescue shares over the next 12 months?
• Fortescue vs Commonwealth Bank: Which is best for passive income?
• 3 ASX dividend shares offering gross yields of 8% or more

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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Steadfast Group vs AUB Group shares: Which insurance broker offers better value?

Choosing between Steadfast Group Ltd (ASX: SDF) and AUB Group Ltd (ASX: AUB) can be a tough ask for investors focused on Australia’s bustling insurance broking industry. Both are heavyweights with strong broker networks, proud dividend histories, and a growing international presence. But when it comes to value for your investment dollar, how do these two stack up? Here’s my take, with a focus on the numbers that really set them apart.

The case for Steadfast

Steadfast is the largest general insurance broker network and group of underwriting agencies in Australia and New Zealand, with a footprint spanning more than 430 brokers and around 2,000 offices according to its most recent public description. The company’s reach extends to Singapore, the UK, Germany, and more recently, the United States – thanks to recent acquisitions and the rollout of the ISU Steadfast brand.

Standout fundamentals for Steadfast Group:

• Market capitalisation sits at $6.38 billion, making it the biggest listed player in its patch.
• P/E ratio of 23.58, which is relatively moderate for the sector.
• Dividend yield of 3.66%, fully franked.
• Year to date return of 12.49%, showing positive momentum in a tough market.

Steadfast also offers 100% franking on all dividends, and its payout has steadily increased over recent years based on the data provided. The group acts not just as a broker but a consolidator, directly owning stakes in a host of its network businesses.

The case for AUB

AUB Group is another major insurance services player, boasting a significant broker network across Australia, New Zealand, the US, the UK, and Europe. According to its most recent profile, the AUB network covers more than 570 locations and writes a substantial amount of gross written premium. Like Steadfast, AUB holds equity stakes in partner brokerages and various underwriting agencies.

Key fundamentals for AUB:

• Market cap of $3.63 billion, about half the size of Steadfast.
• P/E ratio of 36.74 – noticeably higher than Steadfast’s.
• 3.41% fully franked dividend yield.
• Year to date return of -3.51%, marking a negative trend so far this year.

AUB also boasts 100% franking and a long, reliable record of dividend payments, with the most recent full-year payout reaching $0.98 per share.

Valuation comparison

Here’s how these two insurance brokers shake out on the key numbers:

Metric	Steadfast Group	AUB Group
Market Cap	$6.38 billion	$3.63 billion
P/E Ratio	23.58	36.74
EPS	0.243	0.782
Dividend Yield	3.66% (100% franked)	3.41% (100% franked)
Dividend per share	$0.21	$0.98
YTD Return	12.5%	-3.5%

A few things stand out: Steadfast trades at a significantly lower P/E ratio than AUB. Both companies’ dividends are fully franked, though AUB pays out a higher absolute amount per share, likely due to its higher share price. The dividend yields are similar, but Steadfast edges slightly higher.

Note: AUB Group’s reported P/E ratio (36.74) and EPS (0.782) suggest a price much higher than the current trading level. Steadfast’s P/E and EPS also don’t exactly align. The disparity could be due to differences in the way the earnings figure is calculated for each ratio (for example, normalised or forward earnings).

Recent share price performance

Comparing recent share price activity up to 24 September 2026:

• Steadfast Group closed at $5.74, up 12.5% for the year to date, with steady, gentle gains through September and limited volatility.
• AUB Group finished at $27.81, down 3.5% YTD, and experienced more price swings, including a notable -3.24% drop on the last trading day.

Which is the better buy?

If I’m focused on value – especially relative to fundamentals and recent performance – my pick would be Steadfast. The company is larger, has positive momentum (up 12.5% YTD), and trades on a much lower P/E ratio than AUB Group. While AUB pays out a larger absolute dividend per share, Steadfast actually offers a higher yield based on the current share price, and both are 100% franked.

I like that Steadfast is not only maintaining but steadily increasing its dividend, and its international expansion appears to be gaining traction. On the flip side, AUB is a high-quality business but, at the time of writing, seems to be priced at a premium and has lagged on recent performance. Unless you have a strong reason to pay up for AUB’s earnings growth or international footprint, I’d lean towards Steadfast as offering better bang for your investment buck right now.

The post Steadfast vs AUB: Which insurance broker offers better value? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Laura Stewart 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 Aub Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The Pinnacle Investment Management Group Ltd (ASX: PNI) share price may be in focus today as the company reported an NPAT of $176.7 million for the financial year ended 30 June 2026, with its stake in Metrics Credit Holdings contributing $12.6 million to the result.

What did Pinnacle Investment Management report?

• Net profit after tax (NPAT) of $176.7 million for FY26
• Approximately $12.6 million contributed to NPAT from Metrics Credit Holdings
• Pinnacle holds a 35% equity interest in Metrics Credit Holdings Pty Limited
• The Metrics funds—MXT, MOT, and MRE—have paused trading temporarily

What else do investors need to know?

The three Metrics-managed funds—Metrics Master Income Trust (ASX: MXT), Metrics Income Opportunities Trust (ASX: MOT), and Metrics Real Estate Multi-Strategy Fund (ASX: MRE)—have temporarily paused trading on the ASX, pending further announcements. This move has placed a spotlight on both the funds and their manager, Metrics Credit Partners, an affiliate of Pinnacle.

Investors should note that Pinnacle’s exposure to Metrics Credit Holdings represents a significant portion of its earnings, and any updates to the Metrics funds could impact Pinnacle’s reported results or future distributions.

What’s next for Pinnacle Investment Management Group?

Investors will be watching for further details on the reason for the trading pause in the Metrics funds and how any developments might affect Pinnacle’s future income from Metrics. The company continues to benefit from its diversified investment management affiliates, and maintaining strong relationships with its managers may remain a strategic focus.

Looking forward, any resolutions related to the paused funds, and further growth in affiliated manager platforms, could shape Pinnacle’s earnings profile for the coming year.

Pinnacle Investment Management share price snapshot

Over the past 12 months, Pinnacle Investment Management shares have declined 31%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

View Original Announcement

The post Pinnacle Investment Management reports FY26 profit and Metrics funds update appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Karoon Energy Ltd (ASX: KAR) shares are taking a hit on Monday morning, and investors have another setback to digest.

The oil and gas producer’s shares are currently down 12.04% to $1.57, after finishing Friday’s session at $1.785.

It’s another frustrating development for shareholders, particularly after the stock had started to recover some ground over the past month.

So, what’s happened this time?

Why are Karoon shares crashing 12%?

In its announcement, Karoon revealed another operational setback at its Bauna oil project offshore Brazil.

The company identified an electrical fault at its SPS-92 well on 21 September, shutting down production the following day to investigate.

It turns out that one of the three electrical phases supplying power to the well’s downhole pump was faulty.

Production has since resumed using the remaining two phases, although the pump is operating at reduced capacity.

Unfortunately, getting the well back to full production won’t be a quick fix.

Karoon will need a drilling rig to replace the faulty cable system and is already working to secure the necessary permits and services.

Until then, it’s expecting to lose around 3,500 barrels of oil per day.

And with production taking another hit, Karoon has had to lower its expectations for the year.

The company now expects Bauna to produce between 5.4 million and 5.7 million barrels in 2026, down from 6 million to 6.7 million barrels previously.

Who Dat guidance remains unchanged. Karoon now expects total production of 6.6 to 7.2 million barrels of oil equivalent in 2026.

That’s compared with its previous forecast of 7.2 to 8.2 million barrels.

Unit production costs are also expected to increase from US$12 to 15 to US$15 to 16 per barrel.

What about the financial impact?

The good news is that Karoon is expecting its insurance to cover much of the financial damage.

The company anticipates to recover almost all lost production revenue and repair costs, subject to the terms of its insurance policies.

However, the cause of the failure remains under investigation. This means it’s still unclear when any insurance payments will be received.

CEO Carri Lockhart said the fault as disappointing, particularly as the new pump and cable system have been operating for less than 3 months.

Management is now focused on restoring SPS-92 to full production while also looking to increase production from Bauna’s other wells.

Foolish takeaway

I think today’s announcement adds to Karoon’s challenges, especially with the company already dealing with production issues at Who Dat.

The question now is how long it will take to complete the repairs and get production back on track.

I’ll be watching next month’s quarterly update for details on when Karoon expects to restore full production.

The post This ASX energy stock just crashed 12%. Here’s what’s gone wrong appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• Why these ASX shares are worth watching closely today

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 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.

Commonwealth Bank of Australia (ASX: CBA) shares are currently trading around $150.83 as we approach the end of the month.

Here’s what I think of the big four bank’s shares as we head into October.

What does the outlook look like?

One of the things I like about CBA is the strength of the underlying business.

The bank has leading positions across home lending and deposits, a huge customer base, and a strong digital offering. Those advantages have helped it generate consistently strong returns and make it the major bank I would most want to own.

The earnings outlook is steady rather than spectacular.

CBA generated earnings per share (EPS) of $6.58 in FY26. Consensus estimates point to this increasing to $6.67 in FY27 and $6.86 in FY28.

That is only modest growth, but I think there is value in the predictability of those earnings, particularly when combined with CBA’s dividend.

Dividends per share are expected to rise from $5.05 in FY26 to $5.15 in FY27 and $5.30 in FY28.

At today’s share price, the FY27 forecast implies a dividend yield of around 3.4%, before considering any franking benefits.

What about interest rates?

Interest rates could become an increasingly important part of the story in October.

The Reserve Bank of Australia is widely expected to raise the cash rate this week, with the possibility of another increase later in the year.

Higher rates can have mixed implications for banks.

They can provide some support for margins depending on how quickly lending and deposit rates move. At the same time, higher borrowing costs can put additional pressure on households and potentially weigh on credit growth.

For CBA, I think its large deposit base and strong position in Australian banking leave it relatively well placed to navigate that environment.

I would still watch how higher rates affect mortgage customers and competition across the sector, particularly if monetary policy remains restrictive for longer.

Is the valuation too high?

This is where the decision becomes more difficult.

At $150.83, CBA shares are trading on a PE ratio of roughly 22.6 times forecast FY27 earnings and around 22 times FY28 earnings.

That is not a cheap valuation for a mature bank expected to deliver fairly modest earnings growth.

Investors are clearly paying a premium for CBA’s quality, market position, and consistency.

For me, though, valuation is only one part of the equation. I would rather own an excellent bank at a reasonable price than choose a weaker business simply because its PE ratio is lower.

Foolish takeaway

I would still be comfortable buying CBA shares as we head into October.

The valuation is higher than I would ideally like, especially given the modest earnings growth currently forecast. But I think CBA remains the highest-quality major bank on the ASX and is well positioned to keep delivering for shareholders.

At around $150.83, I see CBA as a buy for investors prepared to own it for the long term rather than chase a quick return.

The post Should I buy CBA shares in October? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: CBA, BHP, CSL shares
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• Commonwealth Bank vs Westpac: Which ASX bank stock is the better buy for resilient passive income?
• How I’d build a $50,000 ASX share portfolio today

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia. 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.

The ASX is home to some very impressive Australian stocks. Some are the best in the country at what they do, or even the best in the world.

I’m going to highlight two businesses that I believe are undervalued and have excellent long-term growth potential, in my view.

While they may not be the cheapest Australian stocks in price/earnings (P/E) ratio terms, I think future profit growth will help them deliver market-beating total shareholder returns (TSR).

Breville Group Ltd (ASX: BRG)

Breville is one of the world’s leading coffee machine businesses. It has a number of brands including Breville, Sage, Lelit, Baratza and a coffee beans business called Beanz. Coffee seems like of the things that Australia is a world leader at.

The global adoption of coffee continues to be a strong tailwind for the company. FY26 revenue grew by 6.7% (with global segment growth of 9.7% in constant currency).

Breville said that its young markets of China, South Korea, Mexico and the Middle East delivered collective growth of more than 70%.

Tariffs have been a significant talking point for the last year and a half for the Australian stock (and other affected businesses). Breville’s manufacturing diversification has been substantially complete, with 85% of 120-volt product in gross profit dollar terms is now sourced outside of China.

The company also reported that its FY26 second half gross profit margin was 36.8%, above FY25’s 36.6%, primarily driven by the US sourcing mix.

While profitability was impacted during FY26, it still managed to deliver growth, even if it was a small increase at 1.7%. It was enough to fund a 2.7% increase in the dividend per share to 38 cents.

The projection on Commsec suggests the company’s earnings per share (EPS) could climb to $1.08 by FY27, putting the Australian stock at 28x FY27’s estimated earnings.

Estimates also suggest that EPS could grow by 28% between FY27 and FY29. The company is on track for a promising future.

Wesfarmers Ltd (ASX: WES)

The other Australian stock I want to highlight is Wesfarmers, the owner of Bunnings, Kmart, Officeworks, Priceline and other businesses. I’d describe Bunnings as one of the most ‘Australian’ businesses you could want to own.

Wesfarmers has proven to be very effective at delivering earnings growth over the years thanks to the quality of Bunnings and Kmart. They both have incredibly high returns on capital (ROC) for physical retailers and have managed to find a number of appealing places to invest to grow their earnings.

For example, Bunnings has invested in product ranges such as pet care and auto care, allowing it to compete with leaders in those respective segments.

As value leaders, Kmart and Bunnings are well-placed to serve customers during this period of a higher cost of living, which I believe will lead to a rising market share.

Wesfarmers’ return on equity (ROE) above 30% shows how profitably it puts new money to work. Over the long term, I think Wesfarmers’ earnings per share (EPS) can grow, particularly as it expands in areas like lithium and healthcare, both of which are growth areas.

According to the projection on Commsec, the Australian stock is valued at 27x FY27’s estimated earnings.

The post 2 strong Australian stocks to buy now with $9,000 appeared first on The Motley Fool Australia.

More reading

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• How I’d build a $50,000 ASX share portfolio today
• Fortescue vs Wesfarmers: Which ASX share is better for passive income in 2026?
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Motley Fool contributor Tristan Harrison has positions in Breville Group. 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.

Technology remains one of the areas of the market where I see plenty of long-term growth ahead.

That is why the Vanguard Global Technology Index ETF (ASX: VTEK) has caught my attention.

If I had $5,000 to invest in a Vanguard ETF today, this is one I would be happy to buy and hold for the long term.

A way to invest in AI

Artificial intelligence (AI) would be one of my main reasons for owning the VTEK ETF.

The current AI boom requires enormous investment in computing power, semiconductors, cloud infrastructure, and software. This Vanguard ETF gives investors exposure to businesses operating across several parts of that chain.

NVIDIA, for example, has become one of the most important suppliers of the chips used to train and run AI models.

But the opportunity extends beyond chip designers. Taiwan Semiconductor Manufacturing manufactures many of the advanced semiconductors required across AI and other high-performance computing applications.

For me, that is one of the strengths of the VTEK ETF. Instead of trying to identify the single company that will benefit most from AI, investors can gain exposure to several businesses helping build the infrastructure behind it.

More than one technology trend

AI may be generating most of the headlines, but I would not invest $5,000 in this ETF based on that theme alone.

Technology spending continues to spread through almost every part of the economy.

Businesses are shifting more operations to the cloud, adopting new software tools, automating processes, and using data in increasingly sophisticated ways.

Microsoft is a good example of how several of these trends can come together. Its position in cloud computing and business software means it can benefit as companies invest more heavily in digital infrastructure while also introducing AI capabilities across existing products.

The fund also provides exposure to consumer technology through companies such as Apple.

That broader mix is important to me because it means VTEK is not dependent on one product cycle or one area of technology spending.

Why I like this Vanguard ETF’s structure

Another thing I like is simplicity.

Building a portfolio of individual global technology shares would require deciding how much to allocate to semiconductors, software, cloud computing, hardware, and other parts of the sector.

The Vanguard Global Technology Index ETF does that through a single ASX investment while providing exposure to a large collection of global technology companies.

That makes it an easy way for me to add a dedicated technology allocation alongside broader Australian or international investments.

There is a trade-off, though. This is still a sector-focused ETF, so I would expect it to be more volatile than a broad global shares fund. Its largest holdings also have a meaningful influence on performance.

For that reason, I would see this Vanguard ETF as one part of a diversified portfolio rather than something I would build an entire portfolio around.

Foolish takeaway

If I had $5,000 available for a long-term investment, this Vanguard ETF would be high on my list.

I like that it provides exposure to the infrastructure supporting AI, while also capturing growth across cloud computing, software, semiconductors, and consumer technology.

Technology will almost certainly look different a decade from now. Rather than trying to predict which individual company will dominate, I would be comfortable owning a fund positioned across several of the areas driving that change.

The post Why I’d invest $5,000 in this Vanguard ETF 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 positions in and has recommended Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

DroneShield Ltd (ASX: DRO) shares are sliding today.

Shares in the S&P/ASX 200 Index (ASX: XJO) AI-powered drone defence stock closed on Friday trading for $1.61. In morning trade on Monday, shares are swapping hands for $1.58 apiece, down 2.2%.

For some context, the ASX 200 is up 0.2% at this same time.

That’s today’s price action for you.

Now here’s the latest top leadership news.

DroneShield shares get new non-executive director

In a market announcement this morning, deemed non-price sensitive to DroneShield shares, the company reported the appointment of Lynne Saint as a non-executive director. Saint will step into the role on 24 November.

Saint currently serves on the board of Nufarm Ltd (ASX: NUF) and Ventia Services Group Ltd (ASX: VNT), where she chairs the Audit, Risk and Compliance Committee and is a member of the Nominations Committee, People and Remuneration Committee, and Safety and Sustainability Committee.

DroneShield chairman Hamish McLennan noted that the appointment is further evidence of the board’s renewal process.

McLennan said:

I welcome Lynne’s appointment to the DroneShield Board where her deep experience across audit, financial leadership, enterprise risk, supply chain risk and project management will be valuable as part of the strategic oversight and governance as the company continues to scale and expands its global footprint.

Saint added:

DroneShield is an impressive Australian technology company operating in a strategically important and rapidly evolving global industry.

I am delighted to be joining the Board at this stage of the company’s development, and I look forward to contributing my skills and experience as it continues to grow.

What’s the latest from the ASX 200 drone defence stock?

With today’s intraday moves factored in, DroneShield shares are down 59.6% since this time last year.

The ASX 200 drone defence stock released its half year results (H1 2026), covering the six months to 30 June, on 26 August.

Highlights included all-time high first half profits of $125.8 million, up 74% from H1 2025.

But things weren’t so rosy on the earnings front.

DroneShield reported an underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of $12.4 million for the half year, down from a positive EBITDA of $8 million in the prior corresponding half.

The company said the loss was driven by “a period of planned investment in production capacity, product development, organisational systems and management capability to support larger global operations”.

On the bottom line, DroneShield’s statutory net loss after tax of $32.2 million was down from the $2.1 million profit reported in H1 2025.

DroneShield shares closed down 11.0% on the day of the results release.

The post Buying DroneShield shares? Meet your new board director appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 DroneShield. 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 shares with large dividend yields could be an excellent choice during this period of higher inflation and interest rates.

Yes, savings accounts and bonds are now offering a higher interest rate. But, I don’t think interest rates are going to go much higher, so the current lower share prices mean high dividend yields for investors.

I think the following two stocks are some of the best options that passive income investors can buy.

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia is a listed investment company (LIC) with a very charitable cause.

It donates 1% of its net assets each year to charities focused on supporting youth.

The ASX share has a portfolio invested in the funds of 16 fund managers, which means a lot of diversification. It invests a lot more in smaller, growing businesses than the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA) gives weighting to.

Over time, I think smaller businesses can deliver more growth and more compounding than the large ASX blue-chip shares.

Future Generation Australia has been a very good option for reliable dividends during its life. The ASX share has grown its annual dividend per share every year since it started paying dividends in 2015.

In FY26, it expects to hike its annual dividend per share by 5.6% to 7.6 cents. That’s a forward grossed-up dividend yield of 8.3%, including franking credits, at the time of writing.

Universal Store Holdings Ltd (ASX: UNI)

The other ASX share I want to highlight is Universal Store, which owns multiple brands focused on providing premium apparel products. Those brands include Universal Store, Perfect Stranger, and CTC (Worship and THRILLS).

Its products are resonating with customers with a strong performance across its two core brands, as well as increasing profitability.

In FY26, group sales rose 12.9% to $376.1 million. Universal Store total sales grew 11.5% to $313.3 million, amid like-for-like sales growth of 8.1%. Perfect Stranger total sales grew 40.8% to $35.9 million, boosted by LFL sales growth of 13%.

The FY26 group gross profit margin rose 140 basis points (1.40%) to 62.5%, underlying operating profit (EBIT) climbed 17.2% to $64 million, and underlying net profit after tax (NPAT) climbed 16.3% to $40.5 million. Each of those margins improved, which comes after a number of years of improvement.

The above profit growth helped it hike its annual dividend per share by 11.7% to 43 cents.

It seems like all the company needs to keep doing is producing good clothing and rolling out more stores for success.

In the first seven weeks of FY27, direct-to-customer sales were up another 9.1%, with Universal Store sales growth of 5.5% and Perfect Stranger sales growth of 45.8%.

Management intends to open another 16 to 20 stores in FY27, which could help drive its financials further.

According to the projection on CommSec, the company could grow its dividend to 45 cents per share. That means it’s trading with a potential grossed-up dividend yield of 8.6%, including franking credits, at the time of writing.

Impressively, the Universal Store dividend has grown each year since it started paying a dividend in 2021.

The post 2 ASX shares with dividend yields above 8% appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia. 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 Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Another interest rate hike is looking almost certain on Tuesday, but how much more can our economy take?

The Reserve Bank of Australia (RBA) has already lifted rates 3 times this year, and another 2 increases could be on the way.

According to The Australian, HSBC chief economist Paul Bloxham now puts the risk of Australia falling into recession at around 50%.

He expects the cash rate to reach 4.85% by November, which isn’t exactly welcome news for anyone with a mortgage.

With economic growth already slowing, there’s a chance the RBA could go too far with rate hikes and push the economy into recession.

So, what does HSBC see coming?

HSBC sees recession risk climbing

Bloxham expects the RBA to lift the cash rate by 25 basis points tomorrow, taking it from 4.35% to 4.60%.

And while another increase is expected in November, his bigger concern is what those additional rate hikes could do to the economy.

HSBC expects economic growth to come close to stalling around the end of the year, potentially leaving Australia facing a technical recession.

That would mean two consecutive quarters of economic contraction, something we’ve largely managed to avoid outside the COVID-19 pandemic.

And that’s something investors will want to keep an eye on.

Higher borrowing costs and weaker consumer spending could hurt earnings across the ASX, especially among banks and retailers.

Bloxham is also expecting property prices to fall 13% from their peak, which would be the biggest decline in up to 40 years.

That could spell further trouble for housing-related stocks, particularly if fewer people are buying and selling properties.

Not everyone is expecting a recession

Of course, not every economist thinks we’re heading for a recession, with Westpac Banking Corp (ASX: WBC) expecting the economy to keep growing.

Its modelling points to quarterly growth of 0.6%, with investment in data centres expected to help keep things moving.

But Bloxham isn’t convinced that spending will make much of a difference.

He estimates around 85% of the investment involves imported equipment, meaning much of the money could end up going overseas.

For ASX investors, the next few months will be worth watching, particularly as companies start feeling the impact of higher interest rates.

And while a recession isn’t guaranteed, I’d be careful with stocks that depend heavily on people continuing to spend.

What happens next?

Tomorrow’s RBA decision is the next big one to watch, followed by Wednesday’s inflation figures.

All 29 economists surveyed by Bloomberg expect another 25-basis-point hike this week, although they’re not certain about what happens in November.

Nonetheless, the RBA will need to be careful how much further it pushes rates.

The post Australia’s recession risk hits 50% as RBA prepares to lift rates appeared first on The Motley Fool Australia.

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HSBC Holdings is an advertising partner of Motley Fool Money. 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 recommended HSBC Holdings. 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.