I like it when ASX shares pay dividends because it means our bank account is experiencing the improvement in the profit of that business – it's not just 'on paper' returns. The more it grows, the bigger the dividend payments can be.

With that in mind, I'm going to talk about two ASX shares that I believe are likely to grow their underlying earnings and dividend significantly over the next several years.

Pinnacle Investment Management Group Ltd (ASX: PNI)

This business makes investments in high-quality funds management businesses ('affiliates') and helps them grow by offering a number of services including client distribution services, legal, finance, compliance, seed funds under management (FUM) and plenty of other areas.

This allows the fund manager to focus on delivering strong investment returns, which is the best way to help grow its FUM.

Pinnacle's portfolio of fund managers, such as Coolabah, Solaris, Pacific Asset Management, Firetrail and Plato, has steadily grown Pinnacle's total affiliate FUM and this helped increase the underlying profit.

Performance fees can be variable, so its statutory net profit won't necessarily grow every single year. But, ongoing FUM inflows across the portfolio can help the core earnings and fund strong growth of its 'base' dividend.

The projection on Commsec suggests the ASX share's forecast earnings per share (EPS) could grow by 68% between FY26 and FY28.

This would mean it's currently trading at under 16x FY28's estimated earnings, with a potential grossed-up dividend yield of around 7.7%, including franking credits for FY28, at the time of writing.

Guzman Y Gomez Ltd (ASX: GYG)

GYG is a Mexican restaurant business, with more than 200 locations in Australia, as well as a few in Singapore, Japan and the US.

The company is delivering good sales growth at its existing restaurants, which is helping drive good (and growing) restaurant margins. In the third quarter of FY26, the business reported comparable sales growth across Australia, Singapore and Japan of 6.6%.

The ASX share also has significant plans to expand its Australian restaurant network in the coming years, which can help drive total network sales and scale benefits. At 31 March 2026, it had 242 Australian locations (up 31 year-over-year) – it wants to reach 1,000 Australian locations within 20 years.

The company's total network sales grew 19.5% to $345.9 million in the third quarter of FY26, demonstrating its compounding ability. I'm not counting on the US expansion efforts to add anything meaningful, but if it does then it could be a very useful bonus.

The projection on Commsec suggests EPS could rise by 127% between FY26 and FY28, putting the valuation at 42x FY28's estimated earnings, at the time of writing.

GYG's dividend is not expected to be huge, but it could rapidly rise in the coming years. The forecast amount for FY28 translates into a possible grossed-up dividend yield of 2.35%, including franking credits.

The post 2 ASX shares that I rate as buys today for both growth and dividends! appeared first on The Motley Fool Australia.

For long-term investors, this kind of volatility isn't a threat. It's a calendar.

A 10% pullback from current ASX 200 levels wouldn't be unusual by historical standards. 

What matters more is what you'd do with it. Rather than reaching for a broad ETF, I'd be looking at two specific companies that I think deserve a spot in a quality portfolio — and that would become even more compelling at lower prices.

The case for Soul Patts

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is one of Australia's oldest listed investment companies, but it operates more like a quietly compounding private holding company than a traditional fund manager.

Soul Patts gives investors exposure to a carefully managed mix of assets: resources, telecommunications, nationwide swimming schools, agriculture, water entitlements, electrification, and more. It recently completed its full merger with Brickworks and has been actively reshaping its portfolio — most notably, selling down its long-held stake in TPG Telecom Ltd (ASX: TPG) to free up capital for higher-growth opportunities.

That capital reallocation is the interesting part. Soul Patts isn't sitting still. The proceeds from the TPG selldown give management fresh firepower to deploy into assets it believes will deliver stronger long-term growth. For a patient investor, that's exactly what you want to see — disciplined capital allocation, not loyalty to underperforming positions.

At time of writing, the Soul Patts share price is currently around $42.30. A 10% market-wide pullback might push the share price even lower, but the underlying value and fundamentals of the Sol Patts' underlying businesses wouldn't change materially. That's the gap a long-term buyer could exploit.

Why Pinnacle is worth watching

Pinnacle Investment Management Group Ltd (ASX: PNI) is a different kind of business but a similarly compelling structural story.

Pinnacle runs a network of affiliated fund managers, providing them with seed capital, distribution support, and operational infrastructure. It earns revenue from management fees and a share of affiliate profits — a model that scales well as funds under management grow.

In its most recent half-year results, Pinnacle reported record net inflows of $17.2 billion, with strong contributions across retail, institutional, and international channels. That's a business attracting capital, not losing it.

The Pinnacle share price has pulled back sharply from its 52-week high of $25.33 to around $12.30, and the stock carries an analyst price target of around $24. That's a meaningful gap between where the share price is and where analysts believe it could be.

A broader market sell-off would likely push Pinnacle lower in the near term. But for an investor with a long time horizon, that volatility is a feature, not a flaw.

The Foolish takeaway

Neither of these companies needs a market crash to be worth owning. Both are genuinely interesting at today's prices. But the point of having a watchlist is knowing exactly what you'd do when prices move — and a further 10% dip in the ASX 200 could see individual stocks like Soul Patts and Pinnacle fall further still, putting them within reach of entry prices that are difficult to walk away from.

As always, share prices can fall further than expected, and volatility driven by macro events — energy prices, rate expectations, geopolitical uncertainty — can linger longer than most anticipate. However, quality doesn't go on sale forever. 

When it does, it pays to be ready.

The post 2 quality ASX 200 shares I'd buy if the market fell another 10% appeared first on The Motley Fool Australia.

Energy prices and supply chain networks impact almost all corners of the global economy.

So it wasn't surprising to see a broad market sell-off over the first three weeks of March as multiple industries assessed the damage.

The sell-off now leaves room for investors to buy the dip.

A two-week ceasefire is underway amid hopes of a long-term deal between the US and Iran soon.

Brokers have reviewed their ratings after many shares fell, and they see good opportunities across a number of industries.

Here are some of the ASX All Ords shares elevated to strong buy consensus ratings after last month's turmoil.

6 ASX All Ords shares newly upgraded to strong buy ratings

These ASX shares have just been upgraded to strong buy consensus ratings among analysts on the CommSec platform.

A consensus rating represents the average rating among analysts.

Kingsgate Consolidated Ltd (ASX: KCN)

The Kingsgate Consolidated share price fell 38% in March alongside a big fall in the gold price.

In April so far, the ASX All Ords gold share is up 19% to $5.22 at yesterday's close.

MA Financial is among the brokers that have upgraded Kingsgate shares.

The broker also lifted its 12-month share price target from $6.85 to $6.95.

Pinnacle Investment Management Group Ltd (ASX: PNI)

The Pinnacle Investment Management share price fell 10% in March.

This month, the ASX All Ords financial shares is up 4% to $14.63.

Canaccord Genuity is buy-rated on Pinnacle shares with a $24.53 target.

Zip Co Ltd (ASX: ZIP)

The Zip share price fell 19% in March.

This month, the ASX All Ords financial share is up 19% to $1.84.

Blackwattle holds Zip shares in its Small Cap Quality Fund.

Portfolio managers Robert Hawkesford and Daniel Broeren describe Zip as 'one of the most compelling value opportunities on the ASX'.

WA1 Resources Ltd (ASX: WA1)

The WA1 Resources share price fell 20% in March.

This month, the ASX All Ords copper share is up 9% to $15.19.

Canaccord Genuity is buy-rated on WA1 Resources shares with a $32 target.

Macquarie Technology Group Ltd (ASX: MAQ)

The Macquarie Technology share price fell 12% in March.

In April so far, the ASX All Ords tech share is up 12% to $66.60.

Canaccord Genuity is also buy-rated on this stock with a $95 target.

Santana Minerals Ltd (ASX: SMI)

The Santana Minerals share price fell 27% in March.

This month, the ASX All Ords gold share is up 2% to 68 cents.

Shaw & Partners has a buy rating and a $2.15 target on Santana Minerals shares.

Further reading

Check out 7 ASX 200 shares just upgraded to strong buy ratings, too.

The post 6 ASX All Ords shares elevated to strong buy status after March sell-off appeared first on The Motley Fool Australia.

I'd want a good dividend yield, good growth potential and an attractive valuation.

The three stocks below really tick my boxes right now.

Centuria Industrial REIT (ASX: CIP)

I think this business, a real estate investment trust (REIT), could be one of the best ideas in the sector for finding rental growth.

It's an industrial property pure play with a national portfolio of buildings in locations where demand is strong and vacancy is low.

The ASX dividend share is benefiting from increasing demand related to tailwinds like a growing population, increasing e-commerce adoption, more data centres and so on.

In the FY26 half-year result, the business reported that its like-for-like net operating income (NOI) growth was 5.1% and it's expecting to grow its FY26 annual distribution to 16.8 cents per unit. That translates into a forward distribution yield of 5.8%, at the time of writing.

It also reported that its HY26 net tangible assets (NTA) were $3.95 per unit at 31 December 2025, so it's trading at a 27% discount to this at the time of writing.

WCM Global Growth Ltd (ASX: WQG)

This is a listed investment company (LIC) which looks to give investors exposure to a global portfolio of businesses with expanding economic moats and a business culture that fosters the improvement of the economic moat.

Competitive advantages are an important part of a business staying ahead of peers that want to take their market share. If those advantages are getting stronger, that's a signal the business has more power to make bigger profits.

The impressive investment returns the ASX dividend share has generated have allowed it to steadily increase its dividend over the last several years. At the moment, it's hiking its quarterly dividend every quarter.

It's expecting to pay a quarterly dividend of 2.45 cents per share in a year from now in March 2027. That translates into an annualised grossed-up dividend yield of 8.2%, including franking credits, at the time of writing.

The business is trading at a discount to its latest weekly NTA before tax of $1.81 at 27 March 2026.

Pinnacle Investment Management Group Ltd (ASX: PNI)

This business is invested in a portfolio of high-quality fund managers (affiliates) and helps them grow their business.

Pinnacle can provide a wide array of behind-the-scenes services to its affiliates such as compliance, legal and client distribution. This allows the fund managers to focus on what their clients are really paying for – investment professionals delivering investment returns.

When the share markets fall it hurts the funds under management (FUM), which in turn hurts the ASX dividend share's earnings potential in the shorter-term, but I think this cyclical nature makes it a good opportunity to buy during bear markets.

Pinnacle's expanding portfolio of affiliates have a long-term track record of largely outperforming their benchmarks and attracting new client FUM, which is a powerful combination for growing FUM and earnings.

According to the projection on Commsec, Pinnacle could pay an annual dividend per share of 62 cents in FY26, which translates into a grossed-up dividend yield of more than 5.5%, including franking credits, at the time of writing.

The post 3 top ASX dividend share buys for passive income in April appeared first on The Motley Fool Australia.

Both the S&P/ASX 200 Index (ASX: XJO) and the gold price have been weaker since the start of the war in late February, which can present a buying opportunity.

Volatility remains

The Canaccord team does say to proceed with caution however.

They said in a research note to clients this week:

With the US appearing to now be actively seeking an off-ramp, our central case continues to be that a resolution to the conflict will be struck over the coming weeks. However, the risk of an escalation in hostilities and more prolonged conflict is still a scenario that needs to be factored into the investment strategy equation. We remain well diversified given elevated levels of uncertainty; however, we are not bearishly positioned.

On the interest rates front, Canaccord said the recent, second rate rise in Australia, "with a bias to do more", increases the risk of a sharper slowdown in growth later this year.

They said further:

Higher interest rates will weigh on consumption and business confidence, while global uncertainty linked to geopolitical tensions also threatens to dampen external demand over coming months. Governor Bullock acknowledged that a recession is not the Bank's central case and certainly not its objective but cautioned that failing to bring inflation under control would ultimately be more damaging to employment and long-term growth.

In terms of the equities they think could recover well in the case of the war scaling back, Canaccord has picked two miners and a financial company.

Evolution Mining Ltd (ASX: EVN)

Canaccord said that Evolution offers "clean leverage" to a recovery in the gold price, and to a lesser extent copper, underpinned by its "best in class" operational delivery.

They went on to say:

Gold has pulled back sharply on higher real yields, USD strength, and liquidity-driven selling, with investors using it as a source of funds during recent volatility, creating a dislocation between price and medium-term fundamentals. Importantly, we remain constructive over the medium term, with key structural tailwinds intact, including longer-term USD debasement and strong central bank demand. As liquidity pressures ease and positioning normalises, gold should recover, with EVN providing leveraged exposure. Iran de-escalation represents a key near-term catalyst for a recovery in gold.

Sandfire Resources Ltd (ASX: SFR)

Canaccord said as the ASX's largest copper-focused miner, Sandfire provides clean leverage to a recovery in copper.

They add:

The industrial metal has pulled back on cyclical growth concerns linked to the Iran conflict, creating an attractive entry point for investors willing to look through near-term uncertainty. While cyclical demand risks remain, structural drivers (EVs, energy storage, renewables) and a tight supply backdrop support a constructive medium-term outlook. Copper appears well placed to rebound over the coming months, assuming no prolonged escalation in Iran (not our base case), with Sandfire providing leveraged exposure

Pinnacle Investment Management Group Ltd (ASX: PNI)

Canaccord said the recent pullback in Pinnacle shares represents an attractive entry point for investors looking to position themselves for a broader equity market recovery.

They say the recent weakness in the shares reflects its leverage to the broader equity market, alongside concerns around private credit.

Canaccord says the company remains a "compelling medium-term proposition, given its diversified stable of affiliates with strong funds under management growth prospects''.

The post Three ASX 200 stock picks to consider now, to drive gains as markets and the gold price recover appeared first on The Motley Fool Australia.

It is possible the ASX share market could decline further. The Strait of Hormuz remains shut to most vessels, inflation is bubbling and certain costs are going up. I'm not about to make any predictions of when things will start improving.

But, I'm also optimistic about the long-term and I'm seeing plenty of opportunities around for Aussies to take advantage of. So, how are we supposed to invest during these worrying times?

Dollar cost averaging

The idea behind dollar cost averaging (DCA) is that you don't put all your available investing dollars into the market at once.

Investors steadily put their money into buying (ASX) shares regularly. During a bear market, this means they are able to keep investing even as the market goes lower.

It's up to each individual investor to decide how much they invest and how regularly they do it. Someone who has been waiting for a period like this with a pile of cash may decide to invest an amount (such as around $1,000) each week (or even each day if the market is plunging).

Other investors may be utilising a DCA strategy for all of their investing month after month, year after year.

I regularly invest each month with money my household has saved, but, in addition, I also have a separate amount that I've been regularly putting bit by bit into the market as it falls.

That separate amount could be parked in an offset account or high interest savings account until it's needed. Not every single dollar of cash needs to be invested at all times for it to be useful for our finances (and portfolio).

Be brave

Part of a winning strategy during this period is staying calm and thinking about the long-term potential of one's portfolio.

Share prices don't fall for no reason, there's usually something that's affecting market confidence such as a pandemic, high inflation or jumping oil prices. These impacts don't last forever.

It's not easy to invest at times like this, but that's why share prices have fallen to such an attractive level.

ASX growth shares like Temple & Webster Group Ltd (ASX: TPW), Breville Group Ltd (ASX: BRG), Pro Medicus Ltd (ASX: PME), Tuas Ltd (ASX: TUA) and Pinnacle Investment Management Group Ltd (ASX: PNI) are just a few of the names that have great long-term prospects, in my view.

As Warren Buffett once said:

Be fearful when others are greedy and greedy when others are fearful.

The lower the ASX share market goes, the more I'm motivated to invest. Historically, the share market has recovered from negative times, even if it takes a while to do so.  

The post How to invest during an ASX share bear market when you're worried about prices falling more appeared first on The Motley Fool Australia.

It's not often that some of the most compelling businesses trade at extremely low prices.

We saw great prices during 2022 and 2023 as high inflation caused concerns about economic conditions and rising interest rates. It seems the same thing is happening again, which I believe will be a great opportunity to buy and hold these Australian stocks for the long term.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle says it's an investment business that is growing a diverse family of world-class investment management businesses (affiliates).

Along with holding stakes in these affiliates, Pinnacle provides seed funding, global institutional, retail distribution, and "industrial-grade" middle office and infrastructure services.

By doing this, Pinnacle enables the investment professionals to focus on delivering investment returns for clients.

Pinnacle has a growing portfolio, which includes Aikya, Antipodes, Coolabah Capital, Firetrail, Hyperion, Life Cycle, Metrics, Pacific Asset Management, Resolution Capital, and more.

For a business that has a large chunk of its earnings linked to funds under management (FUM) performance, it's understandable why the Pinnacle share price has declined during this period. But the fall of more than 20% this year seems like an overreaction.

Pinnacle's affiliates have a strong collective track record of outperforming their benchmarks over the long term, and they also have a history of attracting net inflows from clients. This has helped drive the underlying net profit (excluding performance fees) of Pinnacle over the long term. I believe FUM growth will return (or continue) after this period.

With the current market pessimism, I think this is a great time to look at the Australian stock while it's trading at under 20x FY26's estimated earnings, according to CMC Invest.

Lovisa Holdings Ltd (ASX: LOV)

Another business I think would be a great buy during this market volatility is Lovisa, a retailer of affordable jewellery that has a global store network.

The business has built an impressive market position and continues to grow at an impressive rate.

Its financial growth and store rollout are two of the main reasons to consider this Australian stock, in my view, along with the fact that the Lovisa share price has dropped more than 25% this year, making the valuation much more appealing.

Excluding its new start-up business Jewells, Lovisa reported in HY26 that revenue grew by 22.7%, with comparable store sales growth of 2.2%. Underlying operating profit (EBIT) increased by 20.4%, and net profit increased 21.5% despite the fact that the company is investing significantly in long-term growth.

Its global store count increased by 152 (or 16%) year over year to 1,095. Store growth is happening in numerous countries, including Australia, South Africa, China, Vietnam, the UK, Zambia, Ireland, Spain, France, Germany, the Netherlands, the USA, Canada, and Mexico.

As long as the Australian stock continues to deliver positive comparable store sales growth, I think the store rollout will be a positive for both total revenue and long-term profit margins.

I'm not expecting the new Jewells business to become a major contributor to the company, but it may have a promising future if it can reach a certain scale.

The Lovisa share price is currently valued at 24x FY26's estimated earnings, according to CMC Markets. This seems like a very promising time to invest, in my view.

The post 2 strong Australian stocks to buy now with $8,000 appeared first on The Motley Fool Australia.

Canaccord Genuity has issued a research note to its clients recently, with a very bullish price target on the funds manager, which we'll get to shortly.

Firstly, what does the company do?

Pinnacle offers the ability to invest in products offered by a range of different "affiliates" – themselves major fund managers and investors – with both retail and wholesale investors catered for.

Strong capital flows

In its most recent half-year results, Pinnacle said it had experienced record net inflows of $17.2 billion, with $6.8 billion in retail inflows, $7 billion in institutional, and $3.4 billion in international inflows.

Pinnacle Chair, Alan Watson, said of the results:

Our broad platform of Affiliates and strategies, together with increasing presence in much larger addressable end markets, has underpinned a strong net flow outcome for the half, which will drive revenue growth in future periods. It is pleasing that all existing Affiliates are profitable with revenues and core earnings continuing to build. Finally, we are delighted to welcome our nineteenth Affiliate, Advantage Partners of Japan, and today announce further investment into Pacific Asset Management. We are confident that both of these growth initiatives will be to the benefit of our clients, people and shareholders.

Pinnacle's first-half net profit was $67.3 million, down 11% on the previous corresponding period, and the company said it had about $110 million of "dry powder" available to invest at the end of the half.

In its research note to its clients, Canaccord said it has its eye on one Pinnacle affiliate in particular in Metrics, which gives investors exposure to Australian corporate loans.

As they said:

We believe FY26 will be the breakout year for Metrics following the ingestion and optimisation of several acquisitions that should finally begin to yield fruit. Performance is tracking well across all major Metrics' funds financial year to date with asset under management holding steady since the December half, highlighting that despite fears of an en-masse redemption wave and liquidity shortfall, the numbers don't currently support this but will be a watching brief with the detailed disclosures provided by Metrics at the fund/trust level highlighting a position of significant strength.

Shares looking cheap

Canaccord has a price target of $24.53 on Pinnacle shares, down from $27.22, but still well above the current price of $13.56.

Pinnacle was removed from the S&P/ASX 100 Index (ASX: XTO) in the most recent rebalance, which became effective on March 23.

Pinnacle was valued at $3.17 billion at the close of trade on Monday.

The post This beaten-down ASX financial stock could deliver returns of better than 80% appeared first on The Motley Fool Australia.

While that is disappointing for our portfolios, the short term pain could have created some compelling buying opportunities.

But which ASX 200 shares are buys? Let's take a look at five that Wilsons thinks have been oversold.

Wilsons says these ASX 200 shares have been oversold

Wilsons highlights that ASX growth shares and those linked to financial markets have undertaken a major de-rating.

This includes hearing solutions company Cochlear Ltd (ASX: COH), investment platform provider Hub24 Ltd (ASX: HUB), and investment management company Pinnacle Investment Management Group Ltd (ASX: PNI).

Wilsons points out that these ASX 200 shares are now trading on lower than average PE ratios despite having positive outlooks. It explains:

Growth stocks and companies with earnings leverage to financial markets have de-rated as bond yields have risen and risk assets weakened, creating selective opportunities on a medium-term view. Pinnacle (PNI) and HUB24 (HUB) trade below five-year average P/E multiples while retaining strong structural growth and offering meaningful leverage to an eventual equity market recovery. Cochlear (COH) trades at a decade-low P/E, with its Nexa product cycle supporting medium-term earnings acceleration.

What else?

Also catching the eye of Wilsons is Amcor (ASX: AMC). Its shares are trading close to 52-week lows despite having defensive qualities and being well-placed for growth from just the synergies of the Berry acquisition. It adds:

Cyclicals outside mining have also weakened on global and domestic growth concerns. We remain cautious on domestic cyclicals given a soft backdrop and RBA tightening but see more compelling opportunities offshore. Amcor (AMC), while arguably a defensive given its consumer staples end-market exposure, has been impacted by cyclical packaging demand concerns. However, it remains well positioned to deliver double-digit EPS growth from Berry synergies alone. On this basis, its single-digit P/E appears attractive.

Finally, Wilsons thinks copper miner Sandfire Resources Ltd (ASX: SFR) is an ASX 200 share that offers an attractive risk/reward following recent weakness in the mining sector. It commented:

The broader mining sector has sold off on cyclical growth concerns. While uncertainty remains elevated, miners appear well placed to rebound if the conflict de-escalates over the next few weeks. Within the sector, Sandfire Resources (SFR) offers an attractive risk/reward, supported by tight copper fundamentals, structural demand tailwinds, and valuation upside.

The post 5 oversold ASX 200 shares to buy according to Wilsons appeared first on The Motley Fool Australia.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 set to rise

The Australian share market looks set to rise again on Thursday following a good night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 22 points or 0.25% higher this morning. In late trade in the United States, the Dow Jones is up 0.6%, the S&P 500 is up 0.55% and the Nasdaq is 0.75% higher.

Soul Patts shares on watch

Washington H. Soul Pattinson and Co Ltd (ASX: SOL) shares will be on watch on Thursday. That's because the investment house will be releasing its half-year results before the market open. These will be the company's first results since the transformational $14 billion merger with Brickworks. That deal was stated to be "cash flow and post-tax NAV accretion on a per share basis."

Oil prices fall

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a subdued session on Thursday after oil prices fell overnight. According to Bloomberg, the WTI crude oil price is down 1.7% to US$90.81 a barrel and the Brent crude oil price is down 1.8% to US$102.57 a barrel. This has been driven by optimism that a US-Iran peace deal could be on the horizon.

Shares named as buys

The team at Wilsons has identified a number of shares that it thinks are buys after being oversold. They include Pinnacle Investment Management Group Ltd (ASX: PNI), Hub24 Ltd (ASX: HUB), and Cochlear Ltd (ASX: COH). It said: "Pinnacle (PNI) and HUB24 (HUB) trade below five-year average P/E multiples while retaining strong structural growth and offering meaningful leverage to an eventual equity market recovery. Cochlear (COH) trades at a decade-low P/E, with its Nexa product cycle supporting medium-term earnings acceleration."

Gold price rises

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good session on Thursday after the gold price pushed higher overnight. According to CNBC, the gold futures price is up 2.4% to US$4,508.8 an ounce. A pullback in oil prices has eased inflation and higher interest rate fears.

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

We can't say what will happen in the next few weeks. But, I think the experience after 2020 and 2022 shows that the market is probably looking for good news to recover.

With US President Trump indicating he's keen to make a deal with Iran, this could be a great time to invest in the following businesses.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is invested in a portfolio of funds management businesses that generally have a long track record of delivering stronger returns than their benchmarks.

It's understandable that a fall in share markets has led to a 14% drop in the Pinnacle share price over the past month, given the likely painful impact on funds under management (FUM).

But, due to the cyclical nature of the share market volatility, I believe there will be a recovery down the line.

Plus, Pinnacle's affiliates have collectively experienced billions of dollars in net inflows each financial year, which is a strong tailwind for longer-term FUM growth, even if FY26 earnings are impacted. I'm hopeful the company will add to its affiliate portfolio over the coming years.

I think this sell-off is an opportune time to invest in this ASX share, given market confidence is low.

Using the forecast on Commsec, the Pinnacle share price is valued at 20x FY26's estimated earnings.

Sigma Healthcare Ltd (ASX: SIG)

Australia's growing and ageing population is a strong tailwind for businesses involved in the healthcare industry.

Sigma is the owner of Chemist Warehouse, Australia's leading chemist business, along with other companies in the chemist industry.

Impressively, Chemist Warehouse is seeing network sales growth in the mid-teens, while its international sales are growing even faster.

The business is generating strong same-store sales growth, while also expanding its store network in Australia, New Zealand and Ireland.

Growing scale can help improve the company's profit margins, as we're seeing in its financials. In HY26, it reported revenue growth of 14.9%, normalised operating profit (EBIT) growth of 18.7% to $582.9 million, and normalised net profit growth of 19.2% to $392 million.

It's a great sign when each profit line is rising faster than the one before it. Investors usually value a business based on its net profit, so Sigma is demonstrating pleasing characteristics.  

I think the business is capable of adding dozens of new Chemist Warehouses to its global network in the coming years, which should be a strong tailwind for shareholder returns.

According to Commsec, the Sigma Healthcare share price is valued at 42x FY26's estimated earnings.

L1 Group Ltd (ASX: L1G)

This is a fund manager that offers a range of investment strategies that have performed strongly for investors across ASX shares, international shares, gold, and more.

After taking over Platinum, the business has hit the ground running on the ASX. It's planning to list a gold-listed investment company (LIC) soon, and its other LICs' performances have been excellent in recent times (though past performance is not a guarantee of future performance).

In the FY26 half-year result, the company reported underlying revenue growth of 23% to $145.1 million, underlying operating profit (EBITDA) growth of 61% to $94.9 million and underlying net profit after tax (NPAT) growth of 63% to $66.3 million.

I'm a fan of how L1 invests in its funds with a contrarian mindset and a focus on businesses with lower price-to-earnings (P/E) ratios.

I expect the business will launch additional funds over time, while organic investment performance can help FUM grow naturally as well.

I think this investment outfit is one of the most impressive in Australia and is worth owning for the long term.

The post 3 ASX shares to buy for magnificent long-term growth! appeared first on The Motley Fool Australia.

It's not often that share prices go through a decline of 10% or more. Widespread selling is painful as a shareholder but there are lower valuations (almost) across the board for brave prospective investors.

Sell-offs give us the chance to search across the S&P/ASX 300 Index (ASX: XKO) (or smaller) to find beaten-up opportunities which could then bounce back when market confidence returns.

Assuming the investment still has a positive long-term outlook, a large decline is a great opportunity to see big returns if/when there's a recovery.

For example, if a share price drops by 50%, then returning to the previous position would be a return of 100%! Of course, it's not as easy as that to find the right opportunities. I'd only go for investments I believe can deliver higher earnings in three years from now.

Where I'm seeing exciting ASX share opportunities

In my view, there are multiple areas where the market is being too bearish on certain ASX shares.

The ASX tech share (and tech-related) space is awash with names that have been hit by AI worries, then hit again by the prospect of inflation and higher interest rates. I'm thinking of names like Siteminder Ltd (ASX: SDR), TechnologyOne Ltd (ASX: TNE), Xero Ltd (ASX: XRO), REA Group Ltd (ASX: REA) and Pro Medicus Ltd (ASX: PME).

Businesses in the funds management space are certainly feeling the pain of lower share markets, as well as a hit to market confidence. I think the businesses of Pinnacle Investment Management Group Ltd (ASX: PNI), L1 Group Ltd (ASX: L1G) and Australian Ethical Investment Ltd (ASX: AEF) are very compelling options right now.

The ASX retail share space is appealing as well because market confidence in them can be cyclical. I think growing retail businesses could be particularly good long-term investments during this period, such as Temple & Webster Group Ltd (ASX: TPW), Lovisa Holdings Ltd (ASX: LOV), Universal Store Holdings Ltd (ASX: UNI) and Nick Scali Ltd (ASX: NCK).

Finally, I want to highlight some other ASX growth shares that have been caught up in the sell-off but could be generate significantly higher profit in three to five years. I'm attracted to Breville Group Ltd (ASX: BRG), Sigma Healthcare Ltd (ASX: SIG), Tuas Ltd (ASX: TUA) and Guzman Y Gomez Ltd (ASX: GYG).

The post Why buying ASX shares in March could supercharge your wealth appeared first on The Motley Fool Australia.

While this type of volatility is not unusual, some sectors have felt the pressure more than others. In particular, non-bank financials have had a challenging period, with several high-quality names seeing meaningful share price declines.

Two examples are Pinnacle Investment Management Group Ltd (ASX: PNI) and Netwealth Group Ltd (ASX: NWL). Over the past 12 months, their share prices have fallen more than 27% and 20%, respectively.

For long-term investors, periods like this often spark discussion around contrarian thinking. When sentiment turns negative, it can sometimes push share prices below what the underlying business performance might justify. That doesn't automatically mean value is present — but it can create a reason to look more closely.

So, how are these two businesses actually performing beneath the surface?

Inflows climbing

Pinnacle operates a multi-affiliate funds management platform. Rather than managing all assets directly, it takes equity stakes in specialist investment boutiques (known as affiliates) and earns a share of their fees and profits.

This model allows Pinnacle to scale across asset classes and geographies while remaining relatively capital-light.

Recent results suggest the underlying business continues to grow, even as performance fees fluctuate. Funds under management (FUM) reached $202.5 billion, up 13%, supported by record net inflows of $17.2 billion for the half.

Importantly, core earnings appear resilient. Pinnacle reported strong growth in its share of affiliate profits (excluding performance fees), with underlying net profit (NPAT) also rising solidly versus the prior period.

The variability comes from performance fees, which declined compared to the previous corresponding period — highlighting the cyclical nature of earnings in funds management.

Strategically, the business continues to expand globally, with increasing exposure to international markets and private assets, alongside new investments such as its stake in Pacific Asset Management.

Improving profitability 

Netwealth is a platform provider offering technology, administration, and investment solutions to financial advisers and their clients. It generates revenue primarily from fees linked to funds under administration (FUA) and from transaction and ancillary services.

The structural tailwinds behind the business — including the shift towards platform-based investing and independent advice — remain firmly in place.

Recent results highlight strong operational momentum. Netwealth reported FUA of $125.6 billion, up 23.6% year on year, alongside total income growth of 24.7% to $193.8 million.

Profitability also improved, with operating earnings (EBITDA) rising 23.9% and net profit after tax increasing nearly 20%.

Revenue growth has been broad-based, with platform revenue climbing 25.3%, supported by growth across administration, transaction, and ancillary fees.

The company continues to benefit from strong inflows and adviser growth, with custodial inflows of $16.4 billion for the half and expanding market share in the platform sector.

Management remains focused on investing in technology and product capability, including AI-driven enhancements, to support long-term growth and adviser productivity.

Foolish takeaway

Despite notable share price declines over the past year, both Pinnacle and Netwealth appear to be delivering solid underlying business performance.

Pinnacle's growth continues to be driven by inflows and its scalable affiliate model, while Netwealth is benefiting from structural industry shifts and strong platform growth.

As always, markets can sometimes weigh short-term uncertainty more heavily than longer-term fundamentals. If these companies can continue to grow revenue and earnings over time, a shift in sentiment could eventually see valuations move higher again.

Whether that plays out — and over what timeframe — remains something investors will be watching closely.

The post 2 beaten-down ASX financial stocks worth a closer look appeared first on The Motley Fool Australia.

The Reserve Bank of Australia said the board decided to raise rates due to a recent inflation uptick and higher oil prices resulting from the war.

This was the second rate rise of 2026 so far, with the cash rate now 4.1%. The RBA also lifted rates by 0.25% last month.

In a statement, the board said:

While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025. Information since the February meeting suggests that some of the increase in inflation reflects greater capacity pressures.

In addition, the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation. Short-term measures of inflation expectations have already risen.

As a result, the Board judged that there is a material risk that inflation will remain above target for longer than previously anticipated.

The RBA's inflation target band is 2% to 3%, and the board is aiming to reach 2.5% over time.

While the ASX All Ords index gained value yesterday, several shares tumbled to 52-week lows.

Do they present a buying opportunity? Let's find out.

ASX All Ords shares trading at 52-week lows

Megaport Ltd (ASX: MP1)

The Megaport share price fell to a 52-week low of $7.26 on Tuesday.

The ASX All Ords tech share is down 26% over 12 months.

This month, Canaccord Genuity retained its buy rating with a 12-month price target of $14.30.

Citi also kept its buy rating on the ASX All Ords tech share; however, it reduced its target from $15.75 to $14.65.

This implies a more than 100% potential upside from yesterday's low.

Pinnacle Investment Management Group Ltd (ASX: PNI)

The Pinnacle Investment Management Group share price fell to a 52-week low of $13.15 yesterday.

Morgans sees the valuation tumble for this investment management company as a buying opportunity.

The broker upgraded the ASX All Ords financial share from accumulate to buy last month after reviewing the company's 1H FY26 results.

Morgans said:

PNI's 1H26 NPAT (~A$67m, -11% on the pcp) came in -4% below consensus, but it was more in line excluding one-offs (e.g. mark-to-market investment impacts).

Overall, we saw the 1H26 result as compositionally stronger than the headline numbers suggested, and positively accompanied with a move-the-dial acquisition.

The broker reduced its 12-month share price target from $26.30 to $23.21.

This suggests a potential 77% upside from the stock's 52-week low on Tuesday.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price fell to a 52-week low of $6.41 yesterday.

The ASX All Ords retail share is down 61% over 12 months.

Last week, Macquarie reiterated its buy rating on Temple & Webster shares with a price target of $13.70.

This implies a potential capital gain of 110% over the next 12 months.

Bell Potter also has a buy rating with a $13 price target on the ASX All Ords retail share.

The post Are these 3 ASX shares at 52-week lows going cheap? appeared first on The Motley Fool Australia.

From infrastructure operators to financial services companies and real estate investment trusts, there are many businesses that generate reliable cash flows and return a large portion of those earnings to shareholders through dividends.

For investors looking to build a portfolio that produces steady income, here are three ASX income stocks that I think are worth considering right now.

Transurban Group (ASX: TCL)

Transurban is one of the most well-known infrastructure companies on the ASX and a favourite among income investors.

The company owns and operates major toll roads across Australia and North America. These assets are essential pieces of infrastructure that generate steady revenue from millions of drivers each year.

What I like about Transurban's business model is its predictability. Its toll roads operate under long-term concession agreements that allow toll prices to increase regularly.

Combined with higher traffic volumes from population growth and urbanisation, this has historically supported consistent earnings and distribution increases.

Because of this, Transurban has been able to deliver dependable income to investors over long periods and I expect this trend to continue in the future.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is a diversified investment management company that partners with a range of specialist fund managers.

Rather than running a single asset management business, Pinnacle provides distribution, operational, and strategic support to its affiliated investment boutiques. In return, it earns a share of the fees generated by those managers.

This model gives Pinnacle exposure to multiple investment strategies and markets, which can help diversify its earnings.

As funds under management grow across its affiliates, the company's earnings can increase as well. That growth has allowed Pinnacle to steadily increase its dividends over time.

For income investors who want exposure to the asset management sector, Pinnacle offers a combination of dividend income and long-term growth potential.

Dicker Data Ltd (ASX: DDR)

Dicker Data is one of Australia's leading technology distributors.

The ASX income stock acts as a key link between major global technology vendors and thousands of resellers across Australia and New Zealand. Its partners include some of the biggest names in the technology industry.

Despite operating in the technology sector, Dicker Data's business model is surprisingly stable. The company earns relatively small margins on a very large volume of product sales, which can produce steady cash flows.

That strong cash generation has allowed Dicker Data to build a reputation as a reliable dividend payer.

For investors seeking income, the company's consistent payouts and established market position make it an appealing option to consider.

Foolish takeaway

Reliable dividend income often starts with owning businesses that generate consistent cash flow.

Transurban's infrastructure assets, Pinnacle's growing funds management platform, and Dicker Data's established distribution network each support strong earnings and shareholder payouts.

Because of that, these three companies are among the ASX income stocks that I think are well worth a closer look right now.

The post 3 of the best ASX income stocks to buy now appeared first on The Motley Fool Australia.

Compounding is a very powerful financial force that helps businesses grow into larger ones over time.

It's very easy to underestimate the power of compounding. For example, you'd think it'd take around a decade for an investment to double in value if it's growing at an average of 10% per year. But, it actually takes less than eight years to double.

Growing even faster than 10% can deliver significant compounding. I think the below three ASX growth shares are very good prospects for delivering solid net profit growth and I'd happily invest $20,000 into them.

Tuas Ltd (ASX: TUA)

Tuas is a rapidly-growing Singaporean telco. At its annual general meeting (AGM), the business reported it had reached 1.34 million active mobile subscribers and 36,200 active broadband services.

I'm confident the business can continue gaining market share in Singapore with its value-focused offerings. More users means more operating leverage as its costs are spread across a greater number of subscribers.

The ASX growth share is becoming increasingly profitable – in the first quarter of FY26 it made $9.1 million of net profit, which is more profit than it made in the entire 2025 financial year (of $6.9 million). It also made $44.2 million of revenue and $19.9 million of operating profit (EBITDA) in the first quarter of 2026.

With the bonus of the acquisition of Singapore competitor M1 on the horizon to boost its scale, I think Tuas' profit outlook is very compelling. If it can successfully expand beyond Singapore to other Asian countries then it could have an even stronger growth outlook.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Pinnacle is a leading business in the investment world. It has invested in stakes in a number of funds management businesses including Hyperion, Plato, Palisade, Resolution Capital, Solaris, Antipodes, Spheria, Firetrail, Metrics, Coolabah, Aikya, Five V, Life Cycle and Pacific Asset Management.

It's not just a passive investor in these businesses, it helps them grow with services like seed funds under management (FUM), distribution and client services, middle office and fund administration, compliance, finance, legal, technology and other important infrastructure.

The FY26 half-year result saw net profit decline 11%, but that was only because of a reduction in performance fees generated (which are not likely to grow every year). Excluding performance fees, Pinnacle's half-year net profit increased 37% year-over-year and 11% half-over-half.

Its FUM may have reduced during the last few months because of the volatility, but the 33% drop of the Pinnacle share price since October 2025 looks like a great time to invest to me.  

Nick Scali Ltd (ASX: NCK)

Nick Scali is one Australia's largest furniture retailers through its Nick Scali and Plush brands.

Rising inflation and the prospect of higher interest rates may be causing the market to push the Nick Scali share price. At the time of writing, it's down around 38% since the high in January 2026.

This looks like a great time to invest because the company is increasing its growth potential with its expansion in the UK. It's rebranding the Fabb Furniture stores in the UK to Nick Scali stores.

The UK has a much larger population than Australia, giving the ASX growth share a large addressable market to target. Additionally, Nick Scali can sell its own furniture in the rebranded Nick Scali UK stores, which comes with a significantly higher gross profit margin.

If Nick Scali can continue adding to its ANZ and UK store networks, it can grow sales and net profit, even if sales at existing stores don't grow as fast in 2026 as 2025.

The FY26 half-year result saw the company grow its total net profit by 36.4% to $41 million, while underlying net profit increased 23.1% on revenue growth of 7.2%, showing its ability to deliver rising margins.

The post Where I'd invest $20,000 into ASX growth shares right now appeared first on The Motley Fool Australia.

To narrow things down, let's take a look at two that Morgans is bullish on right now.

Here's what the broker is recommending to clients:

CAR Group Limited (ASX: CAR)

This auto listings company has been named as a buy by analysts at Morgans.

It feels that its shares are trading at a level that has created an attractive entry point for investors. The broker said:

CAR's 1H26 result was strong overall, in our view, and was largely in line with consensus (Visible Alpha) expectations. CAR reported double-digit percentage revenue and EBITDA growth in its key offshore markets (North America, Latam and Korea), whilst Australia revenue growth remained sound (~+8% vs the pcp). We make minor changes to our FY26 assumptions.

CAR is trading on ~22x FY27F PE, which we view as an attractive entry point given its double-digit EPS growth profile. We move to a BUY recommendation with a $35.20 PT.

Morgans expects fully franked dividends of 89.5 cents per share in FY 2026 and then 99 cents per share in FY 2027. Based on the current share price of $25.69, this would mean dividend yields of 3.5% and 3.9%, respectively.

Pinnacle Investment Management Group Ltd (ASX: PNI)

Another ASX dividend share that has been named as a buy is investment management company Pinnacle.

While its half-year results were softer than expected, the broker remains positive and sees lots of value in its shares at current levels. It said:

PNI's 1H26 NPAT (~A$67m, -11% on the pcp) came in -4% below consensus, but it was more in line excluding one-offs (e.g. mark-to-market investment impacts). Overall, we saw the 1H26 result as compositionally stronger than the headline numbers suggested, and positively accompanied with a move-the-dial acquisition.

We reduce FY26F EPS by -7% on a softer-than-expected 1H26 "reported" result, and dilution from the PAM equity issue. Conversely, FY27F EPS rises +8% on PAM earnings benefits and a broader review of our assumptions. Our price target falls to A$23.21 (from A$26.30). We move to a BUY recommendation (previously Accumulate) with >20% upside existing to our PT.

Morgans is forecasting fully franked dividends of 63 cents per share in FY 2026 and then 80 cents per share in FY 2027. Based on its current share price of $15.10, this would mean dividend yields of 4.2% and 5.3%, respectively.

The post 2 buy-rated ASX dividend shares for income investors in March appeared first on The Motley Fool Australia.

When a share price falls, it leads to a higher dividend yield. For example, if a business with a 4% dividend yield sees a share price drop of 10%, the yield becomes 4.4%. There are some businesses that have fallen further than that and look like appealing ideas.

If I were given $10,000 to invest for passive income, these are some of the names I'd go for.

Pinnacle Investment Management Group Ltd (ASX: PNI)

It's understandable that Pinnacle has suffered a significant decline because of the type of business it is.

Pinnacle takes stakes in fund managers, meaning management fees (from funds under management (FUM)) and performance fees are key aspects of Pinnacle's profit generation.

I don't know how Pinnacle's aggregate FUM has changed during this period, but I'm optimistic that FUM will grow in the long term, particularly from this lower starting point, thanks to regular net inflows and the long track record of funds management outfits (affiliates) like Plato, Hyperion, Firetrail and Coolabah.

I also believe that the ASX dividend stock could expand its fund manager portfolio with new investments in the coming years – this could be a useful time to do so.

Using the dividend forecast on CMC Invest, it could pay a grossed-up dividend yield of more than 7% in FY27, at the time of writing.

L1 Long Short Fund Ltd (ASX: LSF)

L1 Long Short Fund is a listed investment company (LIC) that utilises long-term investing and short-selling to try to generate returns for shareholders.

The LIC could be a smart ASX dividend stock to buy because of its ability to make returns whether the market is going up or down.

The ASX dividend stock points out how, over 51 'ASX down market' months, its long-short strategy has delivered an average return of negative 0.2%, compared to an average decline of 3.1% for the S&P/ASX 200 Accumulation Index (ASX: XJOA). Of course, past performance is not a guarantee of future performance.

Its average return in positive ASX months has been almost the same as the benchmark.

I like how a lot of the strategy's returns have come from sectors like materials, industrials and communication services – areas that I don't typically invest in for my own portfolio.

If the business continues growing its payout at the pace it has during FY26 to date, I expect the 2026 financial year grossed-up dividend yield could be 4.9%, including franking credits.

Centuria Industrial REIT (ASX: CIP)

The final ASX dividend stock I want to highlight is this real estate investment trust (REIT) which owns a portfolio of quality industrial properties across metropolitan Australian locations. It owns properties like logistics and distribution facilities, refrigerated warehouses, data centres and so on.

The ASX dividend stock has significant rental income locked in because it has a weighted average lease expiry (WALE) of approximately seven years with high-quality tenants.

Centuria Industrial REIT says that its portfolio is on average 20% under-rented, so as new rental contracts come up for renewal, I'm expecting a significant boost to rental income, which could then help accelerate distribution growth.

The business expects to grow its rental earnings per security by up to 6% in FY26 and the distribution is guided to increase by 3%, translating into a forward distribution yield of 5.4%, at the time of writing.

The post The smartest ASX dividend stocks to buy with $10,000 right now appeared first on The Motley Fool Australia.

As we approach the end of the first quarter, the index provider has just revealed the changes that it will be making to the ASX 200 index effective prior to the open of trading on Monday 23 March.

This has seen three ASX 200 shares dumped from the benchmark index.

Which ASX 200 shares are being dumped?

According to the release, sports technology company Catapult Sports Ltd (ASX: CAT), data centre operator DigiCo Infrastructure REIT (ASX: DGT), and pharmacy wholesaler EBOS Group Ltd (ASX: EBO) are leaving the ASX 200 index later this month.

They are being kicked out after their share prices dropped to a level that took them below the threshold required to remain in the index.

Catapult shares are down almost 40% over the past six months, giving the company a market capitalisation of $1.23 billion.

DigiCo Infrastructure REIT shares are down 50% since this time last year, dragging its market capitalisation to $1.12 billion.

Finally, New Zealand-based EBOS' shares are down almost 44% over the past 12 months. However, its exit could be more due to relative liquidity (tradability), rather than market capitalisation.

Which shares are joining the index?

S&P Dow Jones Indices has named gold miner Predictive Discovery Ltd (ASX: PDI), engineering and construction services provider SRG Global Ltd (ASX: SRG), and lithium developer Vulcan Energy Resources Ltd (ASX: VUL) as their replacements.

Predictive Discovery shares are up 185% over the past 12 months, lifting its market capitalisation to $2.41 billion.

SRG Global's shares have risen by 120%, giving it a market capitalisation of $1.7 billion.

Finally, Vulcan Energy Resources shares are only up 11% since this time last year but have a market capitalisation of $1.73 billion and a much stronger balance sheet than a year ago.

What other changes are being made?

Northern Star Resources Ltd (ASX: NST) shares are joining the exclusive ASX 20 index in place of Santos Ltd (ASX: STO).

Light & Wonder Inc (ASX: LNW) and PLS Group Ltd (ASX: PLS) are joining the ASX 50 index, with TechnologyOne Ltd (ASX: TNE) and Seek Ltd (ASX: SEK) heading out.

Lastly, gold miners Greatland Resources Ltd (ASX: GGP), Regis Resources Ltd (ASX: RRL), and Westgold Resources Ltd (ASX: WGX) are being added to the ASX 100 index. They are replacing Lendlease Group (ASX: LLC), Netwealth Group Ltd (ASX: NWL), and Pinnacle Investment Management Group Ltd (ASX: PNI).

The post 3 shares dumped from the ASX 200 index (and 3 new additions) appeared first on The Motley Fool Australia.

I'm not about to suggest that Aussies go out there and try to find a 15% dividend yield.

But, if we invest right, investors could end up generating a 15% yield on their initial investment. It will take some patience, though.

It's important to remember that some large dividend yields may not stand the test of time. A dividend cut may be on the cards for businesses that seem to have huge yields because investors have pushed the share price lower, betting that earnings and the payout are going to drop in the near future.

 I think there are two ways where we can unlock a large dividend yield of 15% (or more). Let's look at how.

Big starting dividend yield

I wouldn't expect any business to offer a sustainable starting dividend yield of 15%. But, there are some with yields of between 9% to 11% where I expect the business can maintain and slowly grow its payout in the coming years.

While it might take a while to reach 15%, I think this sort of business could deliver a big dividend yield at the start and become even larger over time.

There are some names that come to mind for large payouts such as WAM Microcap Ltd (ASX: WMI), Hearts and Minds Investments Ltd (ASX: HM1) and Shaver Shop Group Ltd (ASX: SSG).

With those sorts of dividend yields, if someone invested $10,000 then they could unlock $1,000 of annual income straight away.

Dividend growth

While huge yields may appeal to some investors, it could be a better call to look at businesses that are growing their payout at a faster pace. That could lead to stronger total shareholder returns (TSR) and eventually the yield could surpass what a higher-yielding business offers.

For example, if a 10% yielding business grows its payout by 2% per year, it becomes 15% yield in around 20 years. A business with a 5% dividend yield that's growing the payout at 10% per year becomes a 15% dividend yield on the initial investment after 12 years.

Of course, we can't know for sure what businesses are going to do with their payouts over the next decade or more.

What sort of businesses have a solid starting payout today and could deliver strong dividend growth over the longer-term?

I'd look at apparel retailer Universal Store Holdings Ltd (ASX: UNI), jewellery retailer Lovisa Holdings Ltd (ASX: LOV), investments business Pinnacle Investment Management Group Ltd (ASX: PNI) and ethical fund manager Australian Ethical Investment Ltd (ASX: AEF).

Either way, I think there are some very exciting investments out there for investors looking for a lot of passive income.

The post How to invest $10,000 to aim for a 15% dividend yield appeared first on The Motley Fool Australia.