Orica shares have soared 40% this year on record profit. Can they keep going?

Expectations are high, but this growth story could still have legs.

| More on:
A young man punches the air in delight as he reacts to great news on his mobile phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Record profit: Orica reported its highest earnings in 13 years.
  • Shareholder returns ramping up: The company lifted its full-year dividend by 21% to 57 cents per share and expanded its share buy-back program to $500 million.
  • Brokers stay positive: RBC and Jefferies both highlighted favourable market conditions, earnings momentum, a strong Orica’s balance sheet and capital discipline as factors that reinforce the long-term outlook.

Orica Ltd (ASX: ORI) has been one of 2025's quiet outperformers. The stock has climbed roughly 40% this year, outpacing both the ASX 200 and many of its peers.

The mining services company capped off that rally this week with its highest profit in 13 years, reporting EBIT of $992 million and strong growth across all segments.

But with the result broadly in line with what the market had been expecting, the share price has risen just 1.18% today (as of the time of writing).

So, can this newly revitalised ASX 200 stock keep going?

Brokers were already bullish heading in

The record FY25 result largely validated the optimism shown by analysts heading into the announcement. Both Jefferies and RBC Capital Markets had flagged strong momentum in Orica's key markets, underpinned by higher explosives demand, strong gold and copper exposure, and improved industry discipline.

Jefferies, which has a Buy rating on Orica shares, highlighted that Orica's turnaround is still in its early stages, with sustainable double-digit EPS growth achievable over the next three years.

RBC Capital Markets also shared an optimistic view highlighting favourable macro conditions and the growing contribution from Orica's Digital Solutions and Specialty Chemicals businesses.

Both brokers pointed to Orica's strengthened balance sheet and renewed capital management discipline as favourable themes and that was clearly evident again in today's report.

More dividends and share buy-backs

Orica has rewarded shareholders with a final dividend of 32 cents per share, taking the full-year payout to 57 cents, up 21% from last year's 47 cents. That's the highest annual dividend since 2012 and a sign that management is confident in the company's cash generation and outlook.

Management also increased the ongoing share buy-back program by $100m, bringing the total value of the program to $500m.

Based on today's share price of $23.06, the dividend represents a trailing yield of roughly 2.5%, which, when combined with Orica's ongoing share buy-back, highlights its renewed commitment to shareholder returns.

The dividend payout ratio sits at around 50% of underlying earnings, leaving room for future increases if profit momentum continues in FY26 and beyond.

The bottom line

After rallying 40% in 2025, Orica's strong FY25 performance shows a business that's delivering on promises.

With momentum in its core operations, rising dividends, and capital management driving returns, Orica has transformed from a turnaround story into a steady-growth industrial compounder.

Motley Fool contributor Kevin Gandiya has no positions 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.

More on Share Market News

Two workers at an oil rig discuss operations.
Broker Notes

Should you buy Santos, Beach Energy or Woodside shares? Here's Macquarie's top pick

Macquarie has released its new share price expectations for Santos, Beach Energy and Woodside shares.

Read more »

A green fully charged battery symbol surrounded by green charge lights representing the surging Vulcan share price today
Share Market News

Up 300% in 6 months! This soaring ASX lithium stock just took a major step to production

Marching forward.

Read more »

An old-fashioned panel of judges each holding a card with the number 10
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy end to the trading week this Friday.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Share Market News

Macquarie says this top ASX tech stock could rise 15%

Let's see what the broker is saying about this stock.

Read more »

Excited couple celebrating success while looking at smartphone.
Healthcare Shares

Up 680% since July, here's why 2025 was a breakout year for this hot ASX stock

With consistent contract wins, FDA clearance, and backing from Pro Medicus, 4D Medical is showing that there is a commercial…

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Collins Foods, Monash IVF, Premier Investments, and Step One shares are tumbling today

These shares are ending the week in the red. But why?

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Share Gainers

4 ASX 200 stocks smashing the benchmark this week

Investors have been piling into these four ASX 200 stocks this week. Let’s see why.

Read more »