Tag: Stock pick

Superannuation fund AustralianSuper has boosted its stake in takeover target BlueScope Steel Ltd (ASX: BSL), likely betting that a sweetened takeover offer will be tabled.

In a notice lodged with the ASX late on Thursday afternoon, the superannuation fund indicated that it had increased its stake in BlueScope, which on Wednesday rejected a $30 per share takeover offer from SGH Ltd (ASX: SGH) and US company Steel Dynamics (NASDAQ: STLD).

AustralianSuper’s stake in BlueScope increased from 12.5% to 13.52% following share purchases on Monday and Tuesday at prices ranging from $24.38 to $29.55.

Strong bargaining position

Given that AustralianSuper’s stake is higher than 10%, it puts the super fund in a strong bargaining position to potentially block any takeover bid or hold out for a higher price.

Generally, under a takeover scenario, companies can move to compulsorily acquire the shares they do not own if they manage to gain control of more than 90% of a company’s shares.

The BlueScope board on Wednesday formally rejected the $30 per share bid from SGH and Steel Dynamics, after news of the bid broke on Monday.

The BlueScope board said it had unanimously rejected the bid, saying it undervalued the company.

BlueScope Chair Jane McAloon put it this way:

Let me be clear – this proposal was an attempt to take BlueScope from its shareholders on the cheap. It drastically undervalued our world-class assets, our growth momentum, and our future – and the board will not let that happen. This is the fourth time we’ve said no, and the answer remained the same – BlueScope is worth considerably more than what was on the table.

Ms McAloon said the company was “well recognised” for building shareholder value and had delivered over $3.8 billion in shareholder returns since 2017, achieving an average 18% return on invested capital.

Industry at a low point

Ms McAloon also said that steel spread prices in Asia were currently at a low point, and if they returned to historical average levels, “this would be expected to generate an additional $400 to $900 million of EBIT per annum relative to FY2025”.

She added that BlueScope was targeting $500 million in extra earnings from growth programs, which were “well under way”, and the company was also targeting $200 million in cost and productivity improvements this financial year.

The proposal from SGH and Steel Dynamics would have involved SGH acquiring all of the shares in BlueScope and then on-selling BlueScope’s North American businesses to the American company.

BlueScope shares closed at $29.40 on Thursday, valuing the company at $12.78 billion.

The post AustralianSuper boosts its stake in takeover target BlueScope Steel appeared first on The Motley Fool Australia.

More reading

• Why Ansell, Elsight, Ramelius, and SGH shares are falling today
• 10 best ASX 200 large-cap shares of 2025
• BlueScope shares fall after rejecting ‘significantly undervalued’ takeover offer
• 5 things to watch on the ASX 200 on Thursday
• What’s Bell Potter’s view on SGH shares after the BlueScope Steel acquisition proposal?

Motley Fool contributor Cameron England 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 Codan Ltd (ASX: CDA) share price is in focus today after the company reported group revenue of about $394 million for the first half of FY26, up 29% on the same time last year. Underlying net profit after tax is expected to exceed $70 million, roughly 52% higher than the previous period.

What did Codan report?

• First-half FY26 group revenue: ~$394 million, up 29% year-on-year
• Underlying net profit after tax: not less than $70 million, up ~52%
• Metal detection revenue: ~$168 million, up ~46%, driven by strong gold detector sales in Africa
• Communications segment revenue: ~$222 million, up ~19%, meeting the higher end of Codan’s growth target
• Approximately $4 million of revenue from legacy Minetec business included

What else do investors need to know?

Codan’s results were supported by ongoing strength in both its metal detection and communications businesses. Recreational metal detector sales outside Africa also delivered double-digit growth for the half.

The company’s communications business continued to perform well, matching the upper end of its stated 15%–20% growth target for the first half. All figures in this update are preliminary, unaudited, and will be reviewed by Codan’s auditors before final results are released.

What’s next for Codan?

Codan is set to release its full audited first-half FY26 results on 19 February 2026, which will give investors greater detail about segment performance and outlook. The business remains focused on developing durable technology solutions for customers in demanding environments worldwide.

Investors will be watching for further updates on growth in both the metal detection and communications segments, as well as any news on dividends or refreshed strategic targets.

Codan share price snapshot

Over the past 12 months, Codan shares have risen 99%, strongly outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

View Original Announcement

The post Codan posts strong first-half FY26 revenue and profit growth appeared first on The Motley Fool Australia.

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• Rio Tinto confirms preliminary merger talks with Glencore
• This is the ASX 200 share offering a 6.25% dividend yield
• What is the Russell 2000 Index and why has it been booming over the past 6 months?
• 5 things to watch on the ASX 200 on Friday

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.

After several years in the wilderness, Westpac Banking Corp (ASX: WBC) has reminded investors what a well-run major bank can deliver. The share price surged through 2024 and 2025, dividends lifted, and total shareholder returns ranked second among the major banks last year.

As we head into 2026, though, I think the next chapter is far less straightforward. Westpac is entering the year with momentum, but also with a valuation that assumes a lot goes right. That is why I see 2026 as a potentially make-or-break year for the Westpac share price.

A strong recovery story

There is no question Westpac’s turnaround since the pandemic has been real.

At its 2025 annual general meeting (AGM), management highlighted its net profit of $7 billion and a return on tangible equity of 11% excluding notable items. Deposit growth outpaced loan growth, margins held steady despite competition, and the bank finished the year with a CET1 ratio of 12.5%, which is market leading in Australia.

Just as importantly, the long-running remediation and risk issues are now largely behind it. The completion of the CORE program and the removal of APRA’s remaining $500 million capital overlay marked a symbolic and practical reset. I think Westpac is now operating from a position of strength rather than defence.

That shift could have been a key driver of the Westpac share price re-rating.

Why valuation now matters

The problem for 2026 is that Westpac is no longer priced like a recovery story.

After delivering a total shareholder return of over 20% in 2025, expectations are higher. In my view, at a 19x PE ratio, its shares are now valued more like a steady compounder than a bank still in the early stages of a turnaround. That leaves less margin for error.

Yet, its earnings growth looks set to be modest. Loan growth across the system is slowing, mortgage competition remains intense, and business lending is not immune to a softer economic backdrop. At the same time, costs are elevated. Expenses rose 9% in FY25, driven by investment in technology, bankers, and the UNITE transformation program.

Management has been clear that cost reductions are coming, but that is a medium-term ambition rather than a near-term certainty.

Execution is everything in 2026

At its AGM from last month, one word came up repeatedly: execution.

The new leadership team is focused on simplifying the bank, improving service, and driving productivity through UNITE and increased use of AI. These initiatives are sensible and necessary, but they also carry execution risk. Investors will want to see tangible progress, not just ambition.

Targets such as achieving a cost-to-income ratio below the peer average by FY29 are encouraging, but 2026 will be about proving that momentum is real and sustainable.

If costs do not start to moderate, or if revenue growth disappoints, the Westpac share price could quickly come under pressure.

What could still support the Westpac share price

That said, there are still reasons to be constructive.

Westpac’s balance sheet is very strong, credit quality has been resilient, and capital flexibility supports attractive dividends. The final dividend of 77 cents in FY25 took full-year dividends to $1.53 per share, fully franked, which remains attractive for income-focused investors.

If interest rates remain supportive and the economy avoids a hard landing, Westpac could continue to deliver steady returns, even without strong growth.

My view on 2026

For me, 2026 really is a defining year for the Westpac share price.

If the bank can translate its strategic progress into lower costs and stable earnings growth, the share price can hold up and potentially grind higher. If not, the market may start to question whether much of the good news is already priced in.

The post Will 2026 be make-or-break for the Westpac share price? appeared first on The Motley Fool Australia.

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

Qantas Airways Ltd (ASX: QAN) shares are in the green in these early days of 2026.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline closed up 0.29% on Thursday, trading for $10.51 each. That puts the share price up 1.25% since the 31 December close.

Taking a step back, Qantas shares have gained 13.25% since this time last year, outpacing the 4.45% returns delivered by the benchmark index.

And that doesn’t include the two fully franked dividends Qantas paid eligible stockholders over this time. At Thursday’s closing price, the ASX 200 airline trades on a fully franked 5% trailing dividend yield.

Now here’s why I think this forecast from Commonwealth Bank of Australia (ASX: CBA) could offer some welcome tailwinds for the airline in 2026.

How a rising Aussie dollar could boost Qantas shares

As you may be aware, April saw the Aussie dollar fall to a five-year low against the greenback. The Aussie was then trading for 59.22 US cents amid heightened fears of United States President Donald Trump’s global tariff campaign.

On Thursday, the Aussie dollar was fetching 67.20 US cents, up 13.5% since those April lows.

Qantas shares have also soared higher since then, with shares now up 31% since 9 April.

And CBA expects further strengthening in the Aussie dollar in 2026.

“The Aussie typically does well against most currencies when the world economy is in a cyclical upswing,” CBA said.

The bank added that expected US tax cuts and US Fed interest rate cuts (while the RBA is looking at lifting rates) are also likely to help boost the Aussie dollar against the US dollar.

“If tariff fears ease and US tax cuts support growth,” CBA said, the Australian dollar could hit 73 US cents in 2026.

As for the potential impact on Qantas shares, CBA noted that this could have “a major impact on the large number of Australians with plans for overseas travel”.

CBA said that over the two-week Black Friday spending period, travel spending hit $2.2 billion, up 8.4% year on year.

“What kind of bang they get for their buck, though, is tied directly to the Aussie dollar’s value,” CBA said of international travellers.

The bank added:

The outlook for the Australian economy is positive, and despite 2025’s unwanted inflation surprises, jobs figures often beat expectations and indicated a labour market at or near full employment.

While a stronger Aussie dollar could see fewer international bookings into Australia, I believe the overall impact on travel demand should weigh in Qantas’ favour.

Billion-dollar jet fuel bills

Atop the potential increase in Australian travellers, a stronger Aussie dollar could also help boost Qantas shares via lower jet fuel costs.

Oil, as you likely know, is priced in US dollars.

And we’re not talking about a few thousand dollars here.

Qantas expects its first half FY 2026 fuel costs to come in at $2.6 billion, so even another 10% appreciation in the Australian dollar could have a material impact on the airline’s bottom line.

The post How Qantas shares could catch a welcome uplift in 2026 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 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.

While artificial intelligence continues to dominate headlines, another global megatrend is beginning to accelerate and grab headlines — defence spending.

In early 2026, defence-focused investments are back in the spotlight as geopolitical tensions persist and governments commit to unprecedented military budgets. For Australian investors, this has renewed attention on ASX ETFs offering diversified exposure to global defence contractors and military technology leaders.

Two powerful forces are driving this trend.

A world that feels less stable, not more

Despite hopes that the post-pandemic era would bring a more cooperative global environment, reality has moved in the opposite direction.

Cold and hot conflicts continue across Eastern Europe, the Middle East, and Asia-Pacific flashpoints. Meanwhile, major powers including the United States, China, and Japan are actively modernising their military capabilities. Smaller nations are following suit, often under pressure to meet alliance commitments or defend strategic interests.

This environment is pushing defence spending higher — not just as a short-term response, but as part of long-term strategic planning. Governments are investing in missile defence, cybersecurity, autonomous systems, surveillance technology, naval assets, and aerospace platforms. These are multi-decade programs, not one-off purchases.

For investors, that matters. Defence companies often benefit from long contracts, recurring revenue, and government-backed demand that is less sensitive to economic cycles.

A $1.5 trillion signal from the White House

That long-term trend was given fresh momentum this week.

US President Donald Trump announced plans to lift America’s military budget by 50% to approximately US$1.5 trillion by 2027, citing global instability and the need to maintain strategic superiority.

To put that number into perspective, it would represent the largest defence budget in history — comfortably exceeding the combined military spending of several major nations.

Markets did not ignore the signal. Global defence stocks rallied sharply following the announcement, with many companies hitting new highs in early 2026. The message was clear: defence spending is not peaking — it is accelerating.

Given the size of the US defence ecosystem, higher American spending tends to flow through supply chains globally, benefiting contractors, subcontractors, and technology providers across multiple regions.

Why these ASX ETFs are in focus

Rather than taking a punt on individual defence stocks, many investors have gravitated toward ASX ETFs that offer broad, rules-based exposure to the global defence supply chain.

Two in particular have stood out.

The VanEck Global Defence ETF (ASX: DFND) has surged more than 75% over the past 12 months, excluding dividends. DFND has a heavier weighting toward US and European defence primes and advanced technology providers, reflecting where the bulk of global defence spending is flowing. Its portfolio includes exposure across missile systems, aerospace, intelligence software, and next-generation defence platforms, with a strong tilt toward companies embedded in long-term NATO and allied procurement programs.

By contrast, the Betashares Global Defence ETF (ASX: ARMR) — up over 60% in the past year, excluding dividends — takes a slightly broader approach. While it also holds many of the world’s largest aerospace and defence contractors, ARMR’s construction places more emphasis on diversified military hardware and infrastructure suppliers, offering exposure across traditional defence manufacturing alongside newer areas such as surveillance, communications, and security technology.

Not without risks, but supported by structural demand

As with any thematic investment, defence is not risk-free. Valuations across the sector have risen, and political sentiment can shift over time. Defence companies also operate in an environment where delays, cost overruns, or policy changes can impact earnings.

However, the structural backdrop remains supportive. Governments rarely slash defence spending during uncertain times, and modern warfare increasingly relies on advanced technology rather than manpower alone. That trend favours ongoing investment, not retrenchment.

Foolish Takeaway

AI may still command the spotlight, but defence spending is shaping up as one of the most durable investment themes of the decade.

With global tensions unresolved and the world’s largest economy preparing to spend US$1.5 trillion on its military, the tailwinds behind defence-focused ETFs look set to persist well beyond 2026.

For investors seeking diversified exposure to this powerful megatrend, defence ETFs remain firmly on the radar.

The post Forget AI – these ASX ETFs are riding a global megatrend with years of tailwinds ahead appeared first on The Motley Fool Australia.

More reading

• Why these ASX ETFs could be strong buys in 2026
• Own Betashares ASX ETFs? Here’s your next dividend

Motley Fool contributor Leigh Gant 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 Aristocrat Leisure Ltd (ASX: ALL) share price is in focus after the company announced an extension to its on-market share buy-back program, building on A$701.1 million worth of shares already bought back since February 2025 and authorising up to an additional A$750 million over the coming year.

What did Aristocrat Leisure report?

• A$701.1 million in shares bought back since February 2025
• Board has approved an increase to buy back up to a further A$750 million in shares
• Total on-market share buy-back capacity now up to A$1.5 billion (aggregate)
• Buy-back period extended for 12 months, ending 5 March 2027
• Buy-back to remain opportunistic, with flexibility for Aristocrat to vary, suspend, or end the program

What else do investors need to know?

Aristocrat says the share buy-back extension is part of its ongoing capital management strategy, aiming to balance shareholder returns with investment in growth. The extension reflects the company’s strong cash flow generation and solid performance across its global business units.

The board emphasised that the buy-back is not prescriptive and will be managed depending on market conditions and capital allocation needs. Aristocrat also continues to explore investments in strategic acquisitions and organic growth initiatives alongside the program.

What did Aristocrat Leisure management say?

Chief Executive Officer of Aristocrat Trevor Croker said:

With the A$750 million on-market share buy-back program previously announced in February 2025 nearing completion, and our consistently strong cash flow generation, we are able to continue to pursue a mix of returns to shareholders via dividends and share buy-backs while also investing in strategic acquisitions and organic growth initiatives.

What’s next for Aristocrat Leisure?

Looking ahead, Aristocrat plans to continue focusing on shareholder returns through both dividends and buy-backs, while remaining active in pursuing growth, both organically and by acquisition. The company says it reserves the right to adjust its buy-back program subject to market conditions and its broader capital needs.

With a technology-driven product portfolio and global footprint across casino, digital, and interactive gaming, Aristocrat says it will remain committed to growing its core businesses and seeking out new opportunities in the entertainment and gaming sector.

Aristocrat Leisure share price snapshot

Over the past 12 months, Aristocrat Leisure shares have declined 21%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 5% over the same period.

View Original Announcement

The post Aristocrat Leisure extends buy-back program 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 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 Rio Tinto Ltd (ASX: RIO) share price is in the spotlight today after the company confirmed it is in preliminary talks with Glencore about a possible merger. The discussions could lead to an all-share combination and would be structured as a Court-sanctioned scheme if pursued.

What did Rio Tinto report?

• Confirmed early-stage discussions with Glencore for a possible business combination
• Potential transaction may involve an all-share merger with Glencore
• Current expectation is any deal would be by a Court-sanctioned scheme of arrangement
• No firm offer has been made at this stage, and terms remain undecided
• Rio Tinto has until 5 February 2026 to make a formal announcement under UK Takeover Code rules

What else do investors need to know?

Rio Tinto clarified in the announcement that there is no certainty a formal offer will occur or what terms any potential deal could include. The company also stated it reserves the right to adjust any terms in future negotiations, including the type or mix of consideration offered.

Shareholders and investors are advised that further announcements will be made if and when appropriate. Until then, it’s business as usual at Rio Tinto, with the company highlighting the exploratory nature of the current discussions.

What’s next for Rio Tinto?

Looking ahead, Rio Tinto has until 5 February 2026 to decide whether to announce a firm intention to make an offer for Glencore or step back from the talks. The company stresses that the process is still in its early stages, and any future updates will follow regulatory requirements.

With commodity markets evolving and industry mergers in focus, Rio Tinto and Glencore’s discussions reflect ongoing efforts to explore strategic growth. Investors will be waiting to see if a deal eventuates or the companies take separate paths.

Rio Tinto share price snapshot

Over the past 12 months, Rio Tinto shares have risen 31%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has increased 5% over the same period.

View Original Announcement

The post Rio Tinto confirms preliminary merger talks with Glencore 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 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.

There are many S&P/ASX 200 Index (ASX: XJO) shares that pay investors passive income. But, there are not many that have a reliable-looking dividend yield of more than 6%.

One name that I really like for reliable income is Charter Hall Long WALE REIT (ASX: CLW), which is a real estate investment trust (REIT), as the name suggests. That means it has a portfolio of property.

It’s managed by the fund manager Charter Hall Group (ASX: CHC), which is one of Australia’s leading property managers, in my view.

There are a number of positives that make this business appealing, so I’ll outline each one.

Diversified portfolio

While there are are some advantages to investing in a residential property, there are negatives too. For example, it lacks diversification, with all of one’s investment capital focused on a single asset in a single location.

However, being invested in a typical ASX REIT means owning a portfolio of properties across the country.

The Charter Hall Long WALE REIT is particularly diversified because its portfolio is spread across a number of subsectors – it’s not just a shopping centre REIT or an office REIT.

The ASX 200 share is invested in hotels and pubs, government entities (such as GeoScience Australia), telecommunication exchanges, data centres, service stations, grocery and distribution centres, food manufacturing, waste and recycling, Bunnings properties and plenty more.

By being so diversified, it lowers the risks of the REIT and also gives the ASX 200 share a wider investment universe to find the best opportunities.

Long-term rental contracts

One of the most special things about this business as an income investment is the length of rental contracts it has signed with its tenants.

By locking in rental income for longer, it means investors have greater security with the rental profits and distributions.

At the end of FY25, the business had a weighted average lease expiry (WALE) of around nine years. That’s impressive visibility of the rental income for the coming years, combined with an occupancy rate of 99.9%.

Compelling rental growth

One of the reasons this ASX 200 share is so appealing for income is that it is seeing regular rental income growth, which is contracted with tenants.

Around half of the portfolio has exposure to CPI-linked rental growth, while the rest of the portfolio is experiencing fixed annual increases.

In FY25, the business experienced a weighted average rental review (WARR) of 3.1%, which is a solid growth rate for a REIT.

Large dividend yield

When you put all of that together, the business has defensive earnings, with a useful earnings tailwind and long-term rental contracts.

Pleasingly for income-focused investors, it has decided on a 100% distribution payout ratio of operating earnings, providing investors with a very rewarding distribution yield, which is paid in quarterly instalments.

It’s expecting to deliver an annual payout of 25.5 cents per security in FY26, which translates into a distribution yield of 6.25%.

The post This is the ASX 200 share offering a 6.25% dividend yield 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.

When it comes to blue chip investing, the most attractive opportunities are often businesses with scale, strong cash generation, and the ability to adapt as industries evolve.

These are not shares that rely on perfect conditions. They are built to perform through different economic environments.

With that in mind, here are two ASX 200 blue chip shares that analysts think could be top buys for readers with $7,000 to invest:

Aristocrat Leisure Ltd (ASX: ALL)

Aristocrat Leisure could be one of the most successful global success stories on the ASX.

While many investors still associate the company with poker machines, Aristocrat has evolved into a diversified gaming and digital entertainment business. It now operates across land-based gaming, social casino games, and regulated online gaming, giving it multiple growth levers.

What makes Aristocrat particularly attractive as a long-term holding is its strong cash flow generation. This allows it to invest heavily in product development and continue to gain market share in key regions like North America.

Importantly, Aristocrat’s content-led model creates durability. Successful games can deliver returns for many years, and its scale allows it to reinvest more than smaller competitors. For long-term investors, this combination of growth, resilience, and capital discipline is hard to ignore.

Bell Potter is bullish and has a buy rating and $80.00 price target on its shares. It said:

We retain our Buy recommendation. We continue to expect ALL’s leading R&D investment will drive market share gains. Top 2 game performance observed in both the core sales and premium gaming ops markets leaves us confident that ALL will grow the install base >4.0k per year and grow global shipments. Further, with leverage standing at 0.2x, ALL has substantial M&A firepower to boost growth inorganically.

Woolworths Group Ltd (ASX: WOW)

Woolworths may not be as exciting, but it could still be a great blue chip ASX 200 share for investors.

As Australia’s leading supermarket operator, it sits at the centre of everyday spending. Regardless of economic conditions, people still need to buy food, groceries, and household essentials. This gives the business a level of demand stability that very few companies can match.

In recent periods, Woolworths has been investing heavily to sharpen its value proposition, improve customer experience, and expand its digital capabilities. Its growing ecommerce operations, loyalty ecosystem, and data-driven platforms are helping it stay relevant in a highly competitive market.

For long-term investors, Woolworths offers a blend of defensive earnings, scale advantages, and steady dividends.

Bell Potter is also a fan of Woolworths and has a buy rating and $30.70 price target on its shares. It said:

WOW has been in an earnings downgrade cycle for two years and this looks to be coming to an end. Trading at a reasonable ~12% discount to COL and ~14% discount to its historical FWD EV/EBITDA, there is now a reasonable valuation arbitrage, just as the underperformance in Australian Food looks to be bottoming and out-of-home indicators improving (the latter a positive for B2B).

The post 2 strong ASX 200 blue chip shares to buy with $7,000 appeared first on The Motley Fool Australia.

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• How I’d build a $1,000-a-month passive income from ASX shares
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Motley Fool contributor James Mickleboro has positions in Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trying to beat the S&P/ASX 200 Index (ASX: XJO) over any single year is never straightforward. Markets rarely move in straight lines, and even the best ideas can take longer than expected to play out.

That said, when I think about relative outperformance, I ask where earnings growth is most likely to come from, and whether my portfolio is tilted toward or away from those areas.

For me, exchange-traded funds (ETFs) are one of the cleanest ways to do this. They allow me to back structural trends and high-quality businesses without relying on a single stock to do all the work.

In 2026, I believe there are two ETFs that have a strong chance of outperforming the ASX 200 Index.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF is my preferred way to access global growth through a single holding.

It tracks the NASDAQ-100 Index (NASDAQ: NDX), which includes 100 of the largest non-financial companies listed on the NASDAQ exchange. This gives exposure to businesses that sit at the centre of global innovation, including leaders in software, semiconductors, artificial intelligence, cloud computing, and digital platforms.

What I like most about this ETF is how different it looks from the Australian share market. The ASX 200 is dominated by banks, miners, and mature industrial companies. Those businesses can be dependable, but they are not typically where the fastest earnings growth comes from.

By contrast, the companies inside the BetaShares NASDAQ 100 ETF are still reinvesting aggressively and expanding into enormous addressable markets. Microsoft, Apple, Nvidia, Amazon, and Alphabet are not just large companies. They are critical infrastructure for the modern economy.

If earnings growth remains solid and interest rate pressure continues to ease in the United States, I see a credible path for this ETF to outperform the ASX 200.

VanEck Morningstar Wide Moat AUD ETF (ASX: MOAT)

The VanEck Morningstar Wide Moat ETF appeals to a different part of my investing mindset.

Rather than chasing growth outright, this ETF focuses on companies with competitive advantages, what Warren Buffett refers to as wide economic moats. These advantages might come from brand strength, network effects, switching costs, cost leadership, or intellectual property.

What gives me confidence in this ETF is not just the quality of the businesses it owns, but the discipline behind how they are selected. The portfolio is built by combining moat ratings with valuation assessments, which helps avoid overpaying for even the best companies.

I like this approach in an environment where market leadership can rotate quickly. When enthusiasm fades for more speculative areas of the market, capital often flows back toward businesses with resilient earnings and strong balance sheets. This ETF is well-positioned for that kind of shift.

Compared to the ASX 200, this ETF offers far greater exposure to global quality and far less reliance on Australian banks and resource stocks. That diversification alone makes it attractive if my goal is to outperform the local market.

The post 2 ETFs that are good bets to beat the ASX 200 in 2026 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 Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Microsoft, Nvidia, and VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.