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"Price is what you pay. Value is what you get."
— Warren Buffett
Published
As we wind down towards the end of the 2026 calendar year, I've started thinking about what ASX shares I'd like to have in my portfolio next year.
There are plenty of options available, and I started out with a watchlist of around 50 shares.
But I'm not looking to fill my portfolio with as many shares as possible, I want to find a small handful of ASX shares that I can genuinely see myself investing in.
I'm after three different things: a share with good growth potential, one that can offer some protection against inflation, and another that can generate a steady and reliable passive income.
So I worked through my 50 candidates to find which ones fit the bill, and only three made the cut.
For growth potential, I like the look of Deep Yellow shares.
The uranium shares have been smashed by several strong headwinds this year, including rising bond yields, higher interest rates, and an investor rotation away from growth stocks during times of volatility. The stock has fallen around 70% from a multi-year high in January to the time of writing.
And there are risks ahead too. The company recently announced it has delayed construction at its Tumas project because current equity market conditions don't support raising the capital it needs.
The problem is that uranium developers like Deep Yellow need upfront capital, and it takes several years to become profitable. That's difficult in the current market.
But I see some strong potential ahead for Deep Yellow.
The uranium price has climbed 17% higher over the past year, to around US$91 per pound at the time of writing. And it's tipped to keep going.
Uranium has seen a surge in demand as countries transition to green energy. Nuclear power plants don't produce carbon dioxide emissions when they generate electricity, so they're fast becoming a popular option.
The Federal Department of Industry, Science and Resources forecasts in its September quarter report on the 1st of October for the uranium price to climb to around US$93 per pound in FY27, and as high as US$113 per pound by FY31. That's around a 24% increase from the latest trading price.
If uranium prices do keep climbing higher, Deep Yellow is well-placed to benefit.
The uranium development company has two advanced projects. Its flagship project is Tumas in Namibia, and it is also in a pre-construction and study phase at its Mulga Rock project in Western Australia. The site is one of the largest undeveloped uranium projects in Australia.
Aside from its two key projects, the company is also undertaking drilling programs at its Alligator River Project in the Northern Territory, and its Omahola Project in Namibia.
Once the projects are active, Deep Yellow expects annual production to be over 7 million pounds. It also has a longer-term company strategy aiming for over 10 million pounds per annum.
The World Nuclear Association estimates that global reactor demand was roughly 180 million pounds in 2025. Meanwhile, the US Geological Survey's 2026 Fact Sheet puts global mine production at around 161.7 million pounds.
That leaves a gap of around 18 million pounds between supply and demand.
If Deep Yellow successfully brings both projects online to hit its 7.1 million pounds combined target, its output could close roughly 39% of the world's supply gap.
That would allow Deep Yellow to command a valuation multiple times higher than its current size.
For inflation protection, APA shares are my top pick.
The ASX shares have steadily climbed higher this year following the company's strong FY26 earnings result, successful cost-cutting implementation, a growing pipeline, and expanding profit margins.
The continued upward momentum of APA shares faces execution risks from its capital-heavy $3.5 billion growth pipeline and headwinds from higher inflation and interest rates.
But I think a lot of the risk is offset by its market dominance, growing pipeline, strong financial results, and inflation-linked cash flow.
APA has a near-monopoly over Australia's energy infrastructure sector. The company delivers around half of the nation's domestic gas through more than 15,000 kilometres of gas pipelines that it owns, operates, and maintains.
The company is also continually working to scale its business further. Its organic pipeline sits at around $3.5 billion, driven by major gas grid expansions, Victorian pipeline upgrades, and other power generation projects designed to address Australia's energy shortfalls through FY27 to FY29.
The company is financially sound too. APA reported an 8.3% increase in underlying EBITDA, to $2.183 billion, as part of its FY26 results in August. This surpassed prior guidance.
It also announced a 3.2% increase in its free cash flow and a 1.9% uplift in statutory revenue (excluding pass-through). Statutory net profit also jumped 81.4%.
And the company is expecting growth to continue. For FY27, APA is guiding a higher underlying EBITDA of between $2.26 billion and $2.34 billion.
But what makes the ASX shares stand out for me is that a large majority of APA's revenue is derived from long-term contracted infrastructure assets which are linked to inflation.
Energy retailers and industrial users pay for reserved pipeline capacity. APA is able to raise those tariffs each year, based on inflation.
In its latest FY26 report, APA highlighted that its underlying EBITDA margin was driven by inflation-linked tariff increases, alongside cost-reduction initiatives.
It also noted that around 86% of its revenue comes from take-or-pay contracts or regulated revenue.
This gives the business steady and growing revenue with a long-term outlook, and provides its shareholders with inflation protection.
Washington H. Soul Pattinson and Co Ltd (ASX: SOL)
For passive income, Soul Patts came out on top.
Soul Patts is an Australian diversified investment house that invests in a huge range of assets. They include private, public, fixed income, and real assets, spread across a wide range of industries from energy, to financial services, and even agriculture. It also invests in all asset classes and all areas of a company's capital structure.
Soul Patts is also heavily value-orientated. The company explicitly targets businesses capable of long-term compounding. It also focuses on investments where the price paid is justified by the company's underlying quality, cash flows, and long-term prospects.
And its broad portfolio gives its shareholders a hugely diversified portfolio, which also helps offset risk in more volatile markets.
The best part is the ASX shares are widely regarded as Australian dividend royalty. The investment house has a long-standing reputation of paying regular dividends to its shareholders over several decades.
And the dividend per share payment has increased every year since 1998.
Soul Patts historically pays its fully-franked dividends twice per year. It pays an interim dividend in May and a final dividend in December. The ASX dividend stock occasionally also pays shareholders an additional special dividend.
For the first half of FY26, Soul Patts paid a fully-franked interim dividend of 48 cents per share. The payout represented a 9.1% increase on the prior corresponding period.
Then, as part of its FY26 result in September, the company announced another 63 cents per share dividend for the second half of the financial year. This was 6.8% higher from the year prior.
The total $1.11 FY26 annual dividend is 7.8% higher than FY25. This translates to a dividend yield of around 2.3% at the time of writing.
That's not a record-breaking dividend payout. And past dividend growth isn't a reliable indicator of future dividend growth. But for a consistent and reliable passive income which stands the test of time, I can't see a better option.
