Tag: Stock pick

The team at Morgans has been busy this week digesting updates and revising their valuation models.

Two popular ASX shares that have been under the magnifying glass are named below. Here’s what the broker is saying about them:

ARB Corporation Ltd (ASX: ARB)

This 4×4 automotive parts company’s shares have come under significant pressure this month after releasing a trading update that fell well short of expectations.

While this was disappointing, the broker remains positive on ARB. It believes that FY 2026 will be a base year for earnings and highlights that several tailwinds are supportive of growth in the coming years.

Morgans has an accumulate rating and $32.00 price target on its shares. It said:

1H26 underlying PBT of A$58m (~16% below pcp; ~14% below cons) reflected softer group sales and margin pressure (AUD/THB weakness and lower factory recoveries), with a pronounced 2Q deterioration (group sales -5.8%). All divisions weakened through the period, with implied Aftermarket sales -4.4% in 2Q26 (vs -1.7% in 2Q25); OEM -43% (vs -2%); and Export flat (vs +20.4%). The softness within the Aftermarket division is somewhat understandable, given the sharp deterioration in our tracked ARB new vehicle sales index through November (-14.8%) and December (-6.8%), dragging 2Q FY26 volumes 6.7% lower vs the pcp. However, the slowing rate of growth within Export is a point of concern (flat in 2Q) as ARB will cycle a more demanding comp in 2H FY26 (2H FY25 A$142m; vs A$125.4m 1H26).

We expect FY26 earnings will reflect a ‘base’ year for ARB to reset margins and resume a more sustainable growth trajectory (MorgansF FY25-28F EPS CAGR +7%). We are encouraged by ongoing US strength (1H26 +26%); a commanding balance sheet position (A$59.4m net cash); and various tailwinds supporting Aftermarket division recovery through CY26 (new OEM launches; network growth/upgrades; and eCommerce launch). Accumulate maintained.

BHP Group Ltd (ASX: BHP)

Morgans was pleased with BHP’s performance during the second quarter. This was particularly the case for its WAIO, Escondida, and Antamina operations.

However, the broker feels that its shares are fairly valued. As a result, it has retained its hold rating with an improved price target of $47.90. The broker commented:

A sound 2Q26 result operationally, with WAIO setting a H1 production record and BHP upgrading guidance at both Escondida and Antamina. The offsetting negative was the separate update on the Jansen Stage 1 potash project, seeing a further budget upgrade to US$8.4bn and leaving concern around possible changes to Jansen Stage 2.

We have applied upgraded metal price forecasts, driving the upgrade in our target price but not transforming the value proposition, with BHP still appearing fair value. In our sector investment strategy we view BHP as a core holding on earnings and portfolio quality grounds as well as dividend profile, we maintain our Hold rating.

The post What is Morgans saying about ARB and BHP shares? appeared first on The Motley Fool Australia.

More reading

• Why I would buy BHP, Xero, and Flight Centre shares today
• 5 things to watch on the ASX 200 on Thursday
• 4 reasons why I think BHP shares are a must-buy for 2026
• Top brokers name 3 ASX shares to buy today
• Should you buy the dip on these ASX 200 stocks?

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

The S&P/ASX 200 Index (ASX: XJO) share Xero Ltd (ASX: XRO) has declined 28% in five years, which is a significant decline considering the ASX 200 is close to all-time highs. It’s down even more (49%) since June 2025, as the chart below shows.

If you just looked at the financials of the business in the past five years, you’d see significant progress by the ASX 200 tech share.

Interest rates have risen considerably in the last five years, which is a headwind for share prices, but I’m going to highlight how the company has done more than enough over the last five years to justify its valuation being higher than it is today.

Global growth

There are few ASX shares that have been successful as Xero at growing internationally.

Australia and New Zealand are great countries to do business in, but there are a lot more potential subscribers across the rest of the world.

Xero operates in a number of other regions including the UK, Canada, Ireland, the US, South Africa, Singapore, Malaysia, Hong Kong, Indonesia and the Philippines.

In the FY26 first-half result, the business reported that its global subscriber base rose 10% year-over-year to 4.6 million. It reached 2.7 million subscribers across Australia and New Zealand, with the rest of the world reaching 1.9 million subscribers. It’s a great sign that the business has a subscriber loyalty rate of around 99% each year.

The business recently acquired Melio, a US business that enables subscribers to pay their accounts payable through a wide choice of payment methods. This can help diversify Xero’s growth avenues and provide cross-selling opportunities in the US.

I think there’s a great chance for the ASX 200 share to significantly grow from here in the coming years as the world’s small and medium business sector digitalises further with their accounting (particularly with governments preferring online and faster reporting).

Great profitability

There are not many businesses on the ASX with a stronger gross profit margin than Xero at more than 88%.

When the margin is that high, it means a large majority of new revenue can be used by Xero for growth spending (advertising and R&D) and/or increase the profit lines.

After years of heavy focus on growth, the ASX 200 share is now balancing growth and profitability.

The HY26 result was a great sign of how profit is flowing strongly. While operating revenue rose 20% to NZ$1.2 billion, net profit jumped 42% to NZ$135 million and free cash flow soared 54% to NZ$321 million.

Broker UBS suggests that the business is projected to see net profit soar from NZ$235 million in FY26 to NZ$1.1 billion in FY30.

With that profit outlook, I think the ASX 200 share is significantly undervalued by the market.

The post Down 28% in 5 years. Is it time to consider buying this ASX 200 fallen icon? appeared first on The Motley Fool Australia.

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• Contact Energy posts higher sales and renewables progress in December update
• 3 ASX shares tipped to climb over 100% in 2026
• 2 ASX growth stocks set to skyrocket in the next 12 months

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.

The Genesis Energy Ltd (ASX: GNE) share price is in focus as the New Zealand energy provider delivered a solid Q2 FY26, highlighting record hydro generation, robust fuel management and an upgraded EBITDAF outlook for the year.

What did Genesis Energy report?

• Hydro generation: 740 GWh, up 21 GWh year on year, driven by strong hydrology and plant availability
• Thermal generation: 85 GWh for the quarter, a record low; 869 GWh for the half, also a record low
• Total customer numbers: 495,706, down 4% versus a year ago, reflecting brand integration and churn
• Electricity netback: $159/MWh, normalising from Q1, with margin quality supported by disciplined pricing
• FY26 normalised EBITDAF guidance lifted to $490–$520 million (from $455–$485 million)
• Billing and CRM re-platform Release 1 live for 50,000 customers; Release 2 on track

What else do investors need to know?

Genesis continued to advance its long-term renewables pipeline, making progress on new onshore wind, solar, and battery projects destined to drive future portfolio flexibility and growth. The company also signed a framework agreement with Yinson Renewables for exclusive rights to over 1 GW of onshore wind projects and submitted a grid connection application for the 300 MW Castle Hill wind development.

On the operational side, Genesis completed the final investment decision for the 136 MWp Edgecumbe solar farm and acquired the 271 MWp Rangiriri solar project. Construction of Stage 1 of the Huntly BESS (Battery Energy Storage System) remains on schedule and on budget for commencement in Q1 FY27. The business retains focus on cost efficiency and late-life optimisation of its Huntly and Kupe operations.

What’s next for Genesis Energy?

Looking ahead, Genesis Energy has increased its FY26 normalised EBITDAF guidance range to $490 million–$520 million, citing better-than-expected margin quality and continued strength across its diversified portfolio. Operating costs are trending higher as investment continues in strategic initiatives, including digital, renewables, and the Gen35 growth strategy, but second-half FY26 expectations remain in line with prior guidance.

The company aims to further expand its renewable and flexible generation assets, enhance digital capabilities, and maintain disciplined capital allocation. Further detail on progress is expected at Genesis’ half-year results in February.

Genesis Energy share price snapshot

Over the pat 12 months, Genesis Energy shares have risen 6%, running slightly ahead of the S&P/ASX 200 Index (ASX: XJO) which has increased 4% over the same period.

View Original Announcement

The post Genesis Energy lifts FY26 guidance in strong Q2 earnings appeared first on The Motley Fool Australia.

More reading

• Northern Star Resources cuts guidance after softer quarter
• Down 28% in 5 years. Is it time to consider buying this ASX 200 fallen icon?
• Contact Energy posts higher sales and renewables progress in December update
• 3 ASX shares tipped to climb over 100% in 2026
• Here’s the average Australian superannuation balance at 40. How does yours compare?

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 Contact Energy Ltd (ASX: CEN) share price is in focus today after the company reported rising electricity and gas sales for December 2025, along with strong wholesale net revenue and increased customer connections.

What did Contact Energy report?

• Mass market electricity and gas sales reached 340GWh, up from 274GWh in December 2024.
• Customer netback climbed to $168.91/MWh (December 2024: $156.56/MWh).
• Contracted wholesale electricity sales rose to 950GWh (December 2024: 699GWh).
• Total electricity and steam net revenue grew to $103.94/MWh (December 2024: $98.75/MWh).
• Contact total customer connections rose to 668,000 (December 2024: 635,000).
• Unit generation cost increased to $38.18/MWh (December 2024: $30.68/MWh).

What else do investors need to know?

Contact’s mass market electricity and gas sales outperformed last year, with higher netbacks supporting profitability. Wholesale electricity and contracted sales also saw strong gains, while customer numbers continued to grow.

The company’s renewable projects are progressing, including the Glenbrook-Ohurua battery expected online in Q1 CY26 and the Kowhai Park Solar project targeted for Q2 CY26. Meanwhile, the TCC plant has moved into decommissioning, reflecting Contact’s shift towards renewables. December inflows into the Clutha catchment remained robust, with storage levels well above the long-term mean, supporting reliability.

What’s next for Contact Energy?

Contact is ramping up its renewable generation, with several major solar, battery, and geothermal developments underway. Management has also guided for further integration of recent acquisitions and expects continued growth in both retail and wholesale markets.

The company plans to keep building its sustainable energy portfolio, supporting New Zealand’s net zero ambitions and providing value to a growing customer base.

Contact Energy share price snapshot

Over the past 12 months, Contact Energy shares have declined 6%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 4% over the same period.

View Original Announcement

The post Contact Energy posts higher sales and renewables progress in December update appeared first on The Motley Fool Australia.

More reading

• Northern Star Resources cuts guidance after softer quarter
• Down 28% in 5 years. Is it time to consider buying this ASX 200 fallen icon?
• Genesis Energy lifts FY26 guidance in strong Q2 earnings
• 3 ASX shares tipped to climb over 100% in 2026
• Here’s the average Australian superannuation balance at 40. How does yours compare?

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.

Many investors who buy ASX shares on our stock market do so in order to receive a stream of passive income. This dividend income is one of the best and most reliable sources of passive cash flow available for most Australians, provided the dividend-producing investments that we pick are sound. That’s easier said than done, however.

Let’s get this out of the way first. There is no such thing as a ‘safe dividend’ on the ASX. No ASX share is under any kind of obligation to pay out a dividend. Even if a company tells investors to expect a certain payment, its management can change course right up until the moment the dividend is declared.

If you want a truly safe and dependable source of income, government bonds or a term deposit are your best bets for your $20,000.

Saying all of that, there are many shares on the ASX that pay reliable dividends to their investors. Barring some economic catastrophe or black swan event, there are many companies that I would have confidence in to keep paying dividends to their shareholders, rain, hail or shine.

Today, I’ll go over some of the things I look out for when searching for the safest dividends on the ASX, as well as some of the stocks I think currently offer the share market’s most reliable sources of passive income if you have $20,000 to spare.

What do the ASX’s safest dividend payers have in common?

For starters, most of the ASX’s most reliable dividend payers operate in sectors that see inelastic demand for goods or services, regardless of the economic conditions. In other words, companies that attract customers whether the economy is booming or in recession, or whether inflation is high or low.

Consumer staples stocks, infrastructure companies and telecommunications providers are good examples. We all have to eat, pay our phone bills and use electricity, water, and transport on a regular basis. The companies that provide these services at the highest standards and at the lowest prices are always going to thrive, and by extension, pay out reliable dividends.

Next, it’s prudent to look for some kind of moat, or competitive advantage, that these companies possess. This moat can help protect a company’s profits from competition and ensure that those dividends remain reliable. This moat could come in the form of a strong brand, the widest store network, or owning an asset that customers find difficult to avoid using.

Finally, use the past as a guide. Past performance is never a guarantee of future success, of course. But if a company hasn’t cut its dividend for over a decade, for example, it usually bodes well for its future income reliability

Some passive income stocks to consider

I think Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS) and Transurban Group (ASX: TCL) are three ASX dividend stocks that fit our criteria. Coles is one of the cheapest places we can obtain food and household essentials. Its vast network of stores ensures that a Coles supermarket is within easy reach of the vast majority of the Australian population. This ASX income stock has paid out a rising annual dividend each year since its 2018 ASX debut.

Telstra possess what is almost universally regarded as Australia’s best mobile network, offering coverage to rural and regional areas that competitors struggle to match. This company’s well-known brand and reputation have supported decades of dividends from Telstra.

Meanwhile, Transurban owns some of the most valuable infrastructure in the country. Motorists find it difficult to avoid using Transurban’s tolled arterial roads that span Sydney, Melbourne and Brisbane. Lucrative contracts allow the company to raise its tolls by at least the rate of inflation several times a year in many cases, which helps protect its shareholders from a dividend cut.

Of course, these aren’t the only reliable dividend payers on the ASX. But as long as you stick to high-quality companies that have reliable earnings streams and reputable histories of delivering income to shareholders, you can build a dependable stream of passive income using ASX dividend stocks.

The post Passive income: How to earn safe dividends with just $20,000 appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra 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.

The S&P/ASX 200 Index (ASX: XJO) closed 0.37% lower on Wednesday afternoon. For the year-to-date the index is 0.63% higher and it’s 4.53% above where it was this time last year.

The index hasn’t posted mind-blowing gains so far this year, and it’s currently sitting 3.4% below its all-time high in mid-October. But there are still some shares gaining good ground and with a significant potential upside in 2026.

Here are four of them, and they’re all tipped to rocket over 100% higher in 2026.

Paragon Care Ltd (ASX: PGC)

Small-cap stock Paragon, which supplies medical equipment to the health and aged care markets, has a market cap of $355.89 million. 

At the close of the ASX on Wednesday, its share price was flat at 22 cents per share. The stock is also flat on the year-to-date but is currently 55.10% below where it was trading this time last year.

The figures don’t look too appealing right now but it’s important to note that Paragon reported a strong FY25 result which showed the business is growing its core operations. It is also actively expanding with some strategic acquisitions. Most recently, the company acquired Haju Medical in Indonesia, in December.

Analysts are incredibly bullish on the stock. TradingView data shows that all four analysts have a strong buy consensus rating, with a maximum 12-month target price of 59 cents per share. That implies a huge potential 168.18% upside at the time of writing.

Xero Ltd (ASX: XRO)

On the other end of the scale there is large-cap cloud-based accounting software, Xero. The business has suffered from some investor overselling following lower-than-expected financial results last year and an unexpected acquisition news. 

But I think the reaction was way overdone. I believe the business shows incredible potential for growth this year.

As a company, Xero has previously demonstrated that it can remain resilient and grow through various stages of economic cycles. And it is also actively expanding its product line and business presence through acquisitions. 

Analysts are bullish too. TradingView data shows 11 out of 14 analysts have a buy or strong buy rating on the ASX shares. The maximum target price is a huge $228.45 a piece, which implies the shares could jump 130.99% over the next 12 months, at the time of writing. 

Telix Pharmaceuticals Ltd (ASX: TLX)

It was a tough day for the Telix share price on Wednesday. At the close of the ASX, Telix shares had fallen 7.66% to $10.61. That means that for the year-to-date the shares are now 6.6% lower. They’re now 59.95% below where they were this time last year.

The share price dip follows the company’s Q4 FY25 results where it said it had achieved its US$804 million FY25 guidance. But it did come in on the lower end of guidance. Investors clearly weren’t too pleased. It’s just one of many headwinds that Telix has faced over the past few months, including regulatory filing issues with the US Food and Drug Administration.

But the company still has exceptional growth potential amid a rapidly-growing market, and at the current share price, I think it’s a steal. 

Analysts seem to agree too. TradingView data shows all 16 analysts have a buy or strong buy rating on the stock. And the best bit is the maximum 12-month target price is $33.82. That’s 218.73% above the current trading price. Even the average target price is $26, which implies a 145.08% increase over the next 12 months, at the time of writing.

The post 3 ASX shares tipped to climb over 100% in 2026 appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth stocks set to skyrocket in the next 12 months
• Why I would buy BHP, Xero, and Flight Centre shares today
• Here’s the average Australian superannuation balance at 40. How does yours compare?
• Here are the top 10 ASX 200 shares today
• Top broker tips 57% upside for beaten-down Telix shares

Motley Fool contributor Samantha Menzies 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 Telix Pharmaceuticals and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Market sentiment can change far faster than fundamentals.

Over the past year, a broad selloff across technology stocks has pushed several high-quality ASX growth stocks to 52-week lows, despite little evidence that their long-term opportunities have deteriorated.

In some cases, share prices are down around 50% from their highs, creating what look like coiled springs just waiting for sentiment to turn.

Two ASX growth stocks that stand out in that respect are named below:

WiseTech Global Ltd (ASX: WTC)

WiseTech Global looks like a classic example of a market overreaction.

The company provides mission-critical software that sits at the heart of global freight forwarding and logistics operations. Its platform is deeply embedded in customer workflows, handling complex regulatory, operational, and data requirements across borders.

That complexity is a key part of the investment case. Unlike simpler software tools, WiseTech’s systems are not easily replaced or replicated. This is why concerns around generative AI lowering barriers to entry have had little impact on perceptions of WiseTech’s competitive position. The software is not about simple automation, but about orchestrating highly complex global supply chains.

After hitting a 52-week low and falling sharply from its highs, WiseTech shares appear to be pricing in a slowdown that does not fully reflect the business’s long-term growth runway. If sentiment toward technology improves, WiseTech’s earnings leverage and recurring revenue profile could see this ASX growth stock rebound strongly.

Morgans has a buy rating and $112.50 price target on its shares. This suggests that its shares could rise 80% from current levels.

Xero Ltd (ASX: XRO)

Xero has also been caught in the tech sector downdraft.

The company’s cloud accounting platform is core infrastructure for millions of small businesses and accounting firms globally. Once adopted, it becomes deeply embedded in daily operations, supporting strong retention and recurring subscription revenue.

However, Xero is one of several software stocks that have been hit hard by concerns about generative AI potentially lowering barriers to entry in the future. The market has questioned whether new tools could commoditise parts of the accounting software landscape.

What this overlooks is Xero’s scale, ecosystem, and integration depth. Accounting software is not just about data entry. It is about compliance, reporting, workflows, and trust. These are areas where incumbents with established platforms and partner networks still hold significant advantages.

With Xero shares now trading near 52-week lows and well below previous highs, even modest improvements in tech sentiment or clarity around AI’s role could act as a catalyst for a sharp re-rating.

Macquarie has an outperform rating and $230.30 price target on this ASX growth stock. This implies potential upside of 130% from current levels.

The post 2 ASX growth stocks set to skyrocket in the next 12 months appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares tipped to climb over 100% in 2026
• A once-in-a-decade chance to buy WiseTech Global shares?
• Why I would buy BHP, Xero, and Flight Centre shares today
• Why 29Metals, Navigator Global, Praemium, and Xero shares are sinking today
• Where to invest $5,000 in ASX 200 shares to try and beat the market

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

National Australia Bank Ltd (ASX: NAB) remains a solid, well-established ASX bank. It is profitable, well capitalised, and continues to pay dividends that appeal to income investors.

However, heading into late January, I view NAB as fairly valued. That means future returns are likely to be driven more by dividends and modest earnings growth rather than any meaningful re-rating.

With that in mind, here are three ASX exchange-traded funds (ETFs) that I think could outperform NAB on a total return basis in 2026.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF offers exposure to the world’s largest and most influential stocks.

The ETF tracks the S&P 500, which is where you will find the 500 largest stocks on Wall Street in New York.

While the IVV ETF does not offer the same income profile as NAB, it provides a very different growth engine. I think if US corporate earnings continue to expand, this fund has the potential to deliver stronger capital growth than a mature Australian bank in 2026.

For investors looking beyond domestic financials, the iShares S&P 500 ETF is a simple way to access some of the best stocks in the world.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

The VanEck Video Gaming and Esports ETF is another ETF I think has potential to outperform NAB shares in 2026.

It provides exposure to the global video gaming and esports industry. 

This is a great area for investors to be focused on. Gaming has grown into a major form of digital entertainment, spanning console, mobile, and online platforms. The industry benefits from recurring revenue models, global audiences, and continued technological improvement.

Unlike NAB, which is closely tied to domestic credit growth, the ESPO ETF’s underlying holdings are exposed to an industry that is predicted to increase materially over the remainder of the 2020s.

This ETF carries much higher risk than a bank stock, but it also offers exposure to a long-term structural trend. 

BetaShares Global Cybersecurity ETF (ASX: HACK)

The BetaShares Global Cybersecurity ETF provides exposure to a structural growth theme that is largely independent of economic cycles.

Governments, consumers, businesses, and institutions continue to invest in protecting data and infrastructure, regardless of broader conditions.

The ETF holds a diversified portfolio of global cybersecurity companies involved in areas such as cloud security, identity protection, and threat detection. As digital systems expand and become more interconnected, the relevance of these services continues to grow. 

Compared to a mature bank like NAB, the HACK ETF offers a higher-risk but potentially higher-reward profile. For investors comfortable with that, this trade-off could be worthwhile in 2026.

Why ETFs can have an edge over NAB shares

When a bank is fairly valued, returns tend to be steady but unspectacular. Dividends do much of the work, and capital growth is often limited.

ETFs that provide exposure to global markets or structural growth themes can offer a different return profile. While they may be more volatile in the short term, they also have the potential to outperform if growth trends play out.

Each carries different risks, but I think all three could plausibly outperform a fairly valued bank stock over the year ahead.

The post 3 ETFs I think could outperform NAB shares in 2026 appeared first on The Motley Fool Australia.

More reading

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• ASX ETFs with big gains and low fees
• Here’s the dividend forecast out to 2028 for NAB shares
• Why Aussies are pouring into ASX ETFs at a record pace
• 5 strong ASX ETFs to buy in your 30s

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 BetaShares Global Cybersecurity ETF and iShares S&P 500 ETF. The Motley Fool Australia has recommended 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.

Out of the major ASX blue-chip shares, Telstra Group Ltd (ASX: TLS) shares could be one of the best pick for passive income.

Telstra owns Australia’s leading telecommunications network, and benefits from ongoing user growth and subscription price increases.

One of the most appealing things about Telstra as an ASX dividend share is its dividend payout ratio is close to 100% of its earnings. That unlocks a good dividend yield.

It’s advantageous to have a diversified portfolio of businesses for a dividend-focused investor. But, if someone were aiming for $1,000 of annual passive income, it’d be good to know how many Telstra shares you’d need.

$1,000 passive income goal

Investing in ASX companies usually comes with the benefit of franking credits, so I’m going to include that in the calculation of how many Telstra shares I’d need.

If someone invested in the ASX telco share today, it’d be too late to receive the FY25 dividend payout. The next dividends someone would be eligible to receive are the FY26 payments.

I think it’s highly likely that the business will be able to grow its dividend in the 2026 financial year.

The forecast on Commsec suggests the business could pay an annual dividend per share of 20 cents, representing a year-over-year increase of 5.25%, or 1 cent per share, if that’s what happens.

Including the franking credits, this would mean investors would need 3,500 Telstra shares to generate $1,000 of annual passive income.

At the time of writing, that would require an investment of $16,590.

Is the dividend expected to continue increasing?

The further into the future we look, the more challenging it is to forecast what’ll happen next. Just look at how much unpredictability US President Trump has added to the picture over the last 12 months.

Telstra’s profit is a bit more consistent than the share market, thanks to its defensive utilities offering, so its future is easier to forecast.

The projection on Commsec suggests the dividend could increase by another 1 cent per share – a 5% year-over-year rise – in FY27 to 21 cents per share.

Therefore, at the current Telstra share price, it offers a potential grossed-up dividend yield of 6% (including franking credits) in FY26 and 6.3% in FY27.

A defensive business offering a dividend yield of more than 5% and growing at 5% per year seems like a very promising investment idea to me for passive income.

The post How many Telstra shares do I need to buy for $1,000 of annual passive income? appeared first on The Motley Fool Australia.

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• Forget Telstra shares, I’d buy this ASX telco stock instead
• How to build an ASX share portfolio for income and growth
• Would Warren Buffett buy Telstra shares?
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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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

WiseTech Global Ltd (ASX: WTC) shares have been under intense pressure over the past year. On Wednesday, the stock fell to a 52-week low of $61.48 before retracing slightly to finish at $62.02.

That is a long way from its 52-week high of $130.50, and it leaves investors facing a familiar but uncomfortable question. Has the market finally gone too far to the downside, or is there more pain still to come?

In my view, this pullback could represent a once-in-a-decade opportunity for long-term investors willing to look beyond near-term uncertainty.

A high-quality business trading at a much lower price

WiseTech remains a dominant global player in logistics software, with its CargoWise platform deeply embedded in the operations of freight forwarders and supply chain operators worldwide. The business benefits from very high levels of annual recurring revenue and extremely low customer churn, which underpins predictable cash flows even during periods of disruption.

While governance concerns and execution issues have weighed heavily on sentiment, the underlying business has not disappeared. Instead, the market has applied a significant discount while waiting for confidence to return.

Earnings growth still matters

Consensus forecasts point to earnings per share of 76.5 cents in FY26, rising to 108.1 cents in FY27. That implies strong profitability over the next two years if management delivers on its plans.

At the current share price, WiseTech is trading on 81 times estimated FY26 earnings and 57 times estimated FY27 earnings. This is well below the valuation levels investors have historically been willing to pay for that growth profile.

Valuation looks reasonable

WiseTech has never been a cheap stock in traditional terms. Over the past nine years, its average price-to-earnings ratios have ranged from 52.79 to as high as 160.87. Even in more recent years, multiples have commonly sat between 80 and 100 times earnings.

Against that backdrop, today’s valuation looks compressed to me. While a lower multiple may be justified given recent challenges, the current pricing suggests the market is assuming a permanently impaired business rather than a temporarily disrupted one.

If WiseTech simply returns to delivering consistent earnings growth, it would not need to regain its historical peak multiples for shareholders to do well from here.

Why this could be a rare opportunity

This is not a risk-free situation. Execution still matters, and trust will take time to rebuild. However, the combination of a high-quality global business, strong long-term growth drivers, and a share price that has already fallen a long way creates an unusually asymmetric setup.

For long-term investors who can tolerate volatility, this looks like one of those rare periods where a premium business is available at a price that assumes very little goes right.

That does not guarantee success, but it does suggest that the risk-reward balance may be far more attractive than it has been at almost any point in WiseTech’s listed history.

The post A once-in-a-decade chance to buy WiseTech Global shares? appeared first on The Motley Fool Australia.

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