Tag: Stock pick

Coal was supposed to be in terminal decline.

Instead, it has become one of the best performing commodities of 2026, and New Hope Corporation Ltd (ASX: NHC) shareholders have been among the biggest beneficiaries.

The company’s third-quarter FY 2026 update, released this week, tells investors a great deal not just about New Hope itself but about the state of the broader coal market right now.

What the quarterly update showed

New Hope reported a 5% quarter-on-quarter increase in group run-of-mine coal production to 4.3 million tonnes for the April quarter.

Group coal sales rose 10.4% to 3.2 million tonnes, while the average realised sales price improved 1.2% to $140.7 per tonne.

Together, those improvements lifted underlying EBITDA 21.7% to $130.1 million compared to the prior quarter.

At its key operating asset, Bengalla Mine in the Hunter Valley, saleable coal production rose 13.5% to 2.1 million tonnes and Free On Board (FOB) cash cost fell 12.4% to $74 per tonne, tracking well below the company’s FY 2026 guidance range of $81 to $89 per tonne.

That cost performance gives New Hope some protection against any near-term softening in coal prices.

What this tells us about the coal market

The quarterly update is also a useful window into the broader thermal coal market, and the picture it paints is more constructive than many investors might expect.

The Newcastle thermal coal benchmark averaged US$127.6 per tonne during the April quarter, up 16.5% on the prior quarter, driven by a combination of factors.

Middle East tensions have pushed natural gas prices higher, causing power stations across Asia to switch back to cheaper coal as a substitute fuel.

Moreover, cold weather across North Asia simultaneously lifted heating demand, while Japan and South Korea continued to prioritise grid stability through reliable coal-fired baseload generation.

Meanwhile, a longer-term supply squeeze is developing in the background.

Years of reduced investment in new coal mine development, driven by ESG pressures on banks and institutional investors, also has led to global supply gradually tightening as demand falls more slowly than anticipated.

That mismatch benefits low-cost producers like New Hope, who is now selling into a progressively tighter market.

The balance sheet and shareholder returns

Beyond the operational numbers, New Hope also took meaningful balance sheet action during the quarter.

The company successfully issued $300 million in new convertible notes due 2032 while repurchasing $293.3 million of notes due 2029, extending its debt maturity profile and reducing near-term refinancing risk.

The cash balance at quarter end stood at $571 million.

Shareholders also received a fully-franked interim dividend of 10 cents per share during the quarter, totalling $84.3 million.

Foolish Takeaway

New Hope’s quarterly update confirms that the coal price recovery is real.

For investors comfortable with the ESG considerations that come with owning a thermal coal stock, New Hope offers a cash-generative, low-cost producer with a strong balance sheet and a track record of returning capital to shareholders.

For those who are not, the update at least provides a useful read on what is driving energy markets in 2026.

The post Here is what this ASX stock’s quarterly update tells investors about the coal market in 2026 appeared first on The Motley Fool Australia.

More reading

• Analysts are split over whether New Hope shares are a buy or a hold
• Why it could be time to move on from this booming ASX energy stock
• What is Morgans saying about Megaport and New Hope shares
• Why Elders, New Hope, Pro Medicus, and Tuas shares are storming higher today
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Mark Verhoeven 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 Contact Energy Ltd (ASX: CEN) share price hit the spotlight today following news that major shareholder Infratil Ltd (ASX: IFT) completed the sale of a 5% stake in the company, comprising over 53 million ordinary shares at $9.25 per share.

What did Contact Energy report?

• Infratil sold 53,531,358 ordinary shares, equating to 5% of Contact Energy’s issued share capital
• Shares were sold at $9.25 each
• The trading halt on Contact Energy shares will be lifted
• No changes announced to company operations or leadership

What else do investors need to know?

The sale by Infratil represents a significant shift in Contact Energy’s shareholder structure, with Infratil confirming it has sold down its holding but remaining a substantial shareholder. The trading halt, put in place to manage the market implications of this transaction, is set to be lifted soon following completion of the block trade.

There have been no announcements regarding changes to Contact Energy’s strategy, operations, or management as a result of this transaction. Everyday shareholders are likely to see increased liquidity in Contact’s shares as a result of the sell-down.

What’s next for Contact Energy?

Contact Energy has reiterated its commitment to ongoing business strategy, focusing on providing reliable energy solutions and supporting New Zealand’s transition to renewable energy. The company remains focused on operational efficiency and enhancing shareholder value, according to previous communications.

With Infratil’s partial exit, investors will be watching for any further movements in the shareholder register, but no changes to long-term company plans were flagged today.

Contact Energy share price snapshot

Over the past 12 months, Contact Energy shares have risen 1%, matching the S&P/ASX 200 Index (ASX: XJO) which has also risen around 1% over the same period.

View Original Announcement

The post Contact Energy shares resume trading after 5% stake sale appeared first on The Motley Fool Australia.

More reading

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• L1 Long Short Fund boosts dividend as returns eclipse market
• Northern Star Resources announces CEO succession plan
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Green hydrogen has been one of the most hyped investment themes of the past five years.

Australia, with its vast renewable energy resources and proximity to energy-hungry Asian markets, has positioned itself as a potential global leader in green hydrogen exports.

But after a difficult 2025, which saw dozens of major projects cancelled or delayed globally and production costs stubbornly high, ASX investors may be asking whether now is the right time to capture this theme.

Why the near-term picture is challenging

Green hydrogen has had a rough time of late.

The product currently costs significantly more to produce than fossil fuel alternatives.

Until the cost of renewable electricity falls further and electrolyser technology scales, green hydrogen will struggle to compete on price in most markets.

Investors who bought into the hype in 2021 and 2022 have learned this the hard way.

But the long-term case remains intact

Yet despite the doom and gloom, there is reason to be optimistic.

The global green hydrogen market was valued at US$9.09 billion in 2024 and is projected to reach US$134.86 billion by 2030, growing at a compound annual growth rate of 56.75%.

Australia has signed export agreements with Japan, South Korea, and Germany.

These markets all face structural energy insecurity and are actively seeking clean hydrogen imports.

Furthermore, Australia’s National Hydrogen Strategy, backed by funding from the Australian Renewable Energy Agency, continues to invest in bringing production costs down through scale.

The question for investors may not therefore be whether green hydrogen has a future, but which ASX stocks offer the best exposure.

Fortescue

Fortescue Ltd (ASX: FMG) offers the most direct large-cap ASX exposure to green hydrogen through its Fortescue Energy division.

This division is pursuing a series of large-scale green hydrogen and green ammonia projects across multiple continents.

The company has committed to achieving net zero Scope 1 and 2 emissions across all its operations by 2030.

This target requires it to produce and consume significant volumes of green hydrogen itself.

The company’s balance sheet, backed by its iron ore earnings, gives it the financial capacity to stay in the game longer than any pure-play hydrogen developer.

For investors, Fortescue offers a way to gain green hydrogen optionality while being underwritten by a profitable, cash-generative iron ore business.

Woodside

Woodside Energy Group Ltd (ASX: WDS) takes a more pragmatic approach to the hydrogen opportunity.

The company pursues both blue hydrogen projects using carbon capture and storage as a near-term bridge, and green hydrogen development as a longer-term ambition.

Its H2Perth project aims to produce green hydrogen and ammonia for export from Western Australia, leveraging the state’s abundant solar and wind resources.

Woodside’s financial strength, with operating revenue of US$3.26 billion in Q1 2026, gives it the capacity to fund long-dated hydrogen development alongside its core LNG business without straining the balance sheet.

In that sense, Woodside represents a more conservative and diversified way to access the theme.

Global X Hydrogen ETF

For investors who want broader exposure to the global hydrogen value chain without picking individual companies, the Global X Hydrogen ETF (ASX: HGEN) is a great ASX-listed option.

The fund invests in companies globally across hydrogen production, fuel cell development, and hydrogen infrastructure, and has delivered remarkable gains in the past 12 months.

That recovery reflects growing investor optimism that the cost curve for green hydrogen is beginning to inflect downward, even if commercial viability at scale remains a few years away.

Foolish Takeaway

For patient investors, Australia’s advantages in renewable energy production make it one of the most credible potential green hydrogen exporters.

FMG and WDS offer diversified exposure with strong balance sheets as a backstop.

HGEN, on the other hand, provides a higher-risk, higher-reward way to invest in the entire global hydrogen value chain.

The post Is green hydrogen still Australia’s next great opportunity? Here is what ASX investors need to know appeared first on The Motley Fool Australia.

More reading

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• Passive income investors: These 3 ASX dividend shares yield 5% (or more)

Motley Fool contributor Mark Verhoeven 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 Northern Star Resources Ltd (ASX: NST) share price is in focus after the company announced its Managing Director, Stuart Tonkin, will step down during the first quarter of FY27. Tonkin’s 13-year tenure has seen Northern Star grow into Australia’s largest ASX-listed gold producer, providing leadership through a significant period of expansion and transformation.

What did Northern Star Resources report?

• Managing Director Stuart Tonkin to exit in Q1 FY27
• Company has expanded to three production centres across WA and Alaska
• Over 10,000 staff and contractors now employed
• Fimiston Mill Expansion to be commissioned before Tonkin departs
• Board commencing process to appoint new Managing Director

What else do investors need to know?

Northern Star’s growth under Tonkin was delivered through a series of major acquisitions and mergers. These included the addition of Plutonic, Kanowna Belle, Jundee, Pogo in Alaska, and the large-scale takeover of De Grey Mining, bringing the substantial Hemi development project into the fold.

An orderly succession is being prioritised. The board plans to engage a global search firm, and will consider both internal and external candidates to ensure the company’s next phase of leadership matches its strong growth ambitions.

What did Northern Star Resources management say?

Managing Director Stuart Tonkin said:

After 13 years leading Northern Star through significant growth, I’m proud to leave the Company in an exceptional position. The team, the assets and the outstanding growth outlook is unique and after many years of rewarding challenges, I have decided to step down.

I am very proud of what we have achieved at Northern Star and I want to especially thank my executive team and all our staff and contractors for the role they’ve played in building such a great company over the years, there is an exciting future ahead.

What’s next for Northern Star Resources?

The immediate focus for Northern Star will be commissioning the KCGM Fimiston Mill Expansion while delivering on the final year of its current strategic plan. The upcoming leadership transition has been carefully planned, aiming for a seamless handover while maintaining momentum in both operations and strategy.

Longer term, the company continues to target further growth, backed by its sizable production base in Australia and Alaska, ongoing project development, and a commitment to strong safety and stakeholder outcomes.

Northern Star Resources share price snapshot

Over the past 12 months, Northern Star shares have risen 1% matching the S&P/ASX 200 Index (ASX: XJO) which has also risen 1% over the same period.

View Original Announcement

The post Northern Star Resources announces CEO succession plan appeared first on The Motley Fool Australia.

More reading

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• Contact Energy shares resume trading after 5% stake sale
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Superannuation is a great place to invest for passive income because of the lower tax rate and the fact that it doesn’t rely on negative gearing or capital gains discounts to be an effective strategy.

I’m going to look at two ASX-listed shares that could be very effective dividend investments.

With high yields, diversification and the potential for long-term growth, I think they’re excellent choices with $20,000 for the following reasons.

MFF Capital Investments Ltd (ASX: MFF)

MFF is best-known as a listed investment company (LIC) that invests in a high-quality portfolio of shares that have compelling competitive advantages and above-average earnings growth potential. It owns plenty of the world’s leading companies in its portfolio, though it can adjust if it needs to.

It doesn’t take massive earnings growth for a business to deliver great returns – simply compounding earnings per share (EPS) at a good pace can lead to good results (as well as dividends for investors).

MFF’s strong portfolio returns have enabled the business to deliver average total shareholder returns (TSR) in the double digits.

The business has rapidly hiked its annual dividend per share over the past several years. In FY26 alone it expects to hike its annual payout by 23.5% year-over-year to 21 cents per share, which translates into a forward grossed-up dividend yield of more than 6%, including franking credits. I think that’s a great starting point for a passive income investment in superannuation.

I predict the FY27 annual dividend per share could be 25 cents, if it continues its trend of increasing the payout by 1 cent per share every six months. That would translate into a grossed-up dividend yield of 7.3%, including franking credits, at the time of writing.

Charter Hall Long WALE REIT (ASX: CLW)

Another ASX share I really want to tell you about is this diversified real estate investment trust (REIT).

It’s invested in various types of properties including government buildings (such as Geoscience Australia), pubs, supermarkets and distribution centres, data centres, telecommunication exchanges, service stations, food manufacturing, waste and recycling management, Bunnings properties and plenty more.

We don’t necessarily need to invest in various properties or REITs ourselves to get diversification – this one ASX share can give superannuation investors great property-generated passive income and diversification.

A key part of the strategy is to own properties that have long leases with tenants. With an occupancy rate of 99.9% and a weighted average lease expiry (WALE) is around nine years, so it has very pleasing rental characteristics.

It’s delivering decent rental growth too. The FY26 half-year result included 3% like-for-like growth in property income through a mixture of inflation-linked rental income and fixed annual increases.

For FY26, it expects to hike its annual distribution per unit by 2% to 25.5 cents. That translates into a forward distribution yield of 7.3%. In my view, that’s a very strong starting yield.

It’s not the only two ASX shares I’d buy though, there are a few other appealing picks.

The post How to invest $20,000 for passive income in superannuation appeared first on The Motley Fool Australia.

More reading

• How to build a passive income stream with ASX shares
• How much is needed in superannuation to target a $5,000 monthly passive income?
• How much do I need to invest in ASX shares for $500 a month of passive income?
• Forget term deposits! I’d buy these ASX dividend shares instead
• How to invest $5,000 for passive income in superannuation?

Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments. 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 recommended Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Zip Co Ltd (ASX: ZIP) shares have had a rough run.

The buy now, pay later (BNPL) and digital payments company’s shares are down around 55% from their 52-week high, which shows just how quickly sentiment can shift toward growth shares.

But I think this sell-off could be creating an opportunity.

Zip is not the speculative business it was during the peak of the BNPL boom. The company is now profitable, more focused, and showing strong momentum in its core markets.

For investors comfortable with risk, I think Zip shares could be worth buying after such a large fall.

A different Zip from a few years ago

The Zip story has changed a lot.

During the market’s earlier excitement around BNPL, investors were focused heavily on growth. Profitability was often pushed further into the future.

That is no longer the case.

Zip is now operating in two core regions, Australia and New Zealand, and the United States. Management recently described the business as sustainably profitable, with a leading and profitable ANZ business and a high-growth US business executing strongly in an early-stage market.

That is important because investors are no longer being asked to simply believe in a long-term story without evidence of progress.

The company is also much more focused than it used to be. It has exited non-core distractions and is now concentrating on markets where it believes it has scale and a clearer path to growth.

The US opportunity is the big prize

The main reason I would consider buying Zip is the United States.

Zip serves 4.6 million active customers in the US, compared with 1.9 million in ANZ. It also points to more than 100 million Americans who it believes are underestimated by traditional financial services providers.

That is a huge potential market.

Zip’s pitch is that it can underwrite these customers profitably using its own data and models. The company says more than 98% of US transactions are repaid in full, and that it has underwritten US$25 billion in total transaction volume across 192 million transactions to date.

Of course, lending risk needs to be watched closely. If unemployment rises or consumer stress worsens, losses could increase.

But I like the fact that Zip is showing growth while still keeping credit outcomes within its target range.

The valuation looks interesting

The share price fall also makes the valuation more appealing.

According to CommSec consensus estimates, Zip is expected to generate earnings per share of 10.9 cents in FY27 and 17 cents in FY28.

Based on current pricing, that puts the stock on P/E ratios of around 20 times estimated FY27 earnings and 13 times estimated FY28 earnings.

That does not look expensive to me if Zip can keep growing strongly.

Foolish Takeaway

Zip shares are not for everyone.

This is still a higher-risk ASX share exposed to consumer credit, competition, regulation, funding conditions, and investor sentiment toward growth stocks.

But I think the market may have become too pessimistic after the 55% fall.

Zip is profitable, focused on its strongest markets, growing quickly in the US, and trading on a valuation that could look very reasonable if earnings keep rising.

For patient investors who can handle volatility, I think Zip shares could be a good buy at current levels.

The post Down 55%: Should I buy Zip 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 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.

Even though the S&P/ASX 200 Index (ASX: XJO) has come off the record highs we saw earlier this year, the yields on many ASX 200 dividend stocks remain quite low by historical standards. Popular passive income stocks like Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), and Woolworths Group Ltd (ASX: WOW) remain under 3% right now.

With interest rates rising and safe investments like term deposits now offering interest rates above 5%, many income investors are simply looking for larger yields. Fortunately, there are a few ASX 200 dividend shares that still carry yields of 4% or greater, many with full franking credits on the table too. Today, let’s go over three of them.

3 ASX 200 dividend stocks with yields greater than 4% today

Woodside Energy Group Ltd (ASX: WDS)

A huge run-up over the past two months or so hasn’t brought ASX 200 energy stock Woodside’s dividend completely down to earth just yet. At recent pricing, Woodside shares were trading on a trailing dividend yield of 5.1%. All ASX dividend shares’ yields should be taken with a grain of salt, and energy shares particularly so.

Despite this, if oil and gas prices remain elevated, there’s a strong possibility that this ASX 200 share will continue to dole out fat, fully-franked dividends for a while yet.

Metcash Ltd (ASX: MTS)

IGA distributor Metcash is next up. This consumer staples company, and ASX 200 dividend stock, has had a lacklustre few years on the ASX, with its shares down almost 15% from where they were five years ago at the time of writing. However, this unimpressive stock price performance has helped push Metcash’s yield quite high.

At the time of writing, this stock is sitting on a trailing yield of 6.05%, replete with full franking. Some brokers think Metcash is still in for a difficult time over 2026 and beyond. But the company would have to cut its dividend dramatically for it to lose its hefty income potential that its current yield suggests.

Westpac Banking Corp (ASX: WBC)

Finally, we can’t get through a dividend share list without including an ASX 200 bank stock. Westpac is that bank share today. Unlike its peer, Commonwealth Bank of Australia (ASX: CBA), Westpac still offers a bank-like yield too. At recent pricing, Westpac was sitting on a trailing dividend yield of 4.34%. Again, Westpac usually attaches full franking credits to its payouts as well.

Investors may draw further hope from how Westpac’s last two dividend payments have been larger than the two that preceded them. Let’s see if the next two follow the same pattern.

The post 3 ASX 200 dividend stocks with yields over 4% today appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ANZ, Westpac, NAB and CBA shares: Analysts rate 2 a hold, and 2 a sell
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• 3 ASX stocks that could benefit from oil prices hitting US$105 a barrel

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

If you are looking for ASX dividend shares to buy, then it could be worth listening to what Bell Potter is saying about the two in this article.

The broker has named them among its best buys for the month and is expecting some attractive dividend yields and major upside in the near term.

Here’s what the broker is recommending to clients:

COG Financial Services Ltd (ASX: COG)

This asset finance company has been named as an ASX dividend share to buy in May by Bell Potter.

Commenting on the company, the broker said:

COG Financial (COG) is a diversified conglomerate of distribution businesses focused on Australia. The group principally provides access to credit providers (and related insurance) for yellow commercial goods. This is delivered through a nationwide broker net. In addition, the company has some balance sheet funded direct originations, with a focus on capturing some of the overflow for non-prime chattel mortgages. A proportion of this is offered under peer-to-peer lending. Following the acquisition of Paywise, the company has articulated an external accumulation strategy, focused on novated leasing and salary packing services.

As for income, Bell Potter is forecasting fully franked dividends of 7 cents per share in FY 2026 and then 8.9 cents per share in FY 2027. Based on its current share price of $1.50, this would mean dividend yields of 4.7% and 5.9%, respectively.

Bell Potter has a buy rating and $2.30 price target on its shares, which implies potential upside of 53%.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX dividend share that has been named as a best buy is youth fashion retailer Universal Store.

Bell Potter highlights its positive growth outlook, strong return on equity, and cheap valuation as reasons to buy. It said:

Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 11% p.a. Valuation looks attractive, trading on a forward P/E of ~12.5x. UNI is a quality small cap (ROE ~26%) that is executing on its rollout strategy.

The broker expects this to underpin fully franked dividends of 36.9 cents per share in FY 2026 and then 39.3 cents per share in FY 2027. Based on its current share price of $6.34, this equates to generous dividend yields of 5.8% and 6.2%, respectively.

Bell Potter has a buy rating and $9.30 price target on its shares. This implies potential upside of almost 50% for investors.

The post Bell Potter names the best ASX dividend shares to buy in May appeared first on The Motley Fool Australia.

More reading

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• Why this could be one of the best ASX dividend stocks to buy now
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• Forget BHP shares! Buy these ASX dividend shares instead for passive income

Motley Fool contributor James Mickleboro has positions in Universal Store. 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 recommended Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Most investors chasing the green energy transition head straight for lithium miners or solar stocks.

But there is a quieter, less glamorous, and arguably more interesting way to play the same trend.

Sims Ltd (ASX: SGM) is the world’s largest publicly listed metal and electronics recycler, and the forces driving demand for recycled metals are only getting stronger.

The company provides a crucial circular economy service that reduces the need for new metals and electronics.

What Sims actually does

Sims operates across five business segments, buying, processing, and selling ferrous and non-ferrous recycled metals across 30 countries.

The company also provides IT asset disposal and lifecycle services through its Sims Lifecycle Services division.

Consequently, every electric vehicle manufactured, every wind turbine installed, and every data centre built creates a source of future recyclable material and a driver of demand for the recycled metals Sims produces today.

In that sense, Sims sits at both ends of the green energy supply chain simultaneously.

The numbers are turning in the right direction

Sims delivered a 70.9% jump in underlying net profit after tax to $60 million for the half year ended 31 December 2025, alongside a 3.7% lift in sales revenue.

The standout performer was Sims Lifecycle Services, which delivered a 247.5% jump in underlying EBIT, driven by surging global demand for used DDR4 chips as hyperscale and AI data centre builds accelerate.

Moreover, the North America Metal and SA Recycling divisions both delivered higher trading margins, even as volumes from processed scrap reduced slightly.

Sims shares have comfortably outpaced the performance of the ASX200 these past 12 months.

The FY2026 outlook

In March 2026, Sims flagged an expected FY2026 underlying EBIT of between $350 million and $400 million.

This was driven by a strong third quarter and a materially improved second half in both its North America Metals and SA Recycling divisions.

Management noted that despite continued high Chinese steel exports putting pressure on scrap prices, Sims’ Metal business remains supported by robust non-ferrous pricing and a focus on sourcing more unprocessed material.

Through its SA Recycling investment, the company has also achieved an 8.3% compound annual growth rate in sales volume from FY2021 to FY2026, with 147 operational facilities now running across 15 US states.

Furthermore, the company’s Investor Day in Nashville confirmed a busy pipeline of bolt-on acquisitions through SA Recycling, reinforcing the long-term growth ambition.

Foolish takeaway

Sims does not attract the same headlines as the more trendy names in the green transition.

However, as a critical enabler of the circular economy, it benefits from the same tailwinds as lithium miners and solar developers, while offering a more established earnings base and a more attractive valuation.

For investors looking for an ASX metal recycling stock with genuine long-term credentials, Sims deserves serious attention.

The post Why this ASX stock could be a surprise winner as metal recycling demand surges appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today

Motley Fool contributor Mark Verhoeven 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.

Coal miner New Hope Corporation Ltd (ASX: NHC) released a quarterly production report this week, prompting the broker community to take a closer look at the company.

Interestingly, the brokers don’t agree on whether the company is fully valued at the moment, with Macquarie breaking ranks with an outperform rating on the shares.

We’ll have a closer look at some of the broker share price targets for New Hope shortly.

First, let’s have a look at what they announced this week.

Robust production numbers

The company said in its quarterly report that its coal production was “strong”, coming in at 4.3 million tonnes for the quarter, up 5% on the previous quarter.

Coal sales were 10.4% higher at 3.2 million tonnes, while the average realised price inched up from $139 per tonne to $140.70 per tonne.

New Hope said the underlying EBITDA for the quarter was $130.1 million, up 21.7% on the previous quarter, and the company had cash of $571.6 million.

The company said the conflict in the Middle East had been supportive of higher coal prices.

It said:

During the quarter, geopolitical conflict in the Middle East caused disruption and uncertainty to global energy markets. Global coal markets observed favourable price movements during the quarter, driven by concerns surrounding Middle Eastern LNG availability and shifting gas-to-coal for power generation. Japan, South Korea and Taiwan (JKT) increased coal imports, prioritising energy security amidst LNG supply disruption. Japan and South Korea have eased restrictions on older coal plants and postponed planned retirements. The Company anticipates increased demand in the coming quarter, as the Northern Hemisphere moves out of the shoulder season and into Summer. Looking ahead, the Group’s forward sales book remains well supported with the majority of production for the next three months sold.

Broker dissent

In terms of the brokers that follow the company, both Bell Potter and Morgans have a hold recommendation on New Hope shares.

Bell Potter said they had increased their price target for the company from $4.50 to $5, after they applied “a 10% premium to our sum of the parts valuation with energy security concerns exacerbated by recent geopolitical issues”.

Their price target is still below the current share price of $5.44, however.

Morgans has a price target of $5.25 on the shares, up from $5 previously, saying New Hope “continues to be well-positioned to deliver low-cost, high-margin cash flow from its operations”.

They added:

We believe coal prices can rebound meaningfully above consensus over time, and NHC is positioned to capitalise, driving stronger cash flow and shareholder returns.

Macquarie, however, is an outlier with a bullish price target of $7 on New Hope shares.

Macquarie said:

Improving (stabilising) performance at Bengalla (hitting target run rates) and ongoing ramp-up at New Acland positions New Hope well in what could become a tighter market for thermal coal as global energy disruptions continue from the Middle East conflict.

The post Analysts are split over whether New Hope shares are a buy or a hold 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.