Westpac Banking Corp (ASX: WBC) has been a strong performer over the past 12 months, comfortably outpacing the broader market.
Its steady dividends and strong market position appears to have made it a favourite among income-focused investors.
But with the banking giant's shares closing in on record highs, the upside from here may be limited.
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Westpac: running out of steam?
Westpac shares were fetching $37.91 at today's close, just shy of their all-time high. While that's good news for long-term holders, it means there may be less opportunity for new investors to enjoy further capital gains.
Even the most bullish broker, UBS, only has a neutral rating on Westpac with a $38.00 price target. That's a few cents above its current level — hardly an exciting outlook.
Another factor is dividends. While Westpac has long been prized for its income stream, today's elevated share price has brought its dividend yield down from the generous levels seen in previous years.
All up, while Westpac remains a solid option for those seeking stability, the scope for meaningful upside looks slim.
Buy this ASX stock
For investors looking for more potential, Goodman Group (ASX: GMG) could be a better place to turn.
Goodman is one of the world's leading industrial property groups, with a portfolio that includes warehouses, logistics hubs, and data centre developments. These assets are in hot demand as e-commerce continues to grow and companies require modern facilities to store, distribute, and manage goods efficiently.
In addition, Goodman has been ramping up its exposure to data centres — a sector benefiting from soaring demand for cloud computing and artificial intelligence. With a pipeline of projects tied to these structural growth trends, the company is well placed to deliver long-term earnings expansion.
Its shares last traded at $33.19, and brokers see plenty of room for growth from here.
Bell Potter, for example, has a buy rating and $40.75 price target on Goodman shares. That implies a potential upside of approximately 23%, which is a stark contrast to Westpac's near-zero forecast.
Commenting on the ASX stock, the broker said:
GMG is into it and on with it as its investment phase for its DC build-out program gathers pace, with early phase of recognition starting to work through, evidenced in YoC which climbed to 7.5% (was 6.7%) weighted up by return size and dollar quantum of fully fitted DCs which was a notable step change intra-period. We expect to see some volatility in the SP next 6-12mths with milestones on foot more important for longer-term gains.
