Tag: Stock pick

Australian investors have plenty of ASX ETFs offering exposure to the US share market. ETFs can spread risk across dozens or hundreds of companies, avoid the challenge of picking individual stocks, and often come with relatively low fees.

Two popular choices are BetaShares Nasdaq 100 ETF (ASX: NDQ) and iShares S&P 500 ETF (ASX: IVV). Both provide exposure to US equities, but they serve different purposes.

NDQ: The growth-focused option

NDQ has around $9 billion in funds under management and tracks the NASDAQ-100 Index (NASDAQ: NDX), giving investors exposure to many of America’s biggest technology and growth companies.

The appeal of this ASX ETF is straightforward: if US mega-cap technology and artificial intelligence stocks continue outperforming, NDQ could benefit disproportionately.

Its largest holdings include Nvidia, Apple, and Microsoft, giving investors significant exposure to some of the market’s biggest growth engines.

But that concentration is also a risk. NDQ is less diversified than a broad-market ETF and can be more vulnerable if technology valuations fall or growth stocks fall out of favour.

The trade-off has been strong historical performance. NDQ has returned around 13% over one year, 6.5% year to date, and 442% over 10 years.

The downside? Investors pay a 0.48% management fee, considerably more than IVV.

IVV: The diversified alternative

IVV takes a broader approach, tracking the S&P 500 Index (SP: .INX), an index covering roughly 500 large US companies. It has around $14.5 billion in FUM, making it one of Australia’s largest ASX ETFs.

There is significant overlap between IVV and NDQ, particularly among the mega-cap technology stocks. However, IVV also provides exposure to a much broader range of sectors and businesses.

That diversification is arguably IVV’s biggest attraction. Investors still participate in the growth of companies such as Nvidia, Apple, and Microsoft, but aren’t making quite as concentrated a bet on technology.

IVV has delivered around 8% over one year, 5% year to date, and 271% over 10 years.

Its other major advantage is cost. IVV charges just 0.04% a year, versus 0.48% for NDQ.

So, which ASX ETF is better?

It ultimately depends on what investors want.

NDQ could be the better choice for investors deliberately seeking higher exposure to US technology and growth stocks, and who are comfortable with greater concentration and volatility.

IVV looks more compelling as a core US equity holding, offering broader diversification and an exceptionally low fee.

For investors who simply want long-term exposure to the US market without making a concentrated technology bet, IVV could be the better all-round ASX ETF.

The post NDQ vs IVV: One could be the better US growth ASX ETF appeared first on The Motley Fool Australia.

More reading

• How to build a winning ASX share portfolio and create wealth
• These are the most popular ASX ETFs. Which has performed best over the last year?
• IVV vs NDQ ETF: Which is the better buy?
• These are the most popular ASX ETFs – Which has performed best in 2026?
• ASX shares investors are getting younger and trading more often: CBA report

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple, Microsoft, Nvidia, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For Australians relying on superannuation to fund their retirement, investing in ASX dividend stocks can be a great way to add passive income. 

Following earnings season, many companies have updated their dividend payments, making it an ideal time for investors to consider their options. 

Dividend investing alongside superannuation

Dividend investing alongside superannuation can provide retirees with an additional source of income and greater flexibility when managing their portfolios. 

While superannuation remains a cornerstone of retirement planning, a carefully selected basket of dividend-paying ASX shares may help generate regular cash flow while also offering the potential for long-term capital growth.

With that in mind, here are three stellar dividend stocks investors may want to consider for income and diversification outside their superannuation.

Harvey Norman Holdings Ltd (ASX: HVN)

Harvey Norman is an attractive dividend stock right now thanks to its relatively high, fully franked dividend yield. 

It also has a solid history of shareholder distributions, and a reasonable payout ratio supported by earnings.

It is expected to pay a yield of over 6% in FY27, well above the ASX 200 average. 

Right now, the consumer discretionary stock is also looking undervalued, meaning that investors could also enjoy strong capital gains in the next year. 

Bell Potter recently placed $5 price target on this ASX dividend stock, indicating 15% upside from current levels. 

APA Group (ASX: APA)

Another strong option to supplement superannuation is APA Group. 

APA Group is a leading Australian energy infrastructure company that owns and operates a large portfolio of gas pipelines, electricity transmission, renewable energy and power-generation assets, making it an important part of Australia’s energy system. 

Its essential infrastructure generates relatively stable, long-term cash flows and gives the company opportunities to benefit from Australia’s growing energy needs and transition to a lower-carbon energy system.

Right now, it is offering a FY 2027 dividend yield of approximately 5.4%.

Universal Store Holdings Ltd (ASX: UNI)

Universal Store is another great option this month amongst ASX dividend stocks. 

The Universal Store company has multiple businesses under its umbrella – Universal Store, Perfect Stranger, and CTC (with the THRILLS and Worship brands). It sells youth casual fashion apparel.

Based on the previous annual dividend payout of 43 cents per share, the company has a trailing grossed-up dividend yield of over 7%, including franking credits. 

It is also another candidate for strong capital appreciation. 

Its share price closed trading last week at $7.72, however Bell Potter recently placed a $9.70 price target on the company. 

This indicates a healthy upside potential of 25%. 

The post 3 stellar ASX dividend stocks to supplement your superannuation  appeared first on The Motley Fool Australia.

More reading

• 3 ASX dividend shares perfect for passive income
• Looking for income for life? These are the ASX shares I’d consider
• 9 ASX shares downgraded by experts post-results this week
• Here’s what brokers tip next for APA, Transurban, Aurizon shares
• 3 top ASX dividend shares to buy in September

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Apa Group and Harvey Norman. 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.

The Ingenia Communities Group Ltd (ASX: INA) share price has come into focus as the company rejected a $4.75 per security takeover proposal from Warburg Pincus. Ingenia’s board believes the offer substantially undervalues the business and is not in the best interests of security holders.

What did Ingenia Communities Group report?

• Received an unsolicited, non-binding indicative proposal to acquire 100% of shares at $4.75 each
• The offer was subject to multiple conditions, including the abandonment of Ingenia’s proposed acquisition of Peet Limited
• Ingenia’s board determined the offer undervalues the company
• Ingenia remains committed to its current growth strategy and Peet acquisition

What else do investors need to know?

Ingenia’s Board, after advice from financial and legal advisers, concluded that the takeover offer was not in the best interests of security holders. The proposed deal from Warburg Pincus would have required Ingenia to halt its planned acquisition of Peet Limited.

The company continues to see strong opportunities in its land lease and holiday park business. Ingenia advises security holders that there’s no immediate need to take any action regarding the indicative proposal.

What’s next for Ingenia Communities Group?

Ingenia plans to press on with its proposed acquisition of Peet Limited and strategic growth in the seniors’ accommodation and holiday park sectors. Management remains focused on growing the business scale, efficiency, and delivering value for security holders. Ingenia has engaged UBS and Denison Partners as financial advisers and Gilbert + Tobin as legal adviser for further support.

Ingenia Communities Group share price snapshot

Over the past 12 months, Ingenia Communities shares have declined 35%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 2% over the same period.

View Original Announcement

The post Ingenia Communities Group rejects takeover offer, backs growth strategy appeared first on The Motley Fool Australia.

More reading

• Ingenia Communities proposes to acquire Peet, boosting growth
• Ingenia Communities posts strong FY26 with profit up 45% and guidance exceeded

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 S&P/ASX 200 Index (ASX: XJO) blue-chip stock James Hardie Industries plc (ASX: JHX) could be one of the leading larger opportunities right now, according to one of the leading fund managers.

Experts at Wilson Asset Management manage the listed investment company (LIC) WAM Leaders Ltd (ASX: WLE), which aims to actively invest in larger ASX-listed businesses.

In other words, the investment team is willing to make investments and sales based on whether they think valuations are attractive.

WAM Leaders named James Hardie as one of its most compelling holdings right now.

What’s so appealing about the ASX 200 blue-chip stock?

The company describes itself as an industry leader in exterior home and outdoor living solutions, with a portfolio that includes fibre cement, fibre gypsum, and composite and PVC decking and railing products.

It’s a global business, with a presence in North America, Europe, Australia and New Zealand.

However, the company recently announced plans to sell its European operations, including the sale of Fermacell to Holcim for €840 million (or US$980 million).

The ASX 200 blue-chip share explained that proceeds will be used to “accelerate deleveraging and return capital to shareholders.”

James Hardie also said it intends to close its European fibre cement business, subject to customary legal, regulatory and employee (including competent works council) consultation requirements.

WAM noted that James Hardie Industries delivered a solid first quarter FY27 result.

The investment team said that the ASX 200 blue-chip share’s core North American fibre cement business returned to volume growth supported by continued market share gains. This contributed to an upgrade of the company’s full-year guidance.

The company guided that FY27 total net sales could be $5.564 billion to $5.723 billion, adjusted operating profit (EBITDA) is expected to be between $1.536 billion and $1.625 billion and free cash flow is expected to be at least $500 million.

What do the experts like about James Hardie shares?

WAM also said that the announcement of the divestment of the European operations during August allows the company to “sharpen its focus on its core growth markets while further deleveraging its balance sheet.”

The fund manager said that James Hardie Industries remains a core holding in the WAM Leaders investment portfolio, with the ASX 200 blue-chip share continuing to deliver above market growth through strong execution of cost and commercial synergies and ongoing market share gains, despite a subdued US housing market.

James Hardie shares could be one to watch, along with other potential opportunities.

The post Experts reckon this high-flying ASX 200 blue-chip stock is a buy appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Monday
• ASX 200 bank shares led a financial sector rebound last week
• What’s driving the ASX 200 higher today?
• 5 things to watch on the ASX 200 on Friday
• This ASX 200 stock is up 30% in 2026. Here’s why I’d still buy it

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.

Once a week, I like to look at ASIC’s short position report to find out which ASX shares are being targeted by short sellers.

That’s because I believe it is worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, listed below are the 10 most shorted shares on the ASX this week according to ASIC.

The top 10 most shorted ASX shares

DroneShield Ltd (ASX: DRO) remains at the top of the table with short interest of 15.4%, which is up week on week. The counter-drone technology company continues to attract plenty of attention from short sellers, possibly due to its valuation and the ongoing ASIC investigation.

Lotus Resources Ltd (ASX: LOT) has seen its short interest jump to 15%. Short sellers may still have concerns over the uranium developer’s funding requirements and the execution needed to deliver its growth plans.

4DMedical Ltd (ASX: 4DX) has short interest of 12.3%, which is down slightly week on week. The medical imaging technology company remains heavily shorted as investors weigh its significant growth potential against a very high valuation.

Domino’s Pizza Enterprises Ltd (ASX: DMP) has seen its short interest ease to 12%. Short sellers may be unconvinced that the pizza chain operator’s restructuring and store closures will be enough to restore strong earnings growth.

Treasury Wine Estates Ltd (ASX: TWE) has short interest of 11.8%, which is down slightly week on week. Weakness in parts of the global wine market and uncertainty around the company’s recovery continue to give short sellers something to focus on.

PLS Group Ltd (ASX: PLS) has 11.1% of its shares held short, which is broadly unchanged since last week. Short sellers may be expecting lithium prices to be under pressure, which would weigh on margins.

Zip Co Ltd (ASX: ZIP) has seen its short interest rise to 11.1%. The buy now pay later company’s strong share price recovery may have encouraged some investors to bet that expectations are becoming too optimistic.

Elders Ltd (ASX: ELD) has returned to the top ten with short interest of 10.9%. Short sellers may have concerns over rural spending conditions and the outlook for earnings growth across the agribusiness.

Paladin Energy Ltd (ASX: PDN) has seen its short interest fall to 10.7%. Despite this, short sellers may still believe expectations for uranium prices and future production are running ahead of reality.

Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease again to 10.6%. Short sellers may remain cautious on the travel agent due to margin pressure, consumer spending conditions, and disruption to international travel.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• ASX 200 bank shares led a financial sector rebound last week
• 9 ASX shares downgraded by experts post-results this week
• 8 ASX shares upgraded by the professionals post-results this week
• Buy, hold, sell: Flight Centre, Qantas, and Wesfarmers shares
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, DroneShield, and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Elders, and Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

CSL Ltd (ASX: CSL) shares have staged a remarkable comeback, surging 35% in the past month and gaining 94% from their 52-week low in June.

But zoom out, and the picture looks less spectacular. CSL shares remain about 16% lower over the past 12 months.

So, after such a powerful rebound, where do experts think the biotech giant could go from here?

What do brokers think?

Not every broker believes the recovery is firmly established. Of 19 analysts tracked on TradingView, 10 rate CSL shares a hold, while nine have a buy or strong-buy rating.

More importantly, the average 12-month price target is $171.94, below the share price of $174.50 at the time of writing.

However, forecasts vary dramatically. The most bullish target sits at $206.86, implying another 19% upside, while the lowest is just $131.56, pointing to roughly 25% downside.

Macquarie is among the most bearish, with a neutral rating and target of just over $133. UBS is considerably more optimistic at $181, while Morgan Stanley has a $172 target.

Bell Potter has retained its hold rating on the ASX biotech stock but recently increased its target from $120 to $150.

Why have CSL shares soared?

The catalyst was CSL’s FY26 result. On the surface, it looked ugly, with the $80 billion biotech company reporting a US$2.6 billion net loss after tax.

But investors quickly looked beyond the headline number.

The loss included US$7.1 billion of pre-tax impairments and US$799 million of restructuring costs, much of which was non-cash. Most impairments related to CSL Vifor intangibles and under-utilised property, plant and equipment.

Investors had already received a warning in May, when CSL flagged around US$5 billion of impairments and cut its FY26 guidance.

Excluding exceptional items, underlying NPATA was US$3.1 billion, down just 2%. Revenue fell 1% to US$15.8 billion but still beat analyst expectations.

For investors, the result therefore represented something potentially more valuable than headline profit: a reset year, cleaner balance sheet and better-than-feared outlook.

CSL Behring remains the standout. Its plasma division generated US$11.4 billion of revenue, while immunoglobulin revenue held steady at US$6.2 billion. CSL Vifor grew revenue 3% to US$2.4 billion, although Seqirus remained under pressure, with revenue falling 8% to US$2 billion.

Could FY27 send the biotech stock higher?

The bull case centres on FY27. CSL expects underlying NPAT to grow approximately 5%, ahead of consensus expectations of around 2%.

Behring is forecast to deliver mid-single-digit growth, with immunoglobulins expected to grow at a mid-to-high single-digit rate.

The major challenge remains Vifor, where revenue is expected to plunge about 25% as iron generics enter the market.

For CSL shares, the recovery story is clearly gaining momentum. The question now is whether improving fundamentals can justify the renewed optimism already priced into the stock.

The post CSL shares are up 94% from their low. What are brokers forecasting next? appeared first on The Motley Fool Australia.

More reading

• Looking to bank the upcoming CSL dividend? You better hurry!
• Top 3 ASX healthcare shares to buy after a brutal year
• Top 3 ASX shares I’d buy with $5000 right now
• 40 ASX shares with ex-dividend dates next week
• ASX shares investors are getting younger and trading more often: CBA report

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

The ASX dividend stock Charter Hall Long WALE REIT (ASX: CLW) has fallen steeply – it’s down 35% since April 2022 and 22% in the past year. I think this is a great time to look at the real estate investment trust (REIT) at such a cheap price.  

This business has several positives, and I think this period of higher interest rates has created an excellent buying opportunity for brave investors.

It’s invested in a number of areas including service stations, telecommunication exchanges, data centres, government-related buildings (such as Geosciences Australia), hotels/pubs and so on.

When share prices fall, investors get the chance to buy at a better yield. That’s exactly what’s happening here. So, let’s run through why it’s an appealing buy.

Strong dividend yield

One of the most pleasing elements of this business is how it operates with a distribution payout ratio of 100% of its net rental earnings, unlocking a very strong distribution yield for investors.

However, REITs typically have sizeable amounts of debt on their balance sheets as a way to partially fund their commercial property investments. So, it’d be understandable if some names in the sector face lower rental earnings and a lower distribution in FY27.

But, thanks to the resilience of the ASX dividend stock’s operations and compelling rental contract agreements, the business has guided that it will be able to maintain its FY27 annual payout at 25.5 cents per security.

That means the business could pay a distribution yield of 7.25% in FY27.

Pleasing rental growth

One of the reasons why the business has been able to maintain its dividend payout is because it has pleasing rental growth built into its contracts with tenants.

Rental growth is built into the rental contracts, with increases either fixed annually or tied to inflation. With consistent growth, the business can deliver stable, growing payouts over time.

Not only does the business achieve regular rental growth, but its tenants are signed on for a very long time, on average. It currently has a weighted average lease expiry (WALE) of around nine years. That means it can offer investors both long-term income visibility and security.  

Very attractive valuation for the ASX dividend stock

Not only is there a good yield, diversification and decent growth on offer, but I think it’s also undervalued.

The business reported that on 30 June 2026, its net tangible assets (NTA) was $4.71 per unit, which was a year-over-year increase of 2.6%. The NTA includes the value of the properties, the loans, cash and all the other tangible assets and liabilities.

That $4.71 valuation per unit is based on the entire property portfolio being independently valued during the financial year. At the time of writing, the ASX dividend stock is valued at 25% discount, so I think it’s a great time to invest.

I think Charter Hall Long WALE REIT is one of the best value stocks around, though it’s not the only one.

The post 1 ASX dividend stock down 35% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target a $60,000 annual passive income?
• 3 strong ASX dividend shares with yields up to 7.7%
• How much is needed in superannuation to target a $2,500 monthly passive income?
• How to build an ASX portfolio you do not need to check every day
• How much is needed in superannuation to target a $5,500 monthly passive income?

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.

Four heavyweight S&P/ASX 50 Index (ASX: XFL) shares have been hammered over the past 12 months, falling between 30% and 60%.

Each ASX 50 share has faced different challenges, but with brokers still seeing substantial upside in several names, investors may be wondering whether the sell-offs have gone too far.

Xero Ltd (ASX: XRO)

The Xero share price has taken a beating, but the business itself continues to grow at a healthy pace. This ASX 50 share delivered FY26 operating revenue of NZ$2.75 billion, up 31%, while annualised monthly recurring revenue jumped 37% to NZ$3.27 billion.

Xero added 506,000 customers during the year, taking its global base to 4.92 million. Management expects another strong year, with FY27 revenue guidance of NZ$3.62 billion to NZ$3.73 billion, implying around 30% growth at the midpoint.

There also appears to be plenty of runway, with Xero previously estimating a total addressable market of around 100 million small and medium-sized businesses.

Brokers remain divided. Citi has a buy rating and $113.60 target, while Morgan Stanley sees $130 and UBS $127. Ord Minnett and Morgans have targets of $110 and $111 respectively. RBC Capital and Jefferies are more cautious, with targets of $85 and $77.

WiseTech Global Ltd (ASX: WTC)

Few ASX 50 shares have experienced a more dramatic rollercoaster than WiseTech. Its shares have traded as high as $135 and as low as $28.76, representing an almost 80% peak-to-trough decline.

At around $37.57 at the time of writing, the stock remains close to its lows after falling approximately 60% over 12 months.

Yet the underlying business continues to grow. WiseTech reported a 46% increase in EBITDA to US$558.4 million for FY26, broadly within its guidance range.

Brokers appear considerably more optimistic than the share price suggests. Macquarie has an outperform rating and $48.20 target, while Citi and UBS have buy ratings with targets of $58.75 and $56 respectively.

Pro Medicus Ltd (ASX: PME)

AI concerns helped hammer this ASX 50 share, but the underlying numbers remain impressive.

Pro Medicus delivered FY26 revenue growth of 22.9% to $261.7 million, while underlying EBIT and NPAT rose 24.4% and 24.1% respectively.

Its Visage imaging software is already used by major healthcare systems across North America, yet management estimates it has captured only around 11% of the US market.

Citi has a buy rating and $225 target, implying around 34% upside. Barrenjoey has a buy recommendation with a $210 target, while JPMorgan is more cautious with a hold rating and $211 target.

REA Group Ltd (ASX: REA)

REA Group has also been under pressure, with this ASX 50 share trading around $168, well below its 52-week high of $242.81.

FY26 revenue increased 7% to $1.79 billion, although net profit fell 19%, partly due to an impairment relating to REA India.

The bigger concern is FY27, with REA warning that new national buy listings could be flat to down by low single digits.

Still, several brokers see value. Morgan Stanley has a $230 target, which points to a 37% upside. This is followed by Ord Minnett at $225 and Morgans at $203. RBC, Jefferies and UBS have targets ranging from $177 to $197.

Macquarie is more cautious at $170, while Bell Potter has a sell rating and $147 target. This suggests a potential loss of 12% at the current share price level.

The post These ASX 50 shares have lost up to 60%. Is the sell-off overdone? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• How to build a winning ASX share portfolio and create wealth
• Top 3 ASX healthcare shares to buy after a brutal year
• 9 ASX shares downgraded by experts post-results this week
• Down another 18%: Why I’d buy WiseTech shares in the dip

Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Motley Fool contributor Marc Van Dinther has positions in WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase, Macquarie Group, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended Macquarie Group and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Passive income can be a good reason to invest in ASX dividend shares.

And fortunately for Aussie investors, there are plenty of options on the local share market.

But which ones could be buys?

Here are three ASX dividend shares that I think could be well suited to investors looking to build passive income.

APA Group (ASX: APA)

APA could be a strong option for passive income. It owns and operates a large portfolio of energy infrastructure assets across Australia, including gas pipelines, processing facilities, storage assets, and electricity transmission infrastructure.

This gives APA a fairly defensive earnings base. Its assets are used to move energy around the country, and a large portion of earnings is supported by long-term contracts and regulated revenue. That can provide a level of visibility that is useful for dividend investors.

APA also has a long history of increasing its distributions over time (around two decades of increases), which adds to the appeal for investors looking to build an income stream that can grow gradually.

In light of this, for investors who want steady income without relying heavily on consumer spending, APA could be worth a closer look.

Transurban Group (ASX: TCL)

Transurban is another ASX dividend share that could be well suited to passive income. It owns and operates toll roads in Australia and North America.

These are valuable infrastructure assets in major cities where congestion is a long-term problem.

That gives Transurban an attractive position. As urban populations grow, more people need to move around cities. Well-located toll roads can help reduce travel times, which supports demand for the company’s roads.

The company also benefits from tolling structures that can provide some protection against inflation. That does not mean traffic volumes will rise every year, but the long-term nature of the assets gives the business a strong income profile.

Its regular dividends could make it a useful option for income investors who want infrastructure exposure alongside passive income.

Woolworths Group Ltd (ASX: WOW)

Woolworths is a different type of ASX dividend share. It does not offer the same kind of dividend yield as many infrastructure or property stocks, but it brings defensive earnings and a strong market position.

The company sits at the centre of everyday household spending. Groceries remain a core expense whatever is happening in the economy, which gives Woolworths a more resilient revenue base than many retailers.

The company has faced cost pressures and intense competition, but its position in Australian food retail remains strong and its outlook is positive.

As a result, for investors looking for passive income backed by a large, mature, cash-generating business, Woolworths could be a solid long-term option.

The post 3 ASX dividend shares perfect for passive income appeared first on The Motley Fool Australia.

More reading

• Looking for income for life? These are the ASX shares I’d consider
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• Australian bond yields are back at 2011 levels. What does this mean for ASX shares?

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

Westpac Banking Corp (ASX: WBC) shares may be one of the more popular options for dividends on the ASX.

ASX bank shares can provide investors with a pleasing dividend yield because of a combination of factors.

Banks typically have a relatively low price/earnings ratio (P/E) ratio, meaning a low earnings multiple.

Secondly, banks like Westpac usually have a generous dividend payout ratio. The ASX bank share is paying out a majority of its net profit each year to shareholders.

Let’s look at what Westpac is predicted to pay, which will then inform us how many Westpac shares it would take to unlock $8,000 of passive income.

Dividend projection for the ASX bank share

The ASX bank share’s 2026 financial year is nearly over, so it could be interesting to see what’s predicted for the FY26 annual payout.

But this article will focus on the FY27 annual payout, as investors have already received half of the FY26 payout as an interim dividend.

According to the projection on Commsec, the ASX bank share is predicted to pay an annual dividend per Westpac share of $1.54 in FY26. That translates into a grossed-up dividend yield of 6.3%, including franking credits, at the time of writing.

Time will tell what the board of directors actually do with the Westpac dividend, which will be influenced by the profit that the ASX bank share reports.

Pleasingly for shareholders, the business is predicted to deliver a slightly larger payout in the 2027 financial year, with a year-over-year increase of 0.6% to $1.55 per share. At the time of writing, that translates into a dividend yield of 4.4% excluding franking credits and slightly above 6.3% including franking credits.

$8,000 of passive income from Westpac shares

It will certainly take a sizeable investment to bring that passive income goal to life.

$8,000 would certainly be a lot of passive income from just one stock, but it is possible – it would just require enough of the ASX bank share.

If we assume the ASX bank share does indeed pay an annual dividend per share of $1.55 in FY27, that would require 5,162 Westpac shares if we just focus on the dividend cash.

But, if we also include the franking credits as part of the overall grossed-up dividend income, that would mean investors would only require 3,613 Westpac shares to make $8,000 of annual passive income in FY27.

Is this the right time to invest in the ASX bank share?

It doesn’t seem to be, according to expert analysts. According to Commsec, there are currently nine sell ratings, six hold ratings and just one buy rating on the business.

Therefore, I think it would be a good idea for investors to look at other ASX opportunities.

The post How many Westpac shares do I need to buy for $8,000 of passive income? appeared first on The Motley Fool Australia.

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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.