Tag: Stock pick

The RBC Capital Markets team has reviewed the Australian oil and gas sector and reiterated its positive outlook for the majors, while being less bullish on mid-tier company Beach Energy Ltd (ASX: BPT).

RBC has published a preview of fourth-quarter operating results for the sector and says shares in Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) look like good buys at current levels.

Over at Santos, the RBC team says they expect a “relatively strong” fourth quarter coming off a weaker result in the third quarter.

As they said in their note to clients:

We forecast fourth quarter sales revenue growth of 6% quarter on quarter supported by higher WA production volumes (third quarter downtime), solid PNG LNG and GLNG production, and a return to normalised Cooper Basin production more than offsetting weaker commodity pricing.

They added that Santos’ free cash flow generation has the potential to increase materially in 2026, assuming its Barossa and Pikka projects are delivered broadly as planned.

The RBC team stated that Santos aims to distribute at least 60% of its free cash flow to shareholders after 2026, which should support dividend payments.

Santos is currently sitting on a trailing dividend yield of 5.96%, franked to 10%.

RBC has a price target of $6.75 on Santos shares, compared with $6.14 currently.

Pick of the bunch

But for even bigger gains, the RBC team is recommending investors take a look at Woodside shares, with an outperform rating on the shares and a price target of $31.50 compared with $23.31 currently.

In their research note, the RBC team said they like the company’s long-term outlook, but were expecting a decline in sales revenue over the most recent quarter of 13% due to lower sales and production volumes.

Woodside has a trailing dividend yield of 7.15%, fully-franked, and if the RBC price target were achieved, that would represent a return of 35.1%.

Among the smaller oil and gas companies, Amplitude Energy Ltd (ASX: AEL) is the preferred RBC pick.

As they said:

We see improved Orbost operating performance, solid domestic gas price and higher priced spot gas sales supporting sales revenue growth of 4% quarter on quarter. Orbost has achieved record quarterly production.

RBC said new drilling in the Otway Basin starting this year also had the potential to add value.

RBC has a price target of $3.25 on Amplitude shares, compared to its current price of $2.90. The company does not currently pay dividends.

Risks to the downside

Meanwhile, the RBC team expect Beach Energy shares to fall to $1.05 compared with $1.14 currently.

They expect Beach’s sales revenue to decline by 21% quarter over quarter and noted that production at Beach’s Otway gas plant was 31% lower quarter over quarter.

Beach has a trailing dividend yield of 7.86%, fully franked.

The post Three oil stocks to buy and one to sell appeared first on The Motley Fool Australia.

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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.

I’m always on the lookout for wonderful S&P/ASX 200 Index (ASX: XJO) blue-chip shares that could deliver market-beating performances.

The best businesses in an industry may have the potential to continue delivering great returns because of the economic moats and impressive economics.

Both of the businesses below have fallen by more than 10% in recent times. With that decline, this could be a smart time to look at these ASX 200 blue-chip shares.

Goodman Group (ASX: GMG)

Goodman Group is a large, global industrial property business that owns, develops and manages real estate. It’s best known for its logistics properties and data centres in major global cities that are important for the digital economy.

It has a presence in Australia, New Zealand, Asia, Europe, the UK and the Americas. Goodman is one of the largest listed specialist investment managers of industrial property globally.

Goodman is benefiting from growing demand in areas like e-commerce and data centres, giving the business a pleasing outlook for its work in progress (WIP), the assets under management (AUM) and rental earnings.

For example, at 30 September 2025, the ASX 200 blue-chip share had $12.4 billion of WIP with data centres representing 68% of WIP. The projected WIP for June 2026 is more than $17.5 billion.

The rental side of the business is also performing strongly – in its latest quarterly update, it reported 4.2% like-for-like annual net property income (NPI) growth on properties in its partnerships. It has an occupancy rate of 96%.

Goodman is forecasting operating earnings per security (EPS) growth of 9% in FY26. It looks good value after falling 17% in the past year.

Breville Group Ltd (ASX: BRG)

Breville is one of the world’s largest coffee machine businesses, with a number of brands.

The company has suffered a loss of some investor confidence during the past year following the US – a key market for Breville – applying tariffs to products made in China. The Asian powerhouse was responsible for manufacturing a significant portion of the Breville-made products for the US market.

So, the ASX 200 blue-chip share is hard at work changing where products bound for the US are made, particularly utilising production in Mexico.

Over time, Breville has significantly grown its revenue and net profit and this has helped improve its underlying value.

I’m confident the company can continue growing thanks to increasing levels of coffee consumption at home globally and that Breville is expanding in markets that have much lower levels of home coffee consumption (offering growth). Some of the company’s newer expansion markets are China, South Korea and the Middle East.

The ASX 200 blue-chip share looks much better value after falling 12% in the past year. At the time of writing, it’s trading at 29x FY27’s estimated earnings, according to Commsec.

The post 2 great ASX 200 blue-chip shares I’d buy right now! appeared first on The Motley Fool Australia.

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

This S&P/ASX 200 Index (ASX: XJO) resources stock caught a strong bid on Tuesday as investors piled back into anything even remotely tied to rare earths and critical minerals.

Iluka Resources Ltd (ASX: ILU) was one of the highflyers during Tuesday’s trade, finishing 6.2% higher at $6.68. That brings the total gain in 2026 to 15.4%, while the ASX 200 resources stock has soared by 35% in the past 6 months.

Let’s take a closer look.

Strategic rare earths player

This wasn’t about quarterly numbers or a surprise announcement from the company itself. Global markets woke up bullish on the idea of building rare earths supply chains outside China. That optimism washed straight onto the ASX, and Iluka fits neatly into that picture.

While best known for mineral sands like zircon and titanium, the ASX 200 resources stock also owns a strategically important rare earths refinery project. One that suddenly looks a lot more valuable in a world scrambling for secure supply.

Iluka’s strengths are clear. It controls some of the world’s highest-quality mineral sands deposits, has deep processing expertise, and enjoys strong government backing for its rare earths strategy.

The ASX 200 miner operates major assets in Western and South Australia and owns the Sierra Rutile business in West Africa. Its next phase of growth is taking shape in Western Australia, where Iluka is building the Eneabba rare earths refinery.

From side hustle to growth engine

The project aims to position Australia as a reliable supplier of critical minerals to global markets and reduce reliance on China. If successful, the Eneabba refinery could reshape the company.

The ASX 200 resources stock would move beyond mineral sands into vertically integrated rare earths production. It would supply oxides used in electric vehicles, wind turbines, and advanced electronics. These are markets with strong long-term demand.

If demand for electric vehicles, defence technology, and clean energy infrastructure continues to accelerate, Iluka’s exposure to critical inputs starts to look less like a side hustle and more like a growth engine.

However, risks remain. Mineral sands prices are cyclical and closely tied to global manufacturing conditions, with Chinese supply playing a major role. Recent production pauses underscore Iluka’s exposure to demand swings. Eneabba is also capital-intensive and relies on securing long-term offtake agreements. Delays or cost overruns could pressure valuations.

What’s next for Iluka shares?

There is also a dose of broker enthusiasm driving the current rally. Recent upgrades have reminded the market that the ASX resources stock combines solid cash flows today with leverage to a structural trend tomorrow. That’s a rare and appealing mix in the resources space.

It’s no surprise that analysts and investors are warming up to Iluka’s rare earths strategy. That long-term optionality is powerful.

Most brokers see the ASX 200 resources stock as a buy or strong buy. They have a 12-month average price target at $7.44, which points to a potential gain of 11%.  

The post Why this ASX 200 resources stock is off to a flying start in 2026 appeared first on The Motley Fool Australia.

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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 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 BlueScope Steel Ltd (ASX: BSL) share price is in focus today after the company announced it will return $438 million to shareholders via a $1.00 per share unfranked special dividend, following several recent asset sales and cash flow initiatives.

What did BlueScope report?

• Declared an unfranked special dividend of $1.00 per share, totalling $438 million
• Surplus cash generated from sale of 50% Tata BlueScope joint venture for $167 million
• Agreed sale of 33 hectares at West Dapto for $76 million
• Continued realisation of BlueScope Properties Group projects, releasing $200 million over FY25–FY26
• Dividend record date: 21 January 2026; payment date: 24 February 2026
• Dividend reinvestment plan not active for this special dividend

What else do investors need to know?

BlueScope’s board opted for a special unfranked dividend rather than a buy-back due to ongoing corporate activity and regulatory settings. The company’s capital management framework aims for a balanced approach, distributing at least 50% of free cash flow to shareholders through dividends and buy-backs.

In the past decade, BlueScope has invested more than $3.7 billion in growth projects and delivered over $3.8 billion in shareholder returns since FY17. The latest asset sales and working capital initiatives add to its disciplined capital management record.

What did BlueScope management say?

BlueScope MD & CEO Mark Vassella said:

This special dividend demonstrates BlueScope’s ability to generate and distribute returns to its shareholders. With a clear line of sight to the completion of our current significant capital investment program, BlueScope is positioned to not only return to the robust cash generation it has been known for, but to strengthen it further with the enhanced earnings of the business. The Board will continue to carefully balance investment in growth with shareholders returns as cash flows build.

What’s next for BlueScope?

BlueScope expects to ramp up free cash generation over the next 12–18 months as it completes its major investment program. Notably, capex is set to reduce by at least $500 million in FY27 compared to FY26 as these projects wind down.

Management highlights a focus on balancing investment in profitable growth with consistent shareholder returns, signalling further distributions as cash flows improve.

BlueScope share price snapshot

Over the past 12 months, BlueScope shares have risen 52%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has lifted 7% over the same period.

View Original Announcement

The post BlueScope returns $438m to shareholders with special dividend 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 silver price has exploded higher over the past 12 months, more than doubling in value during the period.

This means that miners with exposure to silver are printing money every time they pull an ounce of the precious metal out of the ground.

But how can investors position their portfolio to benefit from this? Let’s find out what Morgans is saying about one ASX silver stock.

Broker tips ASX silver stock as a buy

Morgans has been running the rule over BMC Minerals Ltd (ASX: BMC) shares following its IPO last month.

BMC is the 100% owner of the Kudz Ze Kayah (KZK) Project. It is an advanced polymetallic development project located in Canada’s Yukon territory. It comprises 372km2 of under-explored, resource rich tenure and is host to two deposits. It will produce three concentrates: silver/gold, copper, and zinc.

Morgans, which helped with the ASX silver stock’s IPO, believes its shares are still significantly undervalued despite rising over 40% since listing.

According to a note, the broker has initiated coverage on BMC Minerals’ shares with a speculative buy rating and $4.90 price target.

Based on its current share price of $2.82, this implies potential upside of 74% for investors over the next 12 months.

Morgans believes the company is positioned to generate significant EBITDA from its KZK project once it reaches steady state production. It commented:

We initiate coverage of BMC Minerals with a SPECULATIVE BUY rating and a target price of A$4.90ps. The Kudz Ze Kayah (KZK) project is a high grade undeveloped polymetallic deposit, with high silver equivalent reserve grades of 597g/t AgEq and an indicative ~32Moz Ag per annum production profile. Indicative economics of KZK are solid.

We model steady state average annual financials of US$780m revenue, US$435m EBITDA at a 52% EBITDA margin, US$287m FCF and FCF yields of 29% based on precious and base metals price assumptions well below current spot prices. With BMC, we see parallels to past prolific polymetallic/base metals assets which generated strong returns for shareholders: Vares for Adriatic, Nova-Bollinger for Sirius and De Grussa for Sandfire.

How else can you gain exposure to the booming silver price?

There are other ways for investors to get access to the silver boom.

One way is through the Global X Physical Silver Structured (ASX: ETPMAG).

Global X notes that this fund offers a low-cost and secure way to access physical silver via the stock exchange. This means investors can avoid the need to personally store their own bullion.

The post Want silver exposure? Morgans says this ASX silver stock is a buy appeared first on The Motley Fool Australia.

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

Building passive income is often made to sound far more complicated than it needs to be.

Many Australians assume it requires years of saving, deep knowledge of stock selection, or the ability to predict interest rates and economic cycles. That belief alone stops plenty of people from starting.

In reality, building a passive income portfolio can be remarkably simple. 

With a small starting balance, a handful of diversified ETFs, and a commitment to consistency, investors can begin today — even with as little as $500.

Keep it simple

One of the biggest advantages of exchange-traded funds (ETFs) is diversification. Rather than relying on the fortunes of a few individual companies, an ETF provides exposure to dozens or even hundreds of businesses in a single investment.

That diversification helps smooth returns and typically reduces volatility compared to holding a concentrated portfolio of individual shares. It also removes the pressure to “get it right” by picking winners.

For passive income investors, this means fewer decisions, less stress, and a smoother ride over time.

Low cost, easy to buy, easy to stick with

ETFs are also designed for simplicity.

They tend to have low management fees, keeping more of your money invested and compounding. Buying an ETF is no more difficult than purchasing a single share, and most brokers allow investors to start with relatively small amounts.

Crucially, ETFs encourage good behaviour. By spreading risk and reducing complexity, they make it easier to stay invested and avoid reacting emotionally to short-term market movements.

That discipline often matters far more than clever strategy.

Two ETFs that show how passive income investing works

To see how this approach can look in practice, it helps to consider a couple of well-known income-focused ETFs.

The Vanguard Australian Shares High Yield ETF (ASX: VHY) takes a straightforward approach to passive income. It invests in Australian companies with higher-than-average forecast dividend yields, resulting in a portfolio dominated by established blue-chip businesses such as banks, miners, and large industrial companies. Income is generated through dividends, often with the added benefit of franking credits. For many investors, this makes VHY a simple way to access reliable income from familiar Australian companies.

The BetaShares S&P 500 Yield Maximiser Fund (ASX: UMAX) uses a different strategy. It provides exposure to the 500 largest US companies while employing a covered-call strategy to generate additional income. This approach aims to deliver higher regular distributions and reduce portfolio volatility. The trade-off is that returns may be capped during strong market rallies, making UMAX more suitable for investors focused on income rather than maximum growth.

Together, these ETFs highlight how different income strategies can be packaged into simple, easy-to-buy investments without requiring investors to manage the complexity themselves.

Time and discipline do the heavy lifting

The real driver of passive income success is not trying to outsmart the market. It is time.

By investing regularly through dollar-cost averaging, investors spread their purchases across different market conditions. Reinvesting dividends compounds the effect by steadily increasing the number of units owned, which in turn generates more income over time.

At first, progress can feel slow. Over the years, however, compounding begins to accelerate, and the portfolio increasingly does the work on your behalf.

Foolish Takeaway

Building passive income does not require perfect timing, deep expertise, or large sums of money.

By automating regular investments into diversified ETFs, reinvesting income, and staying disciplined, investors can turn time into their most powerful ally. Starting small is not a disadvantage — it is simply the first step.

The post Want passive income? This simple ETF strategy makes it easier than most people think appeared first on The Motley Fool Australia.

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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 positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund. The Motley Fool Australia has recommended Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Deep Yellow Ltd (ASX: DYL) share price is in focus today after the company announced the confirmed start date for its new Managing Director and CEO, Greg Field. The board highlighted ongoing progress on Deep Yellow’s strategy to become a leading global uranium producer and gave thanks to outgoing Acting CEO Craig Barnes.

What did Deep Yellow report?

• Confirmation of Greg Field’s commencement as Managing Director and CEO on 2 February 2026
• Craig Barnes to return to his role as Chief Financial Officer after serving as Acting CEO
• Continued dual-pillar growth strategy focused on uranium production and development
• Portfolio includes advanced projects: Tumas (Namibia) and Mulga Rock (Western Australia)

What else do investors need to know?

The Deep Yellow board expressed confidence in Greg Field’s experience, noting his leadership comes as the company nears key decisions for its flagship Tumas Project and wider asset portfolio. Executive Chair Chris Salisbury highlighted a smooth leadership transition, thanking Craig Barnes for his work as Acting CEO.

Deep Yellow continues to pursue growth with exploration at Alligator River and Omahola, alongside merger and acquisition opportunities that align with its strategy. The company remains focused on positioning itself as a reliable, long-term producer in a sector responding to growing demand for clean, baseload power.

What did Deep Yellow management say?

The Board’s Executive Chair Chris Salisbury said:

The Board is pleased to have Greg start earlier in the role. We are looking forward to Greg’s considerable experience and his leadership as we move towards critical decisions for our Tumas Project and other developments in our portfolio.

What’s next for Deep Yellow?

Looking ahead, Deep Yellow will finalise its executive leadership transition and continue progressing development decisions for its advanced uranium projects. The company’s dual-pillar growth plan remains unchanged, with attention on project approvals, expansion opportunities, and sector developments in uranium supply and demand.

Deep Yellow’s trajectory is anchored by both project advancement and ongoing exploration activity. Management also signals interest in further M&A should opportunities align with the company’s long-term vision.

Deep Yellow share price snapshot

Over the past 12 months, Deep Yellow shares have surged 58%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 7% over the same period.

View Original Announcement

The post Deep Yellow welcomes new CEO as part of ongoing uranium growth strategy appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 a lot of ASX growth shares out there for investors to choose from.

To narrow things down, let’s take a look at five that brokers rate as buys. Here’s what you need to know about them:

Aristocrat Leisure Ltd (ASX: ALL)

Aristocrat Leisure is a global leader in gaming content and technology. While it is best known for land-based gaming machines, the company has built a much broader business spanning social casino games and online gaming. This diversification gives Aristocrat multiple growth pathways and reduces reliance on any single market.

Bell Potter believes it is well-placed for long term growth. It has a buy rating and $80.00 price target on its shares.

Breville Group Ltd (ASX: BRG)

Another ASX growth share that has been named as a buy is Breville Group. It has carved out a premium position in the global small appliances market. Rather than competing on price, Breville focuses on design-led products and innovation, particularly in coffee machines. This strategy has allowed it to build strong brand loyalty and maintain attractive margins. As consumers continue to premiumise everyday products, Breville has room to keep scaling internationally.

Morgans has a buy rating and $36.05 price target on its shares.

Lovisa Holdings Ltd (ASX: LOV)

Another ASX growth share that could be a buy in January is Lovisa. It is a fashion jewellery retailer that is currently undertaking a major global expansion. At the last count, it was operating 1,075 stores across more than 50 markets.

Morgans has named it as one of its top picks in the retail sector. The broker has a buy rating and $40.00 price target on its shares.

Neuren Pharmaceuticals Ltd (ASX: NEU)

A fourth share to look at is Neuren Pharmaceuticals. It is focused on treatments for rare neurological disorders, which is an area of high unmet medical need. Success in this space can lead to significant earnings growth due to limited competition and strong pricing power. For growth investors comfortable with volatility, this growth share could be worth considering.

Bell Potter is a big fan and has a buy rating and $25.00 price target on its shares.

Web Travel Group Ltd (ASX: WEB)

Finally, Web Travel Group could be an ASX growth share to buy. Following the spin-off of its consumer-facing Webjet operations in 2024, the company is now focused on its WebBeds platform, which connects hotels with travel agents and tour operators worldwide. As travel demand continues to normalise and grow, Web Travel Group’s asset-light platform positions it to deliver strong earnings growth.

Macquarie has an outperform rating and $6.85 price target on its shares.

The post 5 top ASX growth shares to buy now with $5,000 appeared first on The Motley Fool Australia.

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

After years of operational disruption, balance sheet repair, and reputational rebuilding, Qantas Airways Ltd (ASX: QAN) is starting to look like a very different business again.

Qantas is no longer the distressed turnaround story it once was. But I still think the market may be underestimating how much earnings power this airline now has, and how durable those earnings could be through 2026 and beyond.

Here’s why I’m bullish on Qantas shares from here.

Earnings power is back, and looks more sustainable

One of the biggest changes at Qantas over the past few years has been the reset of its cost base and network discipline.

Capacity is being deployed more rationally, fleet decisions are more measured, and management has been far more focused on returns rather than simply chasing volume. That matters in an industry where margins can disappear quickly if discipline slips.

Consensus estimates currently point to earnings per share of 117.5 cents in FY26 and 126.1 cents in FY27. Those are not peak-cycle numbers driven by one-off factors. They reflect a business that is operating more efficiently and extracting better economics from both its domestic and international networks.

Importantly, from my perspective, that suggests Qantas is no longer just benefiting from post-pandemic travel recovery, but from a structurally improved operating model.

The domestic position remains a key advantage

Qantas’ strength in the Australian domestic market continues to underpin the investment case.

It operates in a market with limited competitors, high barriers to entry, and rational pricing behaviour. That does not mean competition is absent; just ask Virgin Australia Holdings Ltd (ASX: VGN). However, it does mean that price wars are less likely to destroy industry profitability the way they have in the past.

Corporate travel is also an important piece of the puzzle. While volumes may fluctuate with economic conditions, Qantas’ position as the preferred carrier for many business travellers supports load factors, yield quality, and revenue stability.

This domestic dominance provides a solid earnings foundation that many global airlines simply do not have.

Loyalty and premium segments add resilience

Another part of Qantas that I think is often underappreciated is the contribution from its Loyalty division.

The frequent flyer program is a high-margin business with strong cash generation, and it benefits from long-term partnerships across banking, retail, and travel. It adds a layer of earnings diversification that helps smooth the inherently cyclical nature of aviation.

At the same time, Qantas’ focus on premium travel, both domestically and internationally, supports higher yields. Premium passengers are typically less price-sensitive and more loyal, which can be valuable when economic conditions are mixed.

Shareholder returns are back on the table

Income investors are also starting to look at Qantas differently again.

Dividend estimates currently stand at 46.9 cents per share for FY26 and 44.5 cents for FY27. This means that at the current Qantas share price of $10.20, the market is forecasting a dividend yield of 4.6% this year before any franking credits.

While dividends can always change, these figures reflect a business that is now generating sufficient cash flow to reward shareholders, not just repair the balance sheet.

For investors who remember when dividends were completely off the agenda, that shift is meaningful.

Qantas shares look good value

Based on consensus forecasts, Qantas is trading on a forward P/E ratio of 9 times. That looks cheap to me, given the level of earnings being generated and the improvements in business quality.

Airlines will never be low-risk investments. Fuel prices, demand shocks, and operational issues are part of the landscape. But Qantas today looks better equipped to handle those challenges than it has been for many years.

Foolish Takeaway

I’m bullish on Qantas shares because I think the business has emerged from a difficult period leaner, more disciplined, and more focused on returns.

Investors are not buying a blue-sky growth story. They are buying an airline with restored earnings power, a strong domestic position, improving shareholder returns, and a more resilient operating model.

If management continues to deliver on its strategy and industry conditions remain broadly supportive, I believe Qantas shares could continue to reward patient investors as we move through 2026.

The post Why I would buy Qantas shares 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 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.

Codan Ltd (ASX: CDA) shares have been among the best performers on the ASX 200 index over the past 12 months.

During this time, the metal detector and communications products company’s shares are up almost 140%.

Is it too late to invest? Let’s see what analysts at Bell Potter are saying about this high-flying share.

What is the broker saying about this ASX 200 share?

Bell Potter highlights that Codan released a trading update which outlines its expectations for the first half of FY 2026.

Pleasingly, the ASX 200 share is expecting to report sales and profits comfortably ahead of the broker’s expectations. It said:

In 1H26e, CDA expects to report revenue of $394m, up 29% YoY (+4.8% beat on VA consensus of $376m) comprising: Metal Detection revenue of $168m up 46% YoY (+18.9% beat on VA); and Communication revenue of $222m up 19% YoY (-3.9% miss) consistent with company’s target growth range of 15-20%. CDA expects 1H26e underlying NPAT of “not less than $70m”, up >52% YoY (+13% beat on VA consensus of $62m), implying NPAT margin of 17.8% (15.1% 1H25a).

The strong revenue and NPAT print appears driven by growth in gold detector sales in the African region, and metal detector sales in other key rest of world recreational markets. Growth in Communications revenue included a full 6 months of the Kagwerks acquisition (vs. 1 month in 1H25a).

Should you buy Codan shares?

While Bell Potter has updated its earnings forecasts for the coming years and boosted its valuation, it feels that the ASX 200 share is fairly valued after its strong run.

According to the note, the broker has retained its hold rating with an improved price target of $36.70 (from $27.80). This is largely in line with its current share price of $37.00.

Commenting on its hold recommendation, the broker said:

We have increased our EV/EBIT multiple in our blended DCF / relative valuation methodology to 40.0x to reflect improving defence sector sentiment and improving Metal Detection outlook. Our updated PT is $36.70. We retain our HOLD recommendation.

We believe CDA shares trade at fair value on 33x EV / EBIT (59% above its 2-year average) amidst improving operating momentum and improving outlook in both segments. Given the seasonality evident in the Metal Detection business we see potential for a FY26e Metal Detection revenue upgrade if positive commentary is given at the 1H26e result.

The post What is Bell Potter saying about this high-flying ASX 200 share after its 140% rise? appeared first on The Motley Fool Australia.

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