Tag: Stock pick

The Xero Ltd (ASX: XRO) share price has had a terrible time over the past year, dropping by more than 60%, as the chart below shows.

The cloud accounting software provider has lost investor confidence, and its profitability isn’t growing as it used to.

Xero’s latest result was mixed.

Earnings recap

In the 2026 financial year result, meaning the 12 months to 31 March 2026, customers grew 11% to 4.9 million, operating revenue grew 31% to $2.75 billion, operating profit (EBITDA) grew 24% to $790 million, net profit after tax (NPAT) declined 27% to $167 million, and free cash flow rose just 9% to $554 million.

Xero said that Melio-related acquisition costs affected its profitability. While the market may not be totally convinced about Melio, it could be crucial to growth in the US.

Its international markets are growing strongly – that’s countries beyond Australia and New Zealand – international revenue grew 47% to $1.4 billion or 25% on an organic basis excluding Melio. US revenue grew 240%, or 30% on an organic basis excluding Melio. UK revenue grew 26%, with customer growth of 14%.

ANZ continues to see solid growth, with revenue rising 18% to $1.4 billion.

Xero is leaning on price rises to be a significant driver of its financials, which is helping drive a number of revenue metrics. Average revenue per customer grew by 23% to $55.44, annualised monthly recurring revenue (AMRR) soared 37% to $3.27 billion and the total lifetime value (LTV) of customers increased 17% to $21 billion.

The ASX tech share said that it expects operating revenue to be at least $3.6 billion and adjusted EBITDA to be at least $860 million, implying year-over-year growth of at least 30% and 13.6%, respectively.

Is the Xero share price a strong buy?

There are certainly plenty of concerns about what AI could mean for software players like Xero, but its financials continue to show progress, which will likely re-energise the market in the future, in my view.

According to CMC Invest, the business has received three analyst ratings in the past three months.

Of those three analysts, the average price target is $108.53, suggesting a rise of 89% over the next year. Even the most pessimistic of the three analysts has a price target of $85, suggesting a possible rise of 48% over the next year.

Clearly, analysts think the business is undervalued, and the multiple looks reasonable based on free cash flow. If its financials can excite the market again, it could be materially undervalued.

The post How much could the Xero share price rise in the next year? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Xero, South32, Woodside shares
• 5 best ASX shares to buy in October
• How I’d build a $50,000 ASX share portfolio today
• Xero shares have crashed 64%. Here’s why I’m buying
• These 3 ASX 200 shares have lost 49%+ in 2026. Are any now bargains?

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

It’s shaping up to be an interesting start to the week for Northern Star Resources Ltd (ASX: NST) shareholders.

The gold mining giant has had a difficult run lately, with its shares falling despite gold prices remaining relatively high.

And following reports over the weekend, investors have something else to consider when trading gets underway today.

Northern Star shares finished Friday’s session down 0.72% at $22.11, leaving the stock around 17% lower in 2026.

So, what’s happened?

Northern Star rejects takeover approach

According to The Australian, Northern Star has rejected a takeover approach from South African mining giant Gold Fields Ltd (JSE: GFI).

Gold Fields is reportedly considering its next move after Northern Star knocked back the proposal.

Northern Star has a market capitalisation of approximately $31.5 billion, making it one of Australia’s largest gold producers.

Gold Fields already has a significant presence in Western Australia, having acquired Gold Road Resources for roughly $3.7 billion last year.

That deal gave it full ownership of the Gruyere gold mine, which the two companies previously operated through a joint venture.

A takeover of Northern Star would add several major Australian gold mines to its portfolio, including the Super Pit in Kalgoorlie.

It would also create one of the world’s largest gold producers.

Elliott has been pushing for change

The reported takeover approach comes as Northern Star faces growing pressure from US activist investor Elliott Investment.

Elliott holds approximately 6.24% of Northern Star following a difficult period of operational setbacks and disappointing shareholder returns.

In June, the investor identified Gold Fields, AngloGold Ashanti, Agnico Eagle, and Newmont Corporation (ASX: NEM) as potential strategic partners.

It has also been calling for changes to Northern Star’s board, and some of those changes are already underway.

Former Anglo American boss Mark Cutifani and mining executive Peter Rozenauers are set to join the board on 1 October.

Meanwhile, Suresh Vadnagra will take over as chief executive on 5 October, with chairman Michael Chaney stepping down in November.

Foolish takeaway

The big question now is whether Gold Fields returns with another approach or decides to walk away.

I think the reported takeover interest is positive news for shareholders, especially after the stock’s difficult run this year.

With new leadership coming in and several potential buyers already identified, I suspect this won’t be the last approach.

Northern Star shares have fallen 9% over the past month, so shareholders could certainly use some positive news.

I’ll be watching from the sidelines to see whether the takeover news helps the stock recover some of its recent losses.

The post Northern Star shares on watch after major takeover approach rejected appeared first on The Motley Fool Australia.

More reading

• Northern Star Resources rejects $38.7bn Gold Fields takeover offer
• 5 things to watch on the ASX 200 on Monday
• Northern Star vs BHP: Which ASX share is better for passive income?
• Why I’d buy the dip in top ASX 200 gold stocks like Newmont, Northern Star and Evolution Mining shares today
• 5 things to watch on the ASX 200 on Friday

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.

The Orica Ltd (ASX: ORI) share price is under the spotlight after the company announced it has secured ammonium nitrate supply for North American customers in FY2027, and provided an update on its surplus land sales in Australia.

What did Orica report?

• Sourced ammonium nitrate supply for North America covering FY2027 contracts
• Increased supply to come from US producers and the Carseland plant in Canada
• Acquisition of Nelson Brothers’ explosives business adds supply chain infrastructure
• Negotiations for Deer Park (Victoria) land sale delayed beyond FY2026
• No material margin impact expected in FY2027 despite higher sourcing costs

What else do investors need to know?

Orica reassured shareholders that the increased cost of sourcing ammonium nitrate for North America will be offset by optimised logistics, ongoing cost reduction initiatives, and favourable customer arrangements. The company’s global supply network, strengthened by the Nelson Brothers acquisition, is expected to support ongoing security and diversification of supply.

On the land sales front, Orica confirmed that the planned contract exchange for surplus Deer Park land will now happen after FY2026, following changes in market conditions. However, this has no impact on the company’s core business or current operations.

What did Orica management say?

Commenting on the update, Orica Managing Director and CEO Sanjeev Gandhi said:

This update highlights Orica’s ability to adapt its supply chain and strengthen the resilience and flexibility of our network while maintaining competitive economics. We will continue to further optimise our network to support the growth in this market. We have made significant progress on our strategic priorities. We completed the integration of Danafloat and the Nelson Brothers explosives business and continue to make strong progress in our organisation-wide cost reduction program. We will remain disciplined in our approach to land divestments to ensure optimal commercial outcomes for our shareholders. Together, these initiatives support Orica’s long-term growth objectives, while delivering sustainable value for shareholders and helping our customers operate more safely, productively and responsibly. The broader business continues to perform strongly, in line with our expectations and Orica continues to maintain a strong balance sheet and liquidity position. Further details, including an outlook for 2027, will be provided at Orica’s upcoming full year results announcement in November.

What’s next for Orica?

Orica says it will continue optimising and diversifying its North American supply chain and integrating recent acquisitions to support growth in the region. It is also committed to taking a disciplined approach to land divestments, seeking value for shareholders as market conditions evolve.

Full year financial results and a detailed outlook for FY2027 are expected to be presented in November, which should provide further clarity for investors.

Orica Limited share price snapshot

Over the past 12 months, Orica shares have risen 7%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

View Original Announcement

The post Orica updates on North American supply and land sales appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Orica, GQG Partners, BHP shares
• This ASX 200 stock just received a fresh buy rating and is tipped to climb 15%
• UBS names its 10 top ASX picks for the next 3-6 months
• ASX 200 mining shares outperform in final week of earnings season

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 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. 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.

The Ingenia Communities Group (ASX: INA) share price is under the spotlight after the company revealed it received a further revised takeover proposal from Warburg Pincus. The proposal values Ingenia at $5.25 per stapled security, up from two previous non-binding offers.

What did Ingenia Communities report?

• Received a further revised non-binding indicative offer at $5.25 cash per stapled security from Warburg Pincus
• Previous offers from Warburg Pincus were $4.75 and $5.05 per stapled security
• Offer remains subject to key conditions: due diligence, exclusivity, board support, debt finance, regulatory clearance, and Peet deal termination
• No recommendation made to securityholders at this stage

What else do investors need to know?

The Ingenia board is still evaluating the Warburg Pincus proposal with help from its financial and legal advisers. There’s no assurance a formal offer will result or that a deal will be completed. Ingenia must also decide whether to terminate its existing Peet Scheme Implementation Deed before moving forward.

Securityholders are not required to take any action at this point. The board is continuing to assess all available options while focusing on the company’s strategic direction and long-term growth goals.

What’s next for Ingenia Communities?

The board will continue to update investors as it evaluates the proposal. Ingenia says it remains committed to executing its strategy and delivering long-term value, regardless of the current takeover interest. Any progress with Warburg Pincus will hinge on detailed due diligence and negotiation of transaction terms.

Ingenia’s focus remains on growth through acquisitions and development across its 96 communities and sites, aiming to capitalise on the growing senior accommodation sector in Australia.

Ingenia Communities share price snapshot

Over the past 12 months, Ingenia Communities shares have declined 17%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

View Original Announcement

The post Ingenia Communities receives further revised $5.25 takeover proposal appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Ingenia Communities rejects revised $5.05 takeover offer
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why are Ingenia shares soaring today?

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 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. 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.

The Northern Star Resources Ltd (ASX: NST) share price is in focus today after the company revealed it received and rejected a conditional takeover bid from Gold Fields Limited, valuing the gold miner at up to $38.7 billion—a 22% premium to its pre-offer price.

What did Northern Star Resources report?

• Northern Star received a non-binding, indicative and confidential proposal from Gold Fields to acquire 100% of its shares via a scheme.
• The offer: 0.3125 new Gold Fields shares (via CHESS Depositary Interests) plus $7.25 cash per Northern Star share.
• Implied value: $27.00 per share based on 11 September 2026 Gold Fields close; $25.19 per share based on 25 September 2026 prices.
• Implied equity value: $38.7 billion initially; $36.1 billion using updated Gold Fields share price.
• Offer represented a 14–22% premium to Northern Star’s recent share price.
• The Board unanimously rejected the bid, citing undervaluation and high completion risk.

What else do investors need to know?

Northern Star’s Board said the proposal was materially opportunistic ahead of key growth milestones, naming the Fimiston Mill commissioning and the start of its incoming CEO as value catalysts. The offer’s 73% scrip component would expose Northern Star shareholders to new regulatory and operational risks in South Africa—risks they don’t currently face.

Conditions also included a lengthy exclusivity period with no room for competing offers, as well as several regulatory approvals that could delay or jeopardise completion. Northern Star made clear it would not engage further unless a more compelling proposal emerges.

What did Northern Star Resources management say?

Chairman Michael Chaney AO said:

Gold Fields has sought to acquire one of the world’s premier gold portfolios at a price that falls well short of what the Board considers to be its fundamental value and at a highly opportunistic time. Furthermore, Gold Fields has asked our shareholders to take nearly three-quarters of the consideration in Gold Fields stock, which carries a meaningfully higher jurisdictional risk profile than the exposure they hold today. These factors, in conjunction with the conditionality of the Indicative Proposal, are the basis on which the Board has unanimously rejected the Indicative Proposal.

What’s next for Northern Star Resources?

Northern Star highlighted its unique position as the owner of high-quality, long-life assets in tier-1 mining jurisdictions. It remains focused on delivering near-term growth, particularly through the ramp-up of the Fimiston Mill—a key catalyst the Board says could unlock further shareholder value.

The company confirmed it will keep the market updated on any further approaches or material events in line with ongoing disclosure obligations.

Northern Star Resources share price snapshot

Over the past 12 months, the Northern Star Resources shares have declined 6%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 2% over the same period.

View Original Announcement

The post Northern Star Resources rejects $38.7bn Gold Fields takeover offer appeared first on The Motley Fool Australia.

More reading

• Northern Star shares on watch after major takeover approach rejected
• 5 things to watch on the ASX 200 on Monday
• Northern Star vs BHP: Which ASX share is better for passive income?
• Why I’d buy the dip in top ASX 200 gold stocks like Newmont, Northern Star and Evolution Mining shares today
• 5 things to watch on the ASX 200 on Thursday

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 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. 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.

The ASX dividend stock Pinnacle Investment Management Group Ltd (ASX: PNI) may not be as cheap as it was at the start of the 2026, but I reckon it’s still great value today.  

As the chart below shows, it has dropped 30% from early August 2026 and it has fallen 47% from February 2025.

Pinnacle describes itself as a global multi-asset investment management platform. It’s substantially domestic and expanding globally, as it compounds earnings and cash flow generation through cycles.

It makes investments in fund managers, called affiliates. It has a portfolio of 19 affiliates across public and private markets, spanning asset classes, investment styles and geographies.

I think it’s a great time to invest in Pinnacle for a few different reasons, starting with the dividend yield on offer.

Strong passive income

The business decided to pay an annual dividend per share of 60 cents in FY26, the same as FY25.

At the time of writing, that dividend yield is 4.4% excluding franking credits and 5.7% including franking credits.

That’s not the biggest dividend yield on the ASX, but it’s a solid starting point for an ASX dividend stock, and I expect further growth as the company’s funds under management (FUM) grow.

Strong funds under management performance

The company is performing strongly for shareholders, with total FY26 net inflows of $33.4 billion, up 44% year over year.

This enabled the business to report that aggregate affiliate FUM grew 28% to $229.4 billion. The rise in FUM helped aggregate affiliate base fees grow 35% to $1 billion.

Pinnacle also reported that net profit after tax (NPAT) grew 31% to $176.7 million and earnings per share (EPS) rose 25% to 78.1 cents.

Management believes that the business should be able to compound EPS at a high rate.

The company highlights that it’s purposefully expanding into larger international markets, through a growing global affiliate presence, expanding its globally relevant product suite and increasing global distribution footprint.

I expect the business will be able to generate growth through ongoing performance of existing affiliate strategies, they can launch new strategies and the Pinnacle portfolio can expand with new names.

Pinnacle notes that 81% of affiliate strategies with a track record of five years or longer have outperformed over a five-year period.

Pinnacle share price valuation

The ASX dividend stock is now valued at less than 16x FY27’s estimated earnings, according to forecast on Commsec.

The projection on Commsec then suggests the business could grow its EPS by 20% in FY28 and increase it by a further 21% in FY29. In other words, it’s suggested that the business could deliver significant earnings compounding over the next few years, which is exactly what could drive the dividend higher.

The predictions suggest the business’ dividend could grow by 70% between FY26 to FY29, which would be pleasing to see.

The post 1 ASX dividend stock down 47% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Macquarie says this ASX financial share could jump 65%
• A rare buying opportunity in 1 of Australia’s top shares?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. 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.

Bell Potter has been busy running the rule over a number of ASX 200 shares.

The good news for two of them is that they have just been upgraded to buy ratings on Monday.

Here’s what the broker is recommending to clients:

Capricorn Metals Ltd (ASX: CMM)

The first ASX 200 share that has been upgraded is gold miner Capricorn Metals.

Bell Potter was pleased to see the company complete the Karlawinda Expansion Project on time. It said:

The new circuit is currently processing low grade ore and will transition to run of mine (ROM) grade ore over the next week, lifting to steady state throughput of 6.5Mtpa and a guided 150kozpa run-rate. This delivers the first leg of growth for CMM, lifting production from the KGP’s prior guided run-rate of ~120kozpa.

In response, the broker has upgraded the ASX 200 share to a buy rating with an improved price target of $18.10 (from $18.05). Based on its current share price of $15.40, this implies potential upside of almost 18%.

Commenting on its investment thesis, Bell Potter said:

CMM’s track record of capital efficient project development and operation can result in growth being priced in early and good value entry points to the stock hard to find. The current pullback offers such an entry point, in our view. We make minor upgrades to our FY27 forecasts, but the KGP completion is largely consistent with our expectations. EPS changes in this report are: FY27: +3%, FY28: 0%, FY29: 0%. Our NPV-based valuation lifts incrementally to $18.10/sh. We upgrade our rating to Buy, following a recent pullback in the share price. CMM is unhedged and debt free, fully funded to grow production from ~120kozpa to +400kozpa in FY29.

Codan Ltd (ASX: CDA)

Another ASX 200 share that has been upgraded by Bell Potter is metal detector manufacturer Codan.

According to the note, the broker has upgraded its shares to a buy rating with an improved price target of $60.00 (from $54.00).

Based on its current share price of $52.25, this implies potential upside of 15% for investors over the next 12 months.

Commenting on the upgrade, Bell Potter said:

We lift EBIT +0%/+4%/+8% across FY27/28/29e on higher Unmanned and Minelab Africa revenue and lower corporate costs, partly offset by lower Minelab ROW sales. TP rises on a target EBIT multiple of 45x, up from 40x, partly offset by a higher risk free rate.

We upgrade to Buy from Hold. Notwithstanding potential supply chain constraints in global electronics which CDA is “monitoring”, we expect current rapidly expanding production rates of Group 2 UAS to drive Communications revenue upgrades in 1H27/FY27. CDA trades at 32x EBIT, a full valuation without consensus upgrades.

The post 2 ASX 200 shares just upgraded to buy ratings appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• This ASX 200 share hit an all-time high yesterday. Is the sky the limit?
• Here are the top 10 ASX 200 shares today
• Viva Energy, Codan, AMP shares reach 52-week highs: How much higher can they go?
• Capricorn Metals shares: Karlawinda Expansion Project completes on time

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.

S&P/ASX 200 Index (ASX: XJO) shares are down 2.2% over 12 months.

Last week, the benchmark index fell to a 15-week low amid expectations of an interest rate hike tomorrow.

Some experts say a fifth rate hike for 2026 may be required in November to sufficiently quell inflation.

Meanwhile, Michael Gable from Fairmont Equities reveals new ratings on three ASX 200 stocks (courtesy of The Bull). 

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price is up 35% over 12 months. 

Gable has a buy rating on this ASX 200 energy share. 

He commented: 

We turned bullish on crude oil prior to the war in Iran due to a looming imbalance between supply and demand.

The war has interrupted supplies, which has led to higher prices. I believe crude oil prices are likely to move higher in the absence of a peaceful and sustained resolution in the Middle East.

I acknowledge some investors doubt crude oil prices will move higher. However, as the largest energy stock on the ASX, buying support should continue to grow for WDS.

South32 Ltd (ASX: S32)

The South32 share price has risen 86% over 12 months. 

Gable has a hold rating on this ASX 200 mining share. 

He explained: 

South32 is a diversified miner with exposure to copper, aluminium, manganese, zinc, silver and lead. The company should benefit as base metal prices continue to trend higher.

The outlook also appears bullish, with the stock recently breaking to new highs.

The company has announced the sale of its aluminium value chain assets to Alcoa for up to $US5.6 billion. This leaves the possibility of a higher capital return to shareholders.

Underlying EBITDA grew by 28 per cent in full year 2026 when compared to the prior corresponding period.

Xero Ltd (ASX: XRO)

The Xero share price has tumbled 64% over 12 months. 

Gable has a sell rating on this ASX 200 tech share. 

He said: 

In my view, potentially increasing bond yields and interest rates will continue to be a headwind for technology stocks, such as XRO.

Fiscal year 2026 operating revenue increased 31 per cent on the prior corresponding period. However, net profit after tax fell 27 per cent.

The gross margin declined from 89 per cent to 83.9 per cent.

From a charting perspective, selling pressure follows share price rallies, so the downtrend may not yet be over at this point.

The post Buy, hold, sell: Xero, South32, Woodside shares appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Woodside vs Westpac: Which ASX share is better for passive income?
• 5 best ASX shares to buy in October
• How I’d build a $50,000 ASX share portfolio today
• Xero shares have crashed 64%. Here’s why I’m buying

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 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.

I’m determined to build a large flow of dividend income in the years ahead. WCM Global Growth Ltd (ASX: WQG) is one of the main names I’m using to build passive income

When I’m thinking about building a stream of dividends, there’s normally a few factors I want to see.

For me, I’m looking for a strong dividend yield, a record of dividend growth, and strong prospects for further payout growth. Let’s run through why the listed investment company (LIC) ticks those boxes so effectively.

Good dividend yield

The ASX stock is already delivering impressive dividend payments to shareholders each year.

During the 2026 financial year, the LIC’s board of directors decided to pay investors four quarterly dividends during the year, totalling 8.52 cents per share.

At the time of writing, this trailing dividend yield translates into a dividend yield of 4% excluding franking credits and 5.8% including franking credits.

But that’s the past. I think investors should focus on what the business’s upcoming dividends could be, since those are the next payouts from the company.

Dividend growth

WCM Global Growth has an impressive dividend history with how it’s increasing its quarterly dividend payment every quarter.

The LIC recently announced its quarterly dividend for the quarter ended 30 June 2026 will be 2.35 cents per share.

It also announced what the next four quarters of dividends will be.

For the three months to September 2026, it will pay 2.45 cents per share.

For the three months to December 2026, it will pay 2.50 cents per share.

For the three months to March 2027, it will pay 2.55 cents per share.

For the three months to June 2027, it will pay 2.60 cents per share.

Those four dividends come to 10.1 cents per share, which translates into a grossed-up dividend yield of 6.9%, including franking credits, at the time of writing.

It also implies that the FY27 fourth quarter passive dividend income will be 10.6% higher than the FY26 fourth-quarter dividend.

Likely payout growth

Dividends are not guaranteed of course, but I think the investment style of the LIC makes it more likely that the business can deliver further dividend growth.

WCM is looking across the global stock market – a big hunting ground – for businesses that have an improving economic moat and a corporate culture that supports the strengthening of the economic moat.

One of the main ways that WCM measures whether a business is improving is looking to see whether it has a rising return on invested capital (ROIC).

Good investment returns make dividend growth much more likely, in my view.

Since the LIC’s inception in June 2017, its net return has averaged 15.6%. That’s been more than enough to pay good dividends and deliver capital growth.

$10,000 of annual passive income

Over the year ahead, I’m expecting WCM Global Growth to pay 10.1 cents per share over the next year.

If the LIC delivers that, then it would require 99,010 WCM Global shares to unlock $10,000 of annual passive income. I think that’d be a compelling investment to make because of the high-quality, global portfolio that it would come with and the pleasing level of passive income.

The post I’d buy 99,010 shares of this ASX stock to aim for $10,000 of annual passive income appeared first on The Motley Fool Australia.

More reading

• How much do I need to retire on $75,000 a year at 45?
• 33 ASX shares going ex-dividend next week
• How much is needed in superannuation to target a $70,000 annual passive income?
• How much is needed in superannuation to target a $60,000 annual passive income?
• How much is needed in superannuation to target a $2,500 monthly passive income?

Motley Fool contributor Tristan Harrison has positions in Wcm Global Growth. 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.

If you are looking for big potential returns, then Mesoblast Ltd (ASX: MSB) shares could be worth considering.

That’s because the team at Bell Potter believes this biotechnology company’s shares could more than double in value over the next 12 months.

What is the broker saying?

Bell Potter notes that the US FDA has approved an additional potency assay for Ryoncil. It was pleased with the news, given its past experience with potency assays. It explains:

Investors familiar with the journey of Ryoncil through the FDA will be painfully aware of the delays to commercialisation, attributable at least in part, to perceived shortcomings in the then potency assays. Potency measurement is complex in a biological asset, particularly where the starting material may differ from batch to batch and with a multifactorial mechanism of action. 

MSB had not previously disclosed the development of this assay, however, it collaborated with the FDA on the project. The assay will be part of a quality control matrix for the release of each batch of Ryoncil in conjunction with the existing potency assays for IL-2Ra inhibition and CAP (Cell Adhesion and Proliferation). At its core, Ryoncil is a highly potent anti-inflammatory designed to suppress multiple mechanisms of the immune system response to a bone marrow graft by the host, including the proliferation of host T-cells which form part of the cytokine storm that occurs during severe GvHD.

The broker feels this could be a major de-risking event. It adds:

In practical terms, the assay completes the QA circle and represents a significant derisking event. The company is entirely dependent on a single manufacturing site at Lonza, Singapore for the production of Ryoncil. The new assay pavs the way for MSB to commission a second manufacturing site, most likely in the US. We expect this may commence with a second contract manufacturer. The assay allows the company to further tighten the manufacturing specifications on commercial batches.

The assay will be equally applicable to the manufacture of rexlemestrocel-L. MSB has extensive IP around both Ryoncil and Rexlemestrocel-L (aka Revascor). Ryoncil carries Orphan Drug Designation and long life patents. The development of the new TIBA assay further extends the moat around future revenues.

Should you buy Mesoblast shares?

According to the note, in response to the news, the broker has retained its buy rating and $4.45 price target on Mesoblast shares.

Based on its current share price of $2.16, this implies potential upside of 106% for investors over the next 12 months.

The post Could Mesoblast shares rise over 100% in 12 months? appeared first on The Motley Fool Australia.

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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.