Tag: Stock pick

S&P/ASX 300 Index (ASX: XKO) shares that have been sold off could be turnaround opportunities due to the low expectations placed on them at the current valuation.

Some names in the retail sector have experienced significant declines recently, as trading updates were not as good as expected.

There’s no guarantee that disappointment in the latest update will mean a positive surprise in the next one. However, on a three- or five-year view, I think there are some names capable of recovering substantially from their current position, such as the following two.

Accent Group Ltd (ASX: AX1)

Accent owns several retail brands, including The Athlete’s Foot, Nude Lucy, Stylerunner and Platypus. It also sells various global shoe brands, including Vans, Ugg, Skechers and Hoka. The business has also started opening Sports Direct stores in Australia.

The trading update for FY26 did not impress the market. While total group-owned sales were up 3.7%, like-for-like sales were down 0.4% and the gross profit margin for FY26 year to date was down 160 basis points (1.60%) compared to the prior year. Operating profit (EBIT) is expected to be in the range of $85 million to $95 million for FY26.

The ASX 300 share has a number of initiatives to deliver growth, including opening 50 Sports Direct stores over the next six years, rolling out dozens of stores for the other brands (including Stylerunner and the highly profitable Nude Lucy), buying back The Athlete’s Foot stores from franchisees and growing new distributed brands.

According to the forecast from UBS, the Accent share price is valued at under 11x FY27’s estimated earnings after falling close to 30% in a month.

The weaker performance is disappointing, but I believe it can bounce back from this level and potentially surprise investors.

Adairs Ltd (ASX: ADH)

Adairs is a furniture and homewares business which sells items through three different brands – Adairs, Mocka and Focus on Furniture.

The Adairs share price has fallen by more than 30% since 19 September 2025, making it appear to be a better value proposition if there’s a recovery in the medium term. I believe that’s possible following the rate cuts by the RBA and the end of high inflation.

The ASX 300 stock’s update was also not exciting – it downgraded its sales expectations to a range of $319.5 million to $331.5 million, down from the previous range of $324.5 million to $336.5 million. The gross profit margin guidance was narrowed to between 59% to 59.5%.

I’m hopeful of a recovery in consumer spending overall, but Adairs is working on plans to improve, which could be more impactful.  

It wants to reduce Adairs’ inventory and cut the item count by 10%, maximise key sales periods, enhance the Linen Lover membership value, launch new store formats and upgrade its technology.

The ASX 300 share wants Focus on Furniture to be Australia’s favourite furniture retailer by improving product quality and stock availability, expanding the choice of fabrics and colours, be faster to market with on-trend furniture, it’s offering customers flexible payment options, it’ll open dozens of more stores and accelerate store upgrades.

Finally, with the Mocka business, it wants to build brand awareness, expand the range and open a physical store trial in Australia.

According to the forecast from UBS, Adairs is trading at 8x FY27’s estimated earnings.

The post These 2 ASX 300 shares are bargain buys appeared first on The Motley Fool Australia.

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

The ASX dividend stalwart Wesfarmers Ltd (ASX: WES) should be one of the top contenders for most passive income investors.

There are three key factors I look for in dividend-paying businesses – a strong dividend yield, a rising dividend payout, and growing earnings.

Wesfarmers is the parent company of a number of businesses, including Officeworks, Kmart, Bunnings, chemicals, energy and fertiliser (WesCEF), industrial and safety, and more.

The company has been a steady presence on the ASX for many years, giving shareholders stability. Let’s run through the three elements of the ASX dividend stalwart’s appeal.

Dividend yield

For investors seeking a good level of dividend income in year one, I think Wesfarmers ticks the box.  

The business is predicted to pay an annual dividend per share of $2.17 in FY26, according to the forecast on CMC Markets. At the time of writing, this translates into a grossed-up dividend yield of 3.9%, including franking credits.

That’s certainly not the biggest payout around, but there’s more to consider about an ASX dividend share than just its dividend yield. For example, can its payouts match/exceed inflation, and can it grow profit to justify a higher Wesfarmers share price?

Rising payout from the ASX dividend stalwart

Wesfarmers has a track record of growing its payout most years, which is pleasing for investors wanting a portion of the profits each year.

On its website, the company states its goal for rising payouts:

With a focus on generating strong cash flows and maintaining balance sheet strength, the group aims to deliver satisfactory returns to shareholders through improving returns on invested capital.

As well as share price appreciation, Wesfarmers seeks to grow dividends over time commensurate with performance in earnings and cash flow. Dependent upon circumstances, capital management decisions may also be taken from time to time where this activity is in shareholders’ interests.

In FY25, the company decided to hike its annual dividend per share by 4% to $2.06. According to projections on CMC Markets, it’s predicted to grow its payout by 5% in FY26 and then by another 10.5% in FY27 to $2.40 per share.

Growing earnings

Wesfarmers is not a high-flying tech stock, but the last six years have shown how Kmart and Bunnings are leaders in Australia, helping grow Wesfarmers’ bottom line. Both businesses have impressed me with their ability to grow market share with their good value products, earning high returns on capital (ROC) for shareholders, and continuing to find new sources of growth.

For example, Bunnings has sought to expand in areas such as pet care and auto care. Kmart has looked to sell its Anko products in overseas markets, such as North America and the Philippines.

I like how the company has the ability to look to new sectors to grow its earnings, such as healthcare and lithium mining. Healthcare is such a large industry, and Wesfarmers can use its scale to succeed in this sector, growing in various areas of that industry (such as pharmacies or digital healthcare).

By FY27, the ASX dividend stalwart is predicted to deliver earnings per share (EPS) of $2.73. That means, at the time of writing, it’s trading at under 30x FY27’s forecast profit.

The post An ASX dividend stalwart every Australian should consider buying appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. 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.

S&P/ASX 200 Index (ASX: XJO) shares can be more attractive for passive income than a term deposit for a few different reasons.

Stocks can provide a larger dividend yield, payout growth, and hopefully capital growth. Term deposits are limited to the guaranteed income they provide – there’s capital protection but no further potential returns.

Some businesses can deliver stable (and growing) earnings, which provides the tailwind for both dividend and share price growth. The two ASX 200 shares below are appealing options.

Telstra Group Ltd (ASX: TLS)

Telstra is Australia’s leading telecommunications business, with significant advantages over competitors. It has the widest network coverage, the best spectrum assets, the most subscribers, and more.

The company has defensive earnings, in my opinion, due to the fact that many households, businesses, and other organisations seem to place a high importance on having an internet connection.

Telstra has a significant market share of both NBN and mobile connections, giving the business pleasing operating leverage. The more subscribers it has, the more its costs can be spread across those users, enabling a strong profit margin.

The regular growth of subscribers and average revenue per user (ARPU) is helping the company’s bottom line. Further digitalisation of the Australian economy could lead to further improvements in these metrics.

The Telstra mobile division delivered income growth of 3% to $11 billion and operating profit (EBITDA) growth of 5% to $5.3 billion in FY25, helping Telstra’s earnings per share (EPS) climb 3.2% to 19.1 cents and fund a 5.6% rise in the dividend per share to 19 cents.

I think there’s a good chance the ASX 200 share will hike its annual dividend per share again to approximately 20 cents in FY26. At the time of writing, this would be a forward grossed-up dividend yield of 5.9%, including franking credits.

Scentre Group (ASX: SCG)

This ASX 200 share is the owner of the Westfield shopping centres around Australia and New Zealand.

While retail isn’t one of the most resilient areas of the economy, I think rental income is defensive and predictable. Many of the retailers that lease one of the shops need to have a physical space to sell their items; otherwise, they wouldn’t have much of a business.

There isn’t any empty real estate to build another large shopping centre near existing Scentre locations in the city, so the Westfield locations don’t have much competition to worry about. Online shopping is a headwind, but click and collect sales still require the physical store, and Scentre can lease excess space for other activities beyond retail (such as food, entertainment, education, and so on) in the long term.

In its November update, it said that customer visitation for the 45 weeks to 9 November 2025 was 453 million, up 3.1% year over year. Total annual business partner sales across its portfolio to 30 September 2025 were $29.5 billion, up $760 million. Total business partner sales growth was 3.7%, with specialty sales up 4.4%.

Those are promising sales, which suggest the ASX 200 shares’ rental income can continue to grow, with a reported average specialty rent escalation of 4.4% in the nine months to 30 September 2025. Its portfolio occupancy is very high at 99.8%, up 40 basis points (0.4%) on the same period in 2024.

It expects to grow its 2025 distribution by 3% to 17.72 cents per security, translating into a distribution yield of 4.4%, at the time of writing.

The post Forget term deposits! I’d buy these two ASX 200 shares instead appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

If you’ve been watching the ASX lately, you will know it has been a bruising few months. Fears of an overheating AI boom, shifting interest rate expectations, and slowing consumer demand have sparked a sharp market pullback, the kind that makes even experienced investors a little uneasy.

But it is important to remember that every major selloff in Australian market history has eventually turned into an opportunity.

The GFC, the COVID crash, the late-90s wobble, all of them looked terrifying in the moment, yet long-term investors who stepped in during the panic ended up miles ahead.

And right now, several of Australia’s highest-quality ASX shares have fallen so far from their highs that they are starting to look like potential generational buying opportunities.

Three of them that stand out are named below.

CSL Ltd (ASX: CSL)

Few companies on the ASX have delivered long-term performance like CSL, but 2025 has been a rough year. The biotech leader is trading around 38% below its 52-week high, weighed down by regulatory uncertainty, slower-than-expected margin recovery at its Behring division, and noise around the planned separation of its Seqirus vaccines arm.

Yet none of these issues change CSL’s core strength. It remains one of the world’s most important plasma-based therapy companies, serving a global patient base and backed by decades of scientific expertise. Demand for immunoglobulins and specialty therapies continues to grow, and the company is investing heavily in US plasma collection to boost long-term supply.

CSL has built a reputation on delivering earnings growth through thick and thin. A discount of this size doesn’t come around often, and for patient investors, it could prove to be a rare opportunity.

TechnologyOne Ltd (ASX: TNE)

Despite delivering resilient recurring revenue growth in FY 2025 and expanding its software-as-a-service customer base, the company’s share price is now 31% below its 52-week peak.

TechnologyOne is one of the most dependable tech businesses in the country. Its software is deeply embedded in universities, councils and government departments, and its transition to a pure SaaS model has driven years of earnings upgrades, stronger margins, and recurring revenue. It has also increased its dividend every year for more than a decade, a rarity for a tech company.

And with management believing that it can double in size every five years, this could present one of the most attractive entry points in years.

Xero Ltd (ASX: XRO)

The market’s renewed nerves around global tech have hit Xero hard, sending the cloud accounting star around 40% below its 52-week high. But while its share price has been volatile, the business itself continues to fire.

Xero now serves 4.59 million subscribers and generates NZ$2.7 billion in annualised monthly recurring revenue.

Its focus on improving margins and lifting operating leverage has strengthened its financial position, while new products and deeper platform integration continue to boost customer lifetime value.

And with an estimated total addressable market (TAM) of 100 million businesses, its future looks very bright. This could make now an opportune time to pick up shares for the long term.

The post Is the 2025 ASX share selloff your chance to buy generational bargains? appeared first on The Motley Fool Australia.

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Back in California’s gold rush in the mid-1800s, thousands of individuals flocked to the region hoping to find gold and strike it rich. However, the easy money was instead made by the suppliers who sold tools to the gold prospectors.

Today, the term “pick-and-shovel investing” honors that legacy. Oftentimes, providers of ancillary products and services achieve greater success than pure-play companies do.

Could this be the case with Nvidia (NASDAQ: NVDA) in the quantum computing market? Maybe so. 

Simulation paves the way for reality

Several companies are racing to develop large-scale quantum computers that can be utilized in a wide range of practical applications. They include tech giants such as Google Quantum AI parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT) as well as rising stars like D-Wave Quantum (NYSE: QBTS) and IonQ (NYSE: IONQ). However, Nvidia isn’t in this group.

That doesn’t mean that Nvidia doesn’t have a vested interest in quantum computing, though. And the chipmaker doesn’t have to wait for quantum computing to fulfill its potential to make money, either.

Researchers must develop simulations of quantum systems to design and test algorithms and circuits. However, access to quantum processing units (QPUs) today is limited and expensive. Nvidia recognized this challenge and offers a solution: Use its graphics processing units (GPUs) on classical computers for quantum simulation.

Nvidia Quantum Cloud supports quantum simulation using the company’s GPUs and its CUDA-Q quantum computing platform. Roughly 75% of organizations deploying QPUs use CUDA-Q.

Three of the four largest cloud service providers have integrated Nvidia Quantum Cloud into their platforms: Microsoft Azure, Google Cloud, and Oracle (NYSE: ORCL) Cloud Infrastructure. The notable exception is Amazon Web Services (AWS). However, AWS allows QPU developers to use Nvidia’s CUDA-Q.

Nvidia’s bridge to the future

Nvidia’s quantum opportunities aren’t limited to simulation. The likelihood is that most practical quantum computers will be hybrid systems that connect QPUs with classical supercomputers for the foreseeable future.

The problem is that qubits (the basic units of information in quantum computers) are notoriously unwieldy, at least for now. Because they’re prone to errors, complex calibration processes and control algorithms are required to keep them on track. Nvidia is addressing this challenge in two ways.

First, the company’s GPUs are ideally suited for powering the supercomputers needed in hybrid quantum-classical systems. Second, Nvidia has developed a low-latency, high-throughput bridge between QPUs and its GPUs called NVQLink.

Nvidia found and CEO Jensen Huang describes NVQLink as “the Rosetta Stone connecting quantum and classical supercomputers.” He recently predicted, “In the near future, every Nvidia GPU scientific supercomputer will be hybrid, tightly coupled with quantum processors to expand what is possible with computing.”

A familiar path

Making money as a pick-and-shovel play in quantum computing should be relatively straightforward for Nvidia. The company has successfully navigated a similar path in artificial intelligence (AI).

OpenAI, Google, and others have developed powerful large language models (LLMs). Many of these companies are also pioneering agentic AI and working on artificial general intelligence (AGI) and AI superintelligence (ASI). Nvidia opted not to compete on their turf. Instead, it’s supporting them with the chips and software tools that make their jobs easier.

In many respects, Nvidia’s strategy in quantum computing mirrors the approach it has taken with AI. With the company generating revenue of $57 billion in the third quarter of 2025 and projecting revenue of $65 billion next quarter, Nvidia’s AI strategy is paying off handsomely. I think supplying the picks and shovels for the quantum computing gold rush will prove to be a winning approach over the long run, too.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Nvidia could be a bigger winner in quantum computing than you might think appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Keith Speights has positions in Alphabet, Amazon, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, IonQ, Microsoft, Nvidia, and Oracle. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you’ve been waiting for the right moment to start investing, then stop! The best time to begin is almost always now.

Not because the market is perfectly priced, it rarely is, but because time in the market does far more for your wealth than trying to pick the perfect entry point.

One of the easiest ways to get started is with exchange-traded funds (ETFs).

They’re low-cost, diversified, beginner-friendly, and designed to grow with the broader market. You don’t need to pick stocks. You don’t need to predict which company will be the next big winner. You just need to get in, stay consistent, and let compounding quietly get to work.

But what does that look like in real numbers? And what could a simple $5,000 investment today grow into over the next decade or two?

Let’s break it down.

Why ETFs make compounding so powerful

When you buy an ASX ETF, you are buying a basket of companies in one shot.

That could be Australia’s top 200 shares through something like an ASX 200 fund, the world’s biggest shares through a global ETF such as the Vanguard MSCI Index International Shares ETF (ASX: VGS) or the iShares S&P 500 ETF (ASX: IVV), or fast-growing themes like technology through options such as the Betashares Nasdaq 100 ETF (ASX: NDQ) or the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC).

Historically, share markets have returned around 8%–10% per year on average. That’s not guaranteed, but over long periods, it has been remarkably consistent despite market crashes, recessions, and geopolitical shocks.

What your $5,000 could grow into over time

If your $5,000 investment returned 10% per year on average, let’s now see what it could turn into over the long term.

After 10 years, that initial $5,000 could grow to around $13,000. It isn’t life-changing yet, but it is already more than double your starting amount — and you didn’t have to do anything other than stay invested.

After 15 years, the same investment could grow to roughly $21,000. At this point, compounding is starting to accelerate, because your returns are now earning returns of their own.

After 20 years, that original $5,000 could be worth around $33,600. That’s more than six times what you started with, all from a single one-off investment and an average long-term return.

And keep in mind, this doesn’t include any additional contributions. Add even small, regular top-ups over time, and those numbers can climb dramatically higher.

For example, starting with $5,000 and adding $100 a month to your portfolio would turn these amounts into $33,000, $61,000, and $106,000, respectively, all else equal.

Foolish takeaway

A one-off $5,000 investment may not seem like much today, but over 10, 15, or 20 years, compounding can transform it into something far more meaningful.

By using simple, broad-based ASX ETFs and giving them enough time to grow, investors can build real wealth without stress, guesswork, or constant tinkering.

And if you can add to it with small monthly investments, you really could supercharge your wealth creation.

The post What $5,000 invested in ASX ETFs today could become in 10, 15, and 20 years appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today 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 Life360, Megaport, and SiteMinder. The Motley Fool Australia has positions in and has recommended Life360 and SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Tech stocks have experienced choppy trading patterns in recent weeks. However, the long-term outlook for top companies in the sector continues to position investors for excellent return potential.

The tech-centric Nasdaq Composite has returned 90% over the last five years, outperforming the S&P 500 and Dow Jones Industrial Average. Artificial intelligence (AI) has been a significant catalyst for the growth of the largest tech companies over the last few years, but it’s just getting started.

The following AI stocks are excellent options to profit from the growth of this revolutionary technology. 

1. Advanced Micro Devices

Leading tech companies will continue to invest in advanced computing hardware until AI surpasses human intelligence. That’s where the world is heading. The stakes are enormous, but to achieve this, these companies will need significantly more computing power. This is why investors should consider investing in Advanced Micro Devices (NASDAQ: AMD).

AMD has navigated through a slump in its growth over the past few years, but the investments it has made to catch up in the AI chip market are starting to pay off. Revenue grew 36% year over year in the third quarter, reaching $9.2 billion. It also reported a 30% year-over-year increase in adjusted earnings per share and record free cash flow, demonstrating how AMD is profitably scaling its business.

It’s just getting started. The company is driving this accelerating growth by offering a superior cost-performance balance compared to competing chips. Its fifth-generation Epyc central processing units (CPUs) for servers continue to gain market share on Intel, while its MI300 series of graphics processing units (GPUs) are valued for their efficiency in handling AI inference workloads.

The launch of the MI450 GPU next year is expected to drive record revenue. OpenAI is slated to purchase a large cluster of MI450s in the second half of 2026. This is part of a long-term agreement that will make AMD a key strategic partner for the owner of ChatGPT.

These deals indicate further growth for AMD that could deliver substantial returns for investors. Analysts are currently projecting annualized free-cash-flow growth of 66% through 2029. This is why the stock rocketed to new highs and could offer significant upside.

2. Meta Platforms

Meta Platforms (NASDAQ: META) has over 3.5 billion people using its services daily, with more than 3 billion on Instagram alone. Meta is making these services even more profitable and engaging for users by leveraging AI. With substantial resources to expand its data center capacity, Meta is building an unstoppable competitive advantage around its tech infrastructure.

Its third-quarter financial results were outstanding, with revenue up 26% year over year. Its ad revenue is generating a significant operating margin of 43% on a trailing-12-month basis, contributing to $44 billion in free cash flow.

Meta has made improvements to its ad technology, where AI is driving better efficiency and more relevant ads shown to users. AI-driven ad tools are generating over $60 billion annually, accounting for approximately a third of the company’s total revenue.

The stock is down 20% since the third-quarter earnings report, primarily due to the company’s plan to accelerate capital spending over the next year. This is expected to put pressure on margins and profits. However, the additional GPUs and compute capacity will further expand its AI capabilities, potentially leading to lucrative opportunities to generate more profits in the future.

These investments will strengthen Meta’s long-term competitive moat and potentially lead to the development of new AI-driven services. There is considerable long-term upside for Meta that is not fully reflected in its current valuation. The stock is trading at just 20 times 2026 earnings estimates, which appears to be a bargain for a leading tech company.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 artificial intelligence (AI) stocks to buy before the end of 2025 appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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John Ballard has positions in Advanced Micro Devices. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices, Intel, and Meta Platforms. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: short November 2025 $21 puts on Intel. The Motley Fool Australia has recommended Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) are two ASX 200 blue-chip shares that can be found in the portfolios of many a dividend investor in Australia.

Income seekers like the sturdy business models that both of these companies offer, thanks to their defensive nature as consumer staples providers. Both Coles and Woolworths are established and highly profitable, which gives both stocks a durable earnings base from which to fund what have historically been reliable passive income to shareholders.

Saying all of that, both Coles and Woolworths shares have been through some dramatic changes over the past 12 months. One at the expense of the other, as it happens.

Today, let’s review both stocks’ dividends and determine which one appears to be the better buy for income investors at present.

Coles vs. Woolworths shares: Which is the better dividend stock?

Well, let’s start with the payouts.

Coles sent out its normal two dividends in 2025. The first came in March, the interim dividend worth 37 cents per share. The second was the final dividend from September, worth 32 cents per share. Both payments came fully franked, as is typical for Coles. Together, the payments represent a payout ratio of 85.4% of earnings.

Coles’ 2025 dividends came in ahead of 2024’s payout. Although the final dividend was flat year on year, the interim dividend was boosted by one cent compared to 2024’s equivalent payout of 36 cents per share.

Today, these 2025 dividends give Coles a trailing dividend yield of 3.06%.

In 2025, Woolworths also doled out two dividends, as is the company’s habit. The first was the April interim dividend worth 39 cents per share. The second, the final dividend from September worth 45 cents per share. Both payments came fully franked and represented a payout ratio of 74.1% of earnings.

Unlike Coles’ payouts, though, these dividends from Woolworths shares represented significant reductions over the income shareholders banked in 2024. That consisted of an interim dividend of 47 cents per share and a final dividend worth 57 cents per share. There was also a special dividend of 40 cents per share paid out. However, that was funded from the one-off sale of Woolworths’ last 5% stake in Endeavour Group Ltd (ASX: EDV), so it isn’t worth including.

Today, Woolworths’ stock is trading on a dividend yield of 2.97%.

Foolish Takeaway

If I had to choose between Coles and Woolworths shares for dividend income today, I would probably opt for Coles. Not just because it offers a slightly higher yield, though. Woolworths is currently in a bit of a funk, evident from its recent share price trajectory. The company’s management is facing questions about the direction it is taking, and it has been steadily losing market share to Coles in recent quarters. Its Big W division also continues to weigh on its overall strength.

Meanwhile, Coles has a far better track record of delivering consistent dividends in recent years, despite its higher payout ratio. As such, it would be my pick of the two right now.

The post Best buy for dividends today: Coles or Woolworths shares? appeared first on The Motley Fool Australia.

More reading

• What’s driving a 9% divergence in ASX 200 consumer staples vs. discretionary shares?
• Should you buy Woolworths and these ASX dividend shares?
• Why did the ASX 200 dive to a near six-month low last week?
• 2 of the best ASX dividend shares to buy for dependable passive income
• Age Pension worries? 7 income stocks to consider for retirement

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

There are a lot of options out there for income investors to choose from on the Australian share market.

To narrow things down, let’s take a look at three ASX dividend stocks that brokers have named as buys. Here’s what they are saying about them:

Centuria Industrial REIT (ASX: CIP)

Centuria Industrial REIT could be an ASX dividend stock to buy.

It is one of Australia’s leading owners of industrial real estate with a portfolio including major distribution hubs that are leased to blue-chip tenants in e-commerce, manufacturing, and logistics.

Management notes that its portfolio includes 87 high-quality, fit-for-purpose industrial assets worth a collective $3.89 billion. These assets are situated in key in-fill locations and close to key infrastructure.

Although rising interest rates have pressured the broader property sector in recent times, Centuria Industrial REIT’s long-term leases and stable rental income leave it well placed for the future.

For example, UBS believes the company is now positioned to pay dividends per share of 16.8 cents in FY 2026 and then 17.9 cents in FY 2027. Based on its current share price of $3.41, this equates to dividend yields of 4.9% and 5.25%, respectively.

The broker currently has a buy rating and $3.95 price target on its shares.

Transurban Group (ASX: TCL)

Another ASX dividend stock that could be a buy according to analysts is Transurban.

It is the toll road operator behind CityLink in Melbourne and WestConnex in Sydney, as well as many other important roads across Australia and North America. It also has a development pipeline that looks set to support its long term growth.

The team at Citi believes the company is well-placed to pay dividends of 69.9 cents in FY 2026 and 74.1 cents in FY 2027. Based on its current share price of $14.82, this would mean dividend yields of 4.7% and 5%, respectively.

Citi has a buy rating and $16.10 price target on Transurban’s shares.

Universal Store Holdings Ltd (ASX: UNI)

Finally, youth fashion retailer Universal Store has been quietly delivering for shareholders despite a challenging retail environment.

Bell Potter believes this trend can continue thanks to its multi-brand strategy across Universal Store, Thrills, and Perfect Stranger and growing private-label penetration.

The broker expects this to support fully franked dividends of 37.3 cents per share in FY 2026 and 41.4 cents per share in FY 2027. Based on the current share price of $8.24, this implies yields of 4.5% and 5%, respectively.

Bell Potter has a buy rating and $10.50 price target on its shares.

The post These top ASX dividend stocks offer 5% yields appeared first on The Motley Fool Australia.

More reading

• What’s driving a 9% divergence in ASX 200 consumer staples vs. discretionary shares?
• 2 of the best ASX dividend shares to buy for dependable passive income
• Age Pension worries? 7 income stocks to consider for retirement
• How to make $50,000 of passive income a year from ASX shares
• Buy these ASX dividend shares for 4% to 7% yields

Motley Fool contributor James Mickleboro has positions in Universal Store. 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 Transurban Group. 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.