At current lower prices, these reliable ASX dividend shares may deserve a closer look.

Santos

Let's start with the biggest name of the two. The price of this ASX dividend share has been volatile, sentiment has swung back and forth, and energy markets have kept everyone guessing.

But look past the noise, and a different picture emerges.

Santos is entering a critical growth and cash-flow phase. After years of heavy capital spending, the company is finally on the verge of reaping the rewards. Last Thursday, the ASX dividend stock revealed sales revenue for the fourth quarter was $1.2 billion. That's a gain of 9% on the prior quarter, bringing the full-year result to more than $4.9 billion.

Santos' real edge lies in its scale and high-quality asset base. The $20 billion ASX share owns long-life LNG and gas assets across Australia and Papua New Guinea, giving it a durable production platform.

Even better, major growth projects — including Barossa and Pikka — are nearing completion and are expected to materially lift output over the coming years. As these projects transition from construction to production, Santos should see a sharp uplift in free cash flow.

On Thursday, Santos showed early signs of that, with cash flow being up 30% on the prior quarter to about $380 million. This also brought cash flow for the full year to about $1.8 billion.

That's a big deal. Stronger cash generation gives management more flexibility to repair the balance sheet, reduce debt, and return more capital to shareholders.

That's great news for income investors. The ASX dividend share runs a flexible, cash-flow-linked dividend policy. It returns a significant portion of free cash flow when conditions allow rather than locking itself into an unsustainable payout. That can mean dividends fluctuate year to year, but at current prices, the forecast yield of 5.67% looks compelling.

Brokers appear to agree. Most analysts rate Santos a buy, with an average 12-month price target of $7.24. From the current share price of $6.46, that implies around 12% upside — before dividends are even counted.

Metcash

This ASX dividend share isn't the kind of stock that sets your group chat on fire. But what it does offer is something many investors quietly crave: reliable income from a rock-solid business .

Metcash is the backbone behind IGA supermarkets, Mitre 10, Home Timber & Hardware, plus a huge network of independent liquor and foodservice retailers. In other words, this ASX dividend share sits right in the middle of everyday essentials — food, hardware, and booze. The kind of stuff people keep buying even when budgets tighten.

Sure, competition is fierce, and margins are always under pressure. And no, this isn't a dividend stock you buy expecting explosive growth.

Metcash has earned a reputation as a dependable dividend payer, and with the share price still sitting at fairly modest levels, the 5.4% yield looks especially attractive right now.

Better still, UBS expects the company to lift its dividend every year from FY25 through to FY29. For passive income investors, that's exactly the kind of forecast you want to see. In early December, Metcash confirmed its latest dividend will be 8.5 cents per share and will be fully franked.

Most analysts see moderate to strong upside for the ASX dividend share, with the average 12-month price target sitting at $3.97. That implies a potential 19.5% share price gain from current levels.

Add dividends to the mix, and total returns could approach 25% over the next year.

The post Snap up these 2 ASX dividend shares for income and growth appeared first on The Motley Fool Australia.

Electro Optic Systems Holdings Ltd (ASX: EOS) 

EOS shares are catching headlines this week. At the close of the ASX on Thursday afternoon, the stock was 1.21% lower for the day at $9.90 a piece. But the dip has barely dented the electro-optic tech developer and producer's huge annual gains. 

At the time of writing, the shares are 723.53% higher than this time last year.

This year, the business is well-placed to capture surging demand for defence stocks as global military spending hits all-time highs. And it already won some impressive contracts over the past 12 months.

Xero Ltd (ASX: XRO)

Xero shares slumped 4.12% to $103.16 at the close of the ASX on Thursday. And the stock is still 37.7% below its trading levels from this time last year after facing a number of headwinds and loss of investor confidence throughout 2025.

But I think the investor sell-off last year was unwarranted and overdone. The business looks to be stable and poised for an uptick in business growth this year. It's actively expanding and investing in new revenue streams.

I think Xero shares have the potential to double in value this year.

CSL Ltd (ASX: CSL)

I still have my eye on the ASX-listed global biotechnology company's shares. Like Xero, the business suffered several strong headwinds in 2025 that sent its shares spiralling.

But now, CSL is well-positioned for a boom in demand. The company is entering a key investment phase, which could help boost its financials, and I'd expect demand for its products and investor confidence to follow suit.

Metcash Ltd (ASX: MTS)

Metcash, a wholesale distribution and marketing company specialising in food, liquor, and hardware, suffered a 15% share price crash in late November following its subdued FY26 half-year results. But analysts seem confident the business can turn it around in 2026.

Unlike the stocks I've listed above, I don't think we'll see explosive numbers out of this ASX company's shares in 2026, but I do think we'll see consistent growth over the next 12 months, which will outpace the likes of supermarket giants Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

The post 4 ASX shares I'd buy with $10,000 today appeared first on The Motley Fool Australia.

The Coles share price spiked in late August and early September on the back of a robust FY25 result. It also posted a strong quarterly update in late October, where it reported a 3.9% increase in group sales and quarterly results generally in line with analyst expectations. 

Overall, Coles was a strong performer in 2025, and it appears that its growth strategy has paid off. But the business continues to face headwinds from resilient inflation and cost-of-living pressures in Australia.

Consumers are being forced to cut back on discretionary items, and even Coles' executives have noted that shoppers are visiting more stores and being more selective. And this could be problematic for business growth in 2026.

Analysts are mostly bullish about the outlook for Coles shares in 2026. TradingView data shows that 10 out of 16 analysts have a buy or strong buy rating on the stock with a maximum 12-month target price of $26.60. That implies that Coles shares could jump another 23.55% this year, at the time of writing.

The company's growth and anticipated share price increases are attractive, but I have my eye on another roaring ASX retailer, which I think is an even better buy for growth this year.

Another ASX retailer set to rocket in 2026

Metcash Ltd (ASX: MTS) is a wholesale distribution and marketing company that specialises in food, liquor, and hardware. Unlike the supermarket giant, Coles, Metcash supplies and supports independent retailers in Australia.

For example, its supermarket segment supplies more than 1600 stores, including the IGA and Foodland brands. Meanwhile, its liquor operations supply more than 90% of independently owned bottle shops, including the Bottle-O and Cellarbrations brands, as well as pubs. 

Metcash's hardware division is the second-largest supplier in Australia, servicing more than 700 Mitre 10, Home Timber & Hardware, and Total Tools stores across metropolitan and regional Australia. 

At the close of the ASX on Monday afternoon, Metcash shares were down 0.30% to $3.30 each. Over the past six months, the retailer's shares have declined 17.91%, but they remain 7.14% above their level at this time last year.

Metcash shares suffered a huge 15% crash in late November following the company's FY26 half-year results, but analysts seem to be confident that the business can turn it around for 2026.

Metcash is a fantastic defensive asset, and while I don't think we'll see explosive numbers this year, I do think we'll see consistent growth over the next 12 months, which will outpace the likes of Coles.

TradingView data shows that 9 out of 13 analysts have a buy or strong buy rating on Metcash shares, with a maximum target price of $4.70. That implies the shares could increase by 42.42% from the current share price.

The post Forget Coles shares, I'd buy this roaring retailer instead appeared first on The Motley Fool Australia.

Sonic Healthcare Ltd (ASX: SHL) and Metcash Ltd (ASX: MTS) both offer an attractive dividend yield, trade at prices that still leave room for upside, and operate in businesses that rarely excite the market.

It's the kind of boring reliability that income investors tend to love.

Here's why.

Sonic Healthcare Ltd (ASX: SHL)

If you want to kick off 2026 without breaking a sweat, Sonic Healthcare might be the quiet achiever you're looking for. No hype, no heroics, just a dependable healthcare heavyweight getting back into shape.

Sonic does the dull-but-deadly stuff: pathology and diagnostic imaging. Blood tests, scans and biopsies aren't glamorous, but essential. And essential businesses tend to keep the lights on regardless of what markets are doing.

After a pandemic-fuelled sugar rush, Sonic's share price came back to earth as COVID testing revenue faded and costs crept up. Investors lost interest. That's exactly why this ASX dividend stock is worth another look. Expectations are now realistic, maybe even a little too low.

The long-term tailwinds haven't gone anywhere. Ageing populations, rising chronic disease and more preventative testing all mean one thing: more samples through Sonic's labs. You don't postpone medical tests when times get tough.

Sure, risks remain. Government funding pressure and wage inflation won't disappear overnight.

According to Bell Potter, the ASX dividend share is a good choice for passive income. The broker forecasts dividends of $1.09 per share in FY 2026 and $1.11 in FY 2027. With Sonic shares currently at $22.61, this would result in a dividend yield of 4.8% and 4.9%.

The broker has assigned a buy rating and a $33.30 price target to the ASX dividend share. Based on the share price at the time of writing, this implies a potential upside of 32% for investors over the next 12 months.

Bell Potter is on the bullish side, as the average 12-month target price is $26.73. However, that still points to 18% upside, and could bring the total gain in 2026 to well over 20%.

Metcash Ltd (ASX: MTS)

Metcash won't light up your group chat either. No, it's just a solid business quietly getting on with it.

Metcash is the engine room behind IGA supermarkets, Mitre 10, Home Timber & Hardware and a swathe of independent liquor and foodservice retailers.

The big attraction? The dividend. Metcash has built a reputation as a dependable payer, and with the share price sitting at relatively modest levels, the yield of 5.3% looks especially tempting.

Operationally, the ASX dividend share does defensive well. Groceries, hardware and booze don't go out of fashion, even when households tighten their belts. Long-standing relationships with independent retailers create sticky revenue, while diversification across business segments helps smooth out bumps.

The catch? Don't expect fireworks. Growth is steady rather than spectacular, competition is fierce and margins are always under pressure.

UBS projects the ASX dividend share to increase its payout every year between FY25 to FY29. That could be great news for investors focused on passive income.

Early December, the company highlighted that its latest dividend will be worth 8.5 cents per share. It will come fully franked, as the payouts from Metcash tend to do.

Most analysts also predict moderate to strong upside. The average 12-months price target has been set at $3.93, which suggests a share price gain of 19%. That could lift total Metcash earnings, including dividends, close to the 25% mark.  

The post Snap up these reliable ASX dividend shares for income and upside appeared first on The Motley Fool Australia.

Xero Ltd (ASX: XRO)

Xero shares closed 0.017% lower on Monday, at $115.62 a piece.

Investors have reacted cautiously to the company's latest FY26 interim results in November. And they're still recovering from news of Xero's US$2.5 billion acquisition of US-based Melio in July. 

But analysts think investors have overreacted. Macquarie previously said it thinks the market has it wrong on Xero shares. It said that its newly acquired Melio business is performing on track. Meanwhile, the team at UBS have said it is positive on Xero's medium term growth outlook and believes the current share price is an "attractive buying opportunity".

TradingView data shows analysts are very bullish on the stock. The maximum target price is $229.73 which implies the shares could jump 98.7% in 2026.

Droneshield Ltd (ASX: DRO)

Droneshield shares jumped 7.91% higher at the close of the ASX on Monday, at $3.00 a piece. For the year to date they've surged 300%!

The AI drone operator has captured investor attention this week after it released an update on its governance review.

Its shares have been under considerable pressure. From its US CEO resignation to employee share sell-offs and even an accidental ASX release, Droneshield shares have attracted a lot of not-so-positive attention. 

But it looks like the tide is about to turn. Analysts have a strong buy rating on the ASX stock and think they could climb up to $5.00 a piece. That's a 66.7 potential upside at the time of writing.

Lynas Rare Earths Ltd (ASX: LYC)

Lynas shares closed 2.38% higher on Monday at $12.84 a piece. Over 2025 the shares have jumped 91.12%

Shares in the miner have soared this year and have ridden the wave of booming demand for rare earths materials. But a new agreement between the US and China to ease tariffs and postpone export controls for a year dampened the share price in November. The deal helped alleviate fears of supply chain disruptions, an issue that had previously driven the Lynas valuation sky-high. 

Going forward, analysts are divided about the stock. TradingView data shows 7 out of 16 analysts have a buy or strong buy rating on the shares. The maximum target price is $29.50, and if this comes to fruition, this implies the shares could jump 136.38% higher in 2026.

Lendlease Group (ASX: LLC)

Lendlease unveiled a binding agreement to sell a 40% interest in The Exchange TRX retail mall and full 60% interest in the adjacent office tower for ~$400 million on Monday, which caused a share price spike.

At the close of the ASX on Monday the shares were 1.4% higher at $5.06 a piece. However over 2025 the shares have dropped 18.91%.

It's been an uncertain year for the development and construction business but it looks like the ASX company is turning a corner for 2026. It has a strong development pipeline, capital recycling initiatives in place, and plans for cost savings.

Analysts mostly have a buy rating on the stock and think they could climb up to $6.74 a piece. At the time of writing that implies a 33.2% upside for the ASX stock in 2026.

Metcash Ltd (ASX: MTS)

Metcash shares ended 0.61% higher on Monday afternoon, at $3.30 each. For the year so far the shares are 5.42% higher, and they look set to climb much higher.

The shares have suffered a huge 15% crash over the past month after investors were unimpressed with its FY26 half year result.

Analysts are confident the business can turn it around for 2026 though. Most have a buy rating on the stock and the maximum target price is $4.70. This implies the shares could climb as high as 42.425 over in 2026

The post 5 magnificent ASX stocks that can make you richer in 2026 appeared first on The Motley Fool Australia.

To narrow things down, let's take a look at three popular shares and see if analysts think they are buys, holds, or sells. Here's what they are saying:

Develop Global Ltd (ASX: DVP)

The team at Bell Potter is positive on this mining and mining services company. In response to news of an underground mining contract from OceanaGold, the broker has retained its buy rating with an improved price target of $5.20.

The broker also likes the company due to its Woodlawn project, which it believes could drive a re-rating of its shares. It said:

DVP enters an important phase of its Woodlawn commercialisation journey with commissioning to be completed in the March 2026 quarter. We expect demonstration of earnings and FCF expansion from Woodlawn to drive a re-rate for DVP; spot copper, zinc and silver prices are currently ahead of our FY26 forecasts, presenting upside to valuation and earnings expectations the longer they remain ahead of forecasts. Near-term catalysts include Sulphur Springs financing completion and processing plant construction commencement and further external DMS contract wins.

Metcash Ltd (ASX: MTS)

This wholesale distributor recently released its half year result for FY 2026. While Ord Minnett wasn't overly impressed with the performance of its hardware and liquor divisions, it remains positive on valuation grounds. It has a buy rating and $4.00 price target on the company's shares. The broker said:

Metcash posted first-half FY26 earnings short of market expectations, driven partly by the earlier recognition of restructuring costs than consensus had forecast. The key food business met forecasts, but the hardware and liquor divisions fell short of expectations. […] Post the result, we have cut our EPS estimates by 8.0%, 9.2% and 8.3% for FY26, FY27 and FY28, respectively, primarily due to the challenges facing the liquor and hardware operations. This leads us to cut our target price on Metcash to $4.00 from $4.60, but we maintain our Buy recommendation on valuation grounds.

Treasury Wine Estates Ltd (ASX: TWE)

A recent update from this wine giant disappointed analysts at Morgans. Although the broker was expecting a bad update, it was even weaker than feared.

Given its poor performance in the US, its weakening balance sheet, and high level of earnings uncertainty, the broker rates it as a hold with a $5.25 price target. It said:

As we feared, but even weaker than expected, TWE's trading update meant that consensus estimates were far too high. Its US performance was particularly disappointing given of all the capital spent in recent years. Gearing is now well above TWE's target range and will remain high for the next couple of years. While we made large downgrades to our forecasts only two weeks ago following the goodwill write-down, TWE's new trading update has seen us make another round of material revisions. We stress that earnings uncertainty remains high. It will take time for new management to deliver more acceptable returns and for TWE to rebuild credibility with the market. We maintain a HOLD rating.

The post Buy, hold, sell: Develop Global, Metcash, and Treasury Wine shares appeared first on The Motley Fool Australia.

What Metcash Ltd (ASX: MTS) does offer is something many investors are craving right now: a chunky dividend yield, a modest share price and a business model built to grind on, even when times are tough.

The price of the ASX dividend share took a tumble in the past month with 14% to $3.28 at the time of writing. This year it has lost 5.5%, compared to a 5.7% gain for the S&P/ASX 200 Index (ASX: XJO).

At current levels, Metcash shares look more appealing than exciting — and that's precisely the point.

Dividend drawcard

Metcash sits behind some of Australia's most familiar retail brands. It's the wholesaler powering independent supermarkets under the IGA banner, as well as foodservice businesses, liquor retailers and hardware chains such as Mitre 10 and Home Timber & Hardware.

The biggest drawcard is the dividend. Metcash has built a reputation as a reliable payer, and its dividend yield looks attractive compared with many larger ASX names that have either trimmed payouts or failed to grow them meaningfully.

With the share price sitting at relatively low levels, that yield looks even more compelling at 5.5%. Investors aren't paying up for blue-sky growth — they're being paid to wait. In a market still jittery about interest rates and consumer spending, that steady income stream matters.

Squeezing suppliers, cautious shoppers

Let's be clear, Metcash is not a growth rocket. It operates in fiercely competitive markets, with supermarket giants constantly squeezing suppliers and shoppers watching every dollar. If consumer spending weakens sharply, volumes can come under pressure.

Metcash won't make you rich overnight. But at a low share price, with an appealing dividend yield and solid long-term prospects, it's doing exactly what many ASX investors want right now. The ASX dividend share is paying them reliably while keeping risk in check.

Increasing dividend payouts

UBS projects the ASX dividend share to increase its payout every year between FY25 to FY29. That could be great news for investors focused on passive income.

Early December, the company highlighted that its latest dividend will be worth 8.5 cents per share. It will come fully franked, as the payouts from Metcash tend to do.

This dividend matches last year's interim payout, but it is lower than the 9.5 cents per share final dividend investors enjoyed back in August.

What next for the ASX dividend share?

Most analysts also predict moderate to strong upside from Metcash's current share price with the maximum potential upside at 43%.

The average 12-months price target has been set at $3.93, which suggests a share price gain of almost 20%. That could lift total Metcash earnings, including dividends, past the 25% mark.  

The post Time to buy this ASX dividend share now it's down 14% appeared first on The Motley Fool Australia.

The broker has reinforced its buy ratings on both, while slightly adjusting its price targets. 

Here's what's behind the ratings. 

Metcash Ltd (ASX: MTS)

This ASX 200 stock operates in the consumer staples sector.

It is a wholesale distribution and marketing company specialising in food, liquor, and hardware. The company supplies and supports independent retailers in Australia.

According to Ord Minnett, Metcash posted first-half FY26 earnings short of market expectations, driven partly by the earlier recognition of restructuring costs than consensus had forecast. 

The key food business met forecasts, but the hardware and liquor divisions fell short of expectations.

It also noted that as with Endeavour Group Ltd (ASX: EDV) and Coles Group Ltd (ASX: COL), the liquor market continues to struggle, as the industry faces headwinds from changing consumer attitudes to health and cost of living pressures. 

Liquor EBIT fell 8.4% excluding reconstruction costs, and we highlight the risk of greater promotional intensity from rivals as suppliers battle for market share.

Post the result, Ord Minnett cut EPS estimates by 8.0%, 9.2% and 8.3% for FY26, FY27 and FY28, respectively, primarily due to the challenges facing the liquor and hardware operations. 

This leads us to cut our target price on Metcash to $4.00 from $4.60, but we maintain our Buy recommendation on valuation grounds.

Based on the updated price target of $4.00, this indicates an upside of 23.46% for this ASX 200 stock from its current price. 

BlueScope Steel Ltd (ASX: BSL)

The ASX 200 company is an Australian-based steel manufacturer supplying global markets. 

Spun out of BHP Billiton in 2002, BlueScope produces a range of steel products, systems, and technologies and is one of the world's leading producers of painted and coated steel products.

Ord Minnett said the company recently hosted an investor day, where the company showcased its new electric arc furnace (EAF). 

It seems Ord Minnett has a positive view on this development. 

Ord Minnett views the EAF project as positive, with a boost at the earnings before interest and tax (EBIT) line of $80 million annually targeted for the New Zealand division. Against the $160 million investment from BlueScope, this looks to be an optimal use of funds if the targets can be achieved.

Post the investor day, it left FY26 EPS forecast unchanged. 

However, Ord Minnett raised FY27 and FY28 estimates by 2.4% to incorporate increased earnings from the New Zealand assets.

Our target price on BlueScope increases to $27.50 from $27.00, and we maintain Buy recommendation.

The updated price target of $27.50 indicates an upside of 13.36% from yesterday's closing price. 

The post Two ASX 200 stocks with buy recommendations from Ord Minnett appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

Austal Ltd (ASX: ASB)

The Austal share price is down 1.5% to $6.33. This morning, the shipbuilder revealed that the Foreign Investment Review Board and Federal Treasurer Jim Chalmers have approved an application South Korean giant Hanwha Corporation to increase its direct equity shareholding in Austal from 9.9% to 19.9%. Not everyone is happy with the decision, with the ABC reporting that Japanese officials twice contacted the Department of Defence to raise concerns about the Hanwha bid.

Fenix Resources Ltd (ASX: FEX)

The Fenix Resources share price is down 3.5% to 48.2 cents. This may have been driven by profit taking from some investors after the iron miner's shares jumped on Thursday. That was driven by the release of its three-year production plan. After delivering production of 2.4Mt in FY 2025, it is now aiming to increase this to between 4.2 million and 4.8 million tonnes in FY 2026, 4.7 million and 5.3 million tonnes in FY 2027, and then 5.4 million and 6 million tonnes in FY 2028.

Metcash Ltd (ASX: MTS)

The Metcash share price is down 3% to $3.25. This has been caused by the wholesale distributor's shares going ex-dividend this morning for its latest payout. At the start of the month, Metcash released its half year results and reported a 5.9% decrease in underlying profit after tax to $126.7 million. Nevertheless, the Metcash board elected to maintain its fully franked interim dividend at 8.5 cents per share. Eligible shareholders can look forward to receiving this dividend late next month on 28 January.

Polynovo Ltd (ASX: PNV)

The Polynovo share price is down 1.5% to $1.22. This is despite the medical device company being the subject of a bullish broker note out of Morgans today. According to the note, the broker has upgraded Polynovo's shares to a buy rating with a $2.03 price target. This implies potential upside of approximately 65% for investors over the next 12 months. Its analysts said: "Following changes to its Board and with the appointment of a new CEO, we see more stability and focus returning to the PNV business."

The post Why Austal, Fenix Resources, Metcash, and Polynovo shares are falling today appeared first on The Motley Fool Australia.

Metcash on Monday reported first-half revenue of $8.5 billion, up 0.1%, while its underlying net profit fell 5.9% to $126.7 million.

Decent result given the conditions

Group Chief Executive Doug Jones said it was a solid result "in tough trading conditions''.

He went on to say:

Importantly, we've maintained good momentum in our core business, and our independent networks remain healthy and confident despite the challenging conditions. Our food business is now highly diversified and very resilient. Food again delivered earnings growth despite the significant and unprecedented decline in the sales of our largest product category, tobacco.

Mr Jones said while the grocery market was at its most competitive in years, Metcash's IGA network was itself "now more competitive than ever".

The ongoing pleasing performance in food reflects the success of our core wholesale and logistics functions, improvements made to the IGA network's value proposition, our investment in Campbells & Convenience underpinning its leading position in supply to the petrol and convenience market, and our expansion in foodservice through the Superior Foods acquisition.

Mr Jones said in the liquor division, there was sales growth in "a more difficult market", while in hardware and tools, there were "early signs of improvement in trade activity".

Metcash declared an interim dividend of 8.5 cents per share, fully franked.

Shares looking cheap

The team at Jarden ran the ruler over the results, and while they downgraded their price target on Metcash shares, they still rate the company outperform and for it to deliver double-digit shareholder returns.

The Jarden analysts said the result was about 5% below consensus estimates, "driven by misses in the higher-multiple hardware and liquor divisions''.

Looking forward, however, there was a case for optimism with some early green-shoots in food (ex-tobacco) and hardware, with Total Tools like fir like up 9.8% in the first four weeks of 2H26. However, liquor (flat) was softer, and remains at risk into 2H26. We upgrade Metcash to overweight following recent underperformance, with the view the business is seeing green shoots, is highly cash-generative and is positively leveraged to the cycle with a compelling valuation.

The Jarden team has a $3.80 price target on the stock, compared with the current price of $3.39, which would represent a 12.1% return if achieved. That figure does not include the dividend yield of 5.3%.

Macquarie this week slashed its own price target for Metcash to $3.50, down from $4.

The post This retail stock could deliver healthy double-digit returns after a steep fall this week appeared first on The Motley Fool Australia.

Trading in Metcash shares, and around 50 other ASX-listed companies, was suspended on Monday amid a platform outage. The wholesale distribution and marketing company behind the IGA supermarket chain, was the largest company caught up in the outage. Metcash requested a trading halt after it was unable to release a presentation about its FY26 first half year results while an investor call was underway.

For the six months ended 31 October, Metcash reported a 0.1% increase in group revenue. It also posted a 0.3% increase in profit after tax, and a 2% lift in its EBITDA. This was largely driven by strong growth in its Food pillar.

Following the company's results, Macquarie analysts wrote a note to investors with their latest outlook on the stock.

Target price lowered for Metcash shares

The broker confirmed its neutral rating on Metcash shares but slashed its target price to just $3.50. This is down from $4.00 previously. At the time of writing that represents a 4.8% upside for investors over the next 12 months.

"EBITDA declines of ~5-9% over medium-term driven by all segments, with the largest decline in Hardware given lower margins," the broker said.

We cut our TP 12.5% to $3.50, consistent with cashflow changes, partly offset by ~10bps reduction in risk-free rate to 4.2%.

With competitive pressures weighing across business and more subdued outlook for new housing creation, we see risks as evenly balanced at current pricing.

What else did Macquarie have to say?

Metcash's underlying EBIT for the first half of FY26 was 5% below market expectations and 10% lower than Macquarie estimates. The largest variances were in the company's Hardware and Liquor segments. 

Looking forward, we remain cautious on the potential for margin recovery with management calling out competition in Food and Hardware, in addition to evidence of heightened competition in Liquor (e.g., COL strategy and EDV response).

"The other key positive was cash conversion, with the 3-year cash realisation ratio at ~106%, well ahead of the 80-90% guidance range. Management expects this to revert to the upper end of the range," Macquarie said.

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As we covered earlier today, it was an interesting set of numbers for investors to digest.

Metcash reported a 0.1% rise in revenues to $8.48 billion for the six months to 31 October, compared to the same period in 2024. That was helped by growth in food, liquor, and hardware. However, they were significantly hindered by tobacco sales, which continue to haemorrhage. Without tobacco, revenues were up 4.5%.

Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) lifted 2% to $367.2 million. But total earnings before interest and tax (EBIT) dropped 2.4% to $240.2 million.

On the bottom line, Metcash revealed a reported profit after tax of $142.2 million. That's up 0.3% from last year's half.

It seems the market wasn't impressed with what Metcash had to show for itself today, though. At present, Metcash shares are down a nasty 9.2% to $3.36. That perhaps indicates that the market was expecting to see better numbers. Saying that, the stock has been significantly impacted by the ASX's issues today. As such, investors may wish to take that with a grain of salt.

But let's talk Metcash dividends.

Metcash holds its dividend steady

This morning, the company revealed that its latest dividend will be worth 8.5 cents per share. It will come fully franked, as the payouts from Metcash tend to do.

This dividend matches last year's interim payout exactly. However, it is lower than the 9.5 cents per share final dividend investors enjoyed back in August.

This latest interim dividend will find its way to shareholders' bank accounts on 28 January next year. To be eligible, though, investors will need to have Metcash shares against their name by the close of trading on 11 December next week. That's before the company trades ex-dividend on 12 December.

Eligible investors also have the choice to opt in to Metcash's dividend reinvestment plan (DRP) if they wish to receive additional shares in lieu of the traditional cash payment (at zero discount). The cut-off for the DRP is close-of-business on 16 December.

Since Metcash's dividend is flat year-on-year, its current (at the time of writing) dividend yield of 5.36% holds steady going forward.

The post Here's how much the new Metcash dividend is worth appeared first on The Motley Fool Australia.

But when they do return to action, the wholesale distributor's shares will be watched carefully.

That's because the ASX 200 stock released its half year results this morning.

ASX 200 stock on watch on results day

For the six months ended 31 October, Metcash reported a 0.1% increase in group revenue to $8.5 billion and a 0.4% lift to $9.6 billion including charge-through. This reflects growth in the Food (excluding tobacco), Liquor, and Hardware pillars.

Thanks to margin improvements, the ASX 200 stock's EBITDA lifted 2% to $367.2 million for the half. This was driven largely by strong growth in the Food pillar.

Management notes that Food EBITDA increased 9.8%, reflecting a strong trading performance in both Supermarkets and Foodservice & Convenience.

Liquor EBITDA was 4.8% lower due to the impact of one-off strategy costs, lower wholesale price inflation on strategic buying, and higher labour costs.

Hardware & Tools EBITDA was flat for the half, reflecting an improved sales performance, partly offset by one-off integration and strategy costs and retail margin pressure.

This ultimately led to the ASX 200 stock reporting a 0.3% increase in profit after tax to $142.2 million, which allowed it to declare a flat, fully franked interim dividend of 8.5 cents per share. Management notes that this is slightly above the company's target payout ratio of ~70% of underlying profit after tax, reflecting its strong cash performance.

Management commentary

Metcash's group CEO, Doug Jones, was pleased with the half. He said:

The business has delivered solid results in tough trading conditions, supported by disciplined operational performance and the successful execution of our strategy. Importantly, we've maintained good momentum in our core business, and our independent networks remain healthy and confident despite the challenging conditions.

On the back of decisive action taken over the last 5 years to both improve the core of our business and to position the Group for future growth, Metcash remains wellset for ongoing success with a stronger, more diversified and more resilient business, and with significant opportunities for accelerating growth.

Outlook

The company revealed that sales growth momentum has continued into the second half with the rate of growth lifting in Supermarkets and Total Tools, and "broadly sustained" in Foodservice & Convenience, Hardware, and Liquor.

It also advised that it is "planning for positive sales momentum over the remainder of the half."

The post Metcash shares on watch amid $142m first half profit and flat dividend appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set for a decent start to the week following a positive finish to the last one on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points higher. In the United States, the Dow Jones was up 0.6%, the S&P 500 rose 0.55%, and the Nasdaq pushed 0.65% higher.

Oil prices ease

It could be a soft start to the week for ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices eased on Friday night. According to Bloomberg, the WTI crude oil price was down 0.2% to US$58.55 a barrel and the Brent crude oil price was down 0.8% to US$62.38 a barrel. Russia and Ukraine peace talks have weighed on prices.

Metcash results

Metcash Ltd (ASX: MTS) shares will be on watch today when the wholesale distributor releases its first half results for FY 2026. According to a note out of UBS, it is expecting the company to report sales of $9.69 billion, underlying EBIT of $253.7 million, and a net profit of $136.1 million.

Gold price jumps

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could start the week strongly after the gold price jumped on Friday night. According to CNBC, the gold futures price was up 1.25% to US$4,254.9 an ounce. This was driven by expectations that the US Federal Reserve will cut interest rates this month.

Buy Hub24 shares

Bell Potter thinks that Hub24 Ltd (ASX: HUB) shares could be in the buy zone today. This morning, the broker has retained its buy rating on the investment platform provider's shares with a trimmed price target of $125.00. It said: "Negative surprise in the expense guidance, but we left confident in the growth outlook and cadence over peers. More than mitigated from scale and entrenches customers in line with our initial thesis. Adviser efficiency has historically benefitted flows/valuation."

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

With solid operational momentum, improving cash flow and attractive dividend yields, the wholesale distribution heavyweight is emerging as a compelling pick if you're after passive income.

Resilient food and liquor distribution

Metcash's diversified business – spanning food, liquor, and hardware divisions – is showing strength. The food and liquor divisions are resilient, as they distribute food and liquor to hundreds of independent retailers across Australia, including IGA, Cellarbrations, IGA Liquor, The Bottle-O, Porters, and Thirsty Camel.

The ASX dividend share also operates a foodservice component, which supplies commercial customers, including hotels, restaurants, cafes, and others.

Softer market hits hardware division

Metcash is also the second-largest player in the Australian hardware market, as it owns businesses such as Mitre 10, Home Hardware, and Total Tools. The hardware business has gone through a few difficult years because of weak construction activity. Now, it looks like things might turn around.

After a challenging FY25, analysts are projecting that the company's earnings could increase by approximately 10% to $300 million in FY26 (and another 10% in FY27).

The latest trading update was a step in the right direction. In the 18 weeks to 31 August 2025, total sales excluding tobacco increased 5.1% (or 1.1% including tobacco). Total food sales were up 8.6% excluding tobacco sales, total liquor sales were up 1.5%, and Total Tools and Hardware Group sales were up 1.8%.

Reliable payouts

On the income reliability front, Metcash has paid two fully franked dividends every year since 2017. The business pays around 70% of its underlying net profit as a dividend, which led to a total dividend per share of 18 cents in FY25. That translates into a trailing grossed-up dividend yield of 6.75%, including franking credits.

UBS projects the ASX dividend share to increase its payout every year between FY25 to FY29. That could be great news for investors focused on passive income.

Most analysts also predict moderate to strong upside from Metcash's share price of $3.76 at the time of writing. They have set an average price target of $4.30, which suggests a share price gain of 15%. That could lift total Metcash earnings, including dividends, past the 20% mark.  

Broker Shaw and Partners sees the ASX dividend share as a good option for income investors, but it only rates it as a hold. It notes:

We suggest holding Metcash for stable income and defensive positioning. It offers a solid dividend yield, resilient earnings and reliable cash flow in uncertain markets. Its exposure to essential consumer goods and regional retail provides downside protection, making it a suitable hold for income-focused investors seeking stability over aggressive growth.

The post Up 21% this year! This fast-recovering ASX dividend share might not be a bargain forever appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) experienced significant fluctuations last week.

The US market wobbled and the ASX 200 followed suit, hitting a near six-month low before closing 2.52% lower for the week.

Bell Potter described a "sharp derating" of tech stocks, with the sector the worst performer of the week.

Tech shares fell 4.07% amid persistent fears of an artificial intelligence (AI) bubble.

Additionally, both the technology and financials sectors fell to six-month lows as expectations of a US interest rate cut faded.

Australian wages and jobs data released last week did nothing to change expectations that our cash rate will stay on hold as well.

The markets are currently pricing a 6% chance of a rate cut in December, and Betashares chief economist David Bassanese said the "benign" wages and jobs data "should not shift the needle significantly either way regarding the RBA outlook for interest rates".

Bell Direct market analyst, Sophia Mavridis described last week's volatility:

… the Australian share market dropped to a near six-month low before rebounding.

The benchmark ASX 200, which lost around $220 billion dollars in cumulative value over the last four weeks, found critical support after a week of global uncertainty.

Now, the drop was driven by mounting concerns over lofty technology valuations and a general global risk-off mood ahead of key US earnings.

However, the mood shifted following a blowout earnings report from us chip giant Nvidia, which eased the global fears of an impending AI bubble pop and sparked a major relief rally …

However, that relief rally on Thursday was short-lived, with fear returning to the market on Friday and ASX 200 shares falling 1.59%.

ASX 200 still expensive, says fundie

Over the past month, the ASX 200 has fallen by more than 7% after hitting a record of 9,115.2 points in mid-October.

Despite the fall, experts say the market is still expensive.

Blackwattle Investment Partners said the ASX 200 is trading on a 21x forward price-to-earnings (P/E) ratio.

This compares to a 10-year average of about 16x.

Consumer staples shares led the ASX sectors last week

Amid the volatility, it was fitting that consumer staples, one of the market's most defensive sectors, came out on top.

The share price of the sector's largest company, Woolworths Group Ltd (ASX: WOW), fell 0.57% to $28.08.

Coles Group Ltd (ASX: COL) shares rose 0.54% to $22.43.

The A2 Milk Company Ltd (ASX: A2M) share price rose 1.52% to $9.36.

The share price of liquor retailer and hotels owner Endeavour Group Ltd (ASX: EDV) fell 0.27% to $3.66.

The ASX 200's largest pure-play wine share, Treasury Wine Estates Ltd (ASX: TWE) fell 3.12% to close at a 52-week low of $5.58.

IGA network owner Metcash Ltd (ASX: MTS) fell 2.08% to $3.76 per share.

ASX 200 agriculture share Graincorp Ltd (ASX: GNC) recovered 5.76% to close at $8.45 apiece.

This followed a near-10% fall the week before after the company's FY25 report disappointed investors.

Bega Cheese Ltd (ASX: BGA) shares fell 0.51% to close at $5.90 on Friday.

The Elders Ltd (ASX: ELD) share price lifted 8.61% to $7.57 on the back of a strong FY25 report released on Tuesday.

ASX 200 market sector snapshot

Here's how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

The post Why did the ASX 200 dive to a near six-month low last week? appeared first on The Motley Fool Australia.

Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) are highly followed businesses by investors and their price/earnings (P/E) ratios are higher than they used to be, reducing the dividend yield on offer.

The largest businesses also have less growth potential than they used to because they're already huge. Smaller businesses with commendable market positions could be preferable choices for dividends. Let's take a look at two compelling ideas.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is one of the largest pathology businesses in Australia. It also has a good market presence in countries like Germany, the UK and Switzerland. Plus, it has a small position in markets like New Zealand and Belgium.

People don't choose when to get sick or when they need medical attention. People also place a high importance level on their health, so I'd say this business has defensive earnings.

In FY25, the business delivered 8% revenue growth to $9.6 billion, 7% net profit growth to $514 million and 21% growth of operating cash flow to $1.3 billion. This growth helped the business increase its annual payout per share to $1.07, which translates into a trailing dividend yield of 4.9%, excluding franking credits.  

The ASX blue-chip share is expecting to grow its payout in the coming years with future earnings growth.

Sonic Healthcare suggests its FY26 operating profit (EBITDA) could grow up to 13% year-over-year with "strong" earnings per share (EPS) growth (of up to 19%). Management point to organic growth, Swiss and German synergies, acquisitions and US initiatives as drivers of this guidance.

Metcash Ltd (ASX: MTS)

Metcash is a diversified business thanks its three different divisions – food, liquor and hardware.

I'd describe the food and liquor divisions as resilient, as it distributes food and liquor to hundreds of independent retailers around the country including IGA and other supermarkets, as well as Cellarbrations, IGA Liquor, The Bottle-O, Porters, Thirsty Camel and others.

The food division also has a business called Superior which services restaurants, cafes, canteens, caterers, schools, universities, healthcare and aged care facilities.

The ASX blue-chip share owns a number of businesses in its hardware segment including Mitre 10, Home Hardware, Total Tools, Bianco Construction Supplies and Alpine Truss.

I like how defensive the food and drink side of the business is, while the hardware segment could see a bounce back from tough operating conditions following RBA rate cuts and a resurgence in house prices. That bodes well for the growth of the dividend yield in the future, in my view.

The recent trading update was promising. In the 18 weeks to 31 August 2025, total sales excluding tobacco increased 5.1% (or 1.1% including tobacco). Total food sales were up 8.6% excluding tobacco sales, total liquor sales were up 1.5% and Total Tools and Hardware Group sales were up 1.8%.

The business pays around 70% of its underlying net profit as a dividend, which led to a total dividend per share of 18 cents in FY25. That translates into a trailing grossed-up dividend yield of 6.75%, including franking credits.

The post 2 ASX blue-chip shares offering big dividend yields appeared first on The Motley Fool Australia.

That's because two have been tipped as buys, courtesy of The Bull, by analysts at Shaw and Partners. Here's what the broker is recommending to clients:

Woolworths Group Ltd (ASX: WOW)

The first ASX share that is being tipped as a buy is supermarket giant Woolworths.

Shaw and Partners highlights that its shares have pulled back materially since the release of its full year results. It appears to believe that this has created a rare entry point in a defensive and high-quality stock. It said:

Investors have punished the share price since the supermarket giant released its full year results. The shares closed at $33.42 on August 26, the day before the results. The shares were trading at $27.59 on September 18. We suggest investors buy the stock while sentiment is low and value is compelling. The stock is currently out of favour, so it offers a rare entry point into a high quality defensive business with strong brand loyalty. Company earnings are resilient, supported by essential consumer spending. In our view, Woolworths presents upside potential for portfolios seeking stability and recovery.

BWP Trust (ASX: BWP)

Another ASX share that is rated as a buy by Shaw and Partners is BWP Trust.

It likes the Bunnings property owner due to its high occupancy rate, stable cash flow, and attractive dividend yield. Commenting on the share, the broker said:

This real estate investment trust invests in and manages commercial properties across Australia. BWP is the biggest owner of Bunnings hardware sites in Australia with 66 stores. BWP offers dependable income and asset quality. The trust owns prime land with low cost buildings, resulting in minimal depreciation and strong capital preservation. High occupancy, stable cash flow and an attractive dividend yield make BWP a prudent choice for income focused investors seeking low volatility and long term value.

Metcash Ltd (ASX: MTS)

A final ASX share that the broker has been looking at is wholesale distributor Metcash.

The broker sees it as a good option for income investors, but it only rates it as a hold at present. It explains:

Metcash is a wholesale distribution and marketing company involved in food, liquor and hardware. We suggest holding Metcash for stable income and defensive positioning. It offers a solid dividend yield, resilient earnings and reliable cash flow in uncertain markets. Its exposure to essential consumer goods and regional retail provides downside protection, making it a suitable hold for income-focused investors seeking stability over aggressive growth.

The post Buy Woolworths and this ASX share: Shaw and Partners appeared first on The Motley Fool Australia.

While businesses like Fortescue Ltd (ASX: FMG) and Commonwealth Bank of Australia (ASX: CBA) get a lot of attention for their dividend payments, I don't think they are at an appealing value to buy right now.

Other ASX 200 shares seem to have better long-term growth prospects and are trading at better values. Let's look at some other opportunities here.

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare is one of the world's largest pathology businesses, with a presence in Australia, the USA, Germany, the UK, and a few other Western countries.

I think healthcare is one of the most defensive sectors, but also offers growth thanks to the increasing and ageing populations of Sonic Healthcare's markets. Plus, it has utilised acquisitions to good effect to boost its scale, particularly in a place like Switzerland.

The ASX 200 share has delivered long-term growth over the years, with further growth in FY25. The last financial year saw net profit growth of 7%, cash flow growth of 21%, and a 1% increase in the annual dividend per share to $1.07.

At the current Sonic Healthcare share price, it has a dividend yield of 4.7%, excluding any possible franking credits. The company is expecting to deliver a progressive dividend in the future.

It's expecting to grow its earnings per share (EPS) by up to 19% in FY26, using the same exchange rate.   

Metcash Ltd (ASX: MTS)

Metcash is a diversified food, liquor, and hardware business. It supplies IGAs across Australia, as well as a number of independent liquor brands, including Cellarbrations, The Bottle-O, IGA Liquor, Porters, Thirsty Camel, and others. Its hardware division includes a number of businesses, including Mitre 10, Home Hardware, True Value Hardware, Thrifty-Link, Hardings, Design 10, and Total Tools.

In the trading update for the 18 weeks to 31 August 2025, the company saw total sales rise 1.1%, or 5.1% excluding tobacco. Total food sales grew 8.6% excluding tobacco, or 0.6% including tobacco, liquor sales increased 1.5%, and hardware sales grew 1.8%.

Pleasingly, hardware sales are seeing growth in both trade and DIY. The food division is seeing particularly strong growth in foodservice and convenience.

The ASX 200 share aims to deliver a dividend payout ratio of 70% of underlying net profit.

In FY25, it paid an annual dividend per share of 18 cents. That translates into a dividend yield of 4.5%, or 6.5% including franking credits. If sales and scale continue improving, I think the business can grow its payout in FY26 and beyond.

The post 2 ASX 200 shares that could make it rain dividends appeared first on The Motley Fool Australia.

What did Metcash report in FY25?

• Group revenue rose 7.2% to $19.5 billion (including charge-through sales)
• Underlying profit after tax fell 2.4% to $275.5 million
• Reported profit after tax climbed 10.1% to $283.3 million
• EBITDA up 8.6% to $747.8 million, while group EBIT increased 2.3% to $507.8 million
• Operating cash flow increased 11.7% to $539 million
• Total fully franked dividend of 18 cents per share, about 72% of underlying profit after tax

What else happened in FY25?

Metcash reported healthy growth in its Food division, with supermarkets and its Campbells & Convenience businesses growing earnings despite lower tobacco sales. In Liquor, the business outperformed the broader market, boosting market share. The year also saw the merger of Superior Foods with Campbells & Convenience, and the combination of Independent Hardware Group and Total Tools to form the Total Tools and Hardware Group, streamlining its operations.

The company continued to progress on ESG targets, achieving further reductions in emissions and earning recognition from global sustainability benchmarks. Board changes included the addition of two new non-executive directors, while the company maintained a focus on gender equality and improved safety.

What did Metcash management say?

Commenting on the company's performance, Group Chief Executive Officer Doug Jones said:

Metcash's increased diversification and operational discipline helped us drive sales and earnings growth, while our focus on working capital delivered strong cash performance across the group.

What's next for Metcash?

Metcash is investing across pillars to strengthen its business and grow future margins. FY26 has started well with sales growth across all business segments. The group is extending further through the value chain, closer to customers, to unlock new sources of revenue and margin expansion. Metcash will also continue with corporate development, including a cross-pillar marketing campaign and targeted store renewals, while keeping ESG and diversity at the centre of its strategy.

Metcash share price snapshot

Over the past 12 months, the Metcash shares have risen 12%, slightly ahead of the S&P/ASX 200 Index (ASX: XJO) which is up 10% over the same period.

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