QBE Insurance Group Ltd (ASX: QBE) shares are a popular option for income investors.
But would they be a good pick if you were looking to generate passive income in 2026? Let's see what one leading broker is saying.
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Are QBE shares a buy for passive income in 2026?
According to a note out of Bell Potter, its analysts think that investors should be waiting for a better entry point.
Ahead of the release of its quarterly update this week, a note reveals that the broker has put a hold rating and $21.20 price target on its shares.
Based on its current share price of $19.74, this implies potential upside of 7.4% for investors over the next 12 months.
Commenting on its expectations for this week's update, the broker said:
The Q3 update is due on 27 Nov. The quarterly statements usually cover written premium, rating changes, catastrophe claims, and investment returns, as well as the outlook and expectations. We anticipate a relatively benign quarter. Short bond yields have been stable, but H1 saw strong returns on risk assets.
Premium rate increases remain positive but have been slowing (Q2 rates were +0.8% vs pcp) and we will be watching whether these have flattened out or continued to soften. Inflation remains present and this may be storing up problems for the combined ratio (COR), so there will be a focus on whether the company continues to expect a COR of ~92.5%.
But what about passive income?
The broker estimates to QBE's shares will provide investors with dividend yields of 4.8% in FY 2025 and then 4.7% in FY 2026.
That would turn a $10,000 investment into passive income of approximately $480 and $470, respectively.
Commenting on its hold recommendation, Bell Potter said:
At the half year results, we felt the company could be seen to be growing into a softening environment. With a PCA capital ratio of 1.81 (after interim dividend), the company's capital is at the top of its target range (1.6-1.8x). This capital is being valued by the equity market at a premium to book value and the company is looking for ways to utilise its capital and grow into attractive areas.
We have not changed our assumptions and any change to our forecasts is driven by changing fx rates (we use spot rates as a forecast). We will review our forecasts post the Q3 update, noting the upside with the shares below $20/sh. For now, we maintain our target price at $21.20/sh and keep our HOLD recommendation.
