Do you invest in dividend-paying shares in the hunt for income, or do you look to term deposits, which are now paying a decent rate of return?

The safe option

Looking at term deposits to begin with, there are a couple of benefits to investing in term deposits over investing in shares.

The most obvious of these is capital preservation. At the end of your term, you'll be repaid your initial investment plus your interest, unless something has gone catastrophically wrong with our banking system in the meantime.

And, naturally, you also have a clear idea of what sort of return you will get.

Even the most solid ASX-listed company can be thrown off course by external or internal events, leading to dividend cuts or share price crashes.

With your money in a term deposit, you can sleep easy.

Savings accounts are also a decent earner at the moment

And it's not just term deposits, with rates on high-interest savings accounts actually outperforming term deposits at the moment, at least over short periods, according to the most recent data from Canstar.

A Bankwest Easy Saver account currently offers an introductory rate of 6% for four months before reverting back to 5.25%.

In contrast, the top-ranked term deposit from Judobank pays 5.65% over a period of 10 months.

Shares can deliver better returns, and capital gains

While term deposits or savings accounts are nice and secure, if you select a group of stocks properly, you should be able to generate a better return than the 5.65% offered by term deposits.

One of the main reasons for this is franking credits.

When you are paid your 5.65% for your term deposit, you pay tax on the whole amount at your marginal rate.

A fully franked share, however, which was paying out 5.65%, would also come with a 30% tax credit, meaning you'll pay less tax on that 5.65%.

This is particularly lucrative for some retirees who earn below the effective tax-free threshold for their age from their investments.

In this case they would receive a cash refund equal to the amount of tax paid.

Which stocks to buy in the search for income?

When it comes to building a portfolio, I'd start by deciding not to allocate more than 25% of investments in any one sector.

While it can be tempting to invest in hot sectors, the turbulence in the AI-exposed stocks on the ASX over the past few months shows just how difficult this can be to do well.

Since this portfolio aims for dividend returns, I'm going to avoid high-growth technology stocks entirely, as well as biotechnology and resource companies in the development phase.

The sectors I will focus on are financials, infrastructure, energy, property and retail.

Banks deliver stable, if unexceptional returns

Among the financials, big banks are a reliable source of income.

Westpac Banking Corporation (ASX: WBC), which released its full-year results this week, has increased its dividend every year since the Covid pandemic.

The bank is now paying a 4.18% dividend and, according to CMC Invest data, has delivered a total shareholder return of 18.6% over five years and 7.2% over 10 years.

This week's $6.8 billion profit was down 1% from the previous year.

Fellow bank National Australia Bank Ltd (ASX: NAB) reported its full-year results just yesterday, 5 November, and kept its dividend steady at 85 cents per share, giving the bank a 4.16% dividend yield, fully franked, according to data from the ASX website.

The bank's results could best be described as steady, with revenue up 5.8%, and net profit down 9.1% to $6.14 billion, while underlying net profit grew 6.9%.

Large, steady income streams

Now let's turn our attention to infrastructure. I'm a big fan of infrastructure stocks as they tend to have long investment horizons, and come with a degree of certainty around revenues.

They can carry a lot of debt, though, which is challenging in a high-interest-rate environment.

One infrastructure company with a decent, partially franked dividend is APA Group Ltd (ASX: APA).

The gas pipeline company has given guidance for FY27 of 59 cents per share in dividends, which equates to a 5.3% yield.

APA has delivered an impressive 28.7% total shareholder return over the past year and 9.3% over the past decade.

Toll roads operator Transurban Group Ltd (ASX: TCL) has also delivered reasonable, though unexceptional, returns of 7.5% over 10 years, but again the company's dividend has been growing steadily since the pandemic.

Transurban is currently trading on a trailing dividend of 4.84%, unfranked.

Morgan Stanley is expecting the dividend to increase from 69 cents per share in FY26 to 81.1 cents per share in FY29.

In the energy sector, Woodside Energy Group Ltd (ASX: WDS) is currently trading on a 5.01% yield, fully franked, and has flagged the potential for higher payouts.

The company held its capital markets day yesterday, announcing a new distribution policy of 20%-40% of operating cash flows, with a base level of 20%.

Up to another 20% would be available for additional dividends or share buybacks, the company said.

Property earns its place in this portfolio

The real estate investment trust (REIT) sector can be a good source of high dividends, although they tend to be unfranked.

The Charter Hall Long WALE REIT (ASX: CLW) pays a 7.34% yield and offers quarterly dividends.

HomeCo Daily Needs REIT (ASX: HDN) is paying 7.44% and also pays quarterly dividends.

The last stock I would include is from the retail sector, which might seem high-risk, but this company has a strong recent track record of business growth and dividend payments.

The youth-focussed retailer Universal Store Holdings Ltd (ASX: UNI) is paying a trailing dividend of 5.58% fully franked.

The yields of all these stocks, assuming an equal investment of your $50,000 in each and averaging them, give a yield of 5.48%.

This, however, does not include the tax benefits that accrue from the fully franked stocks.

Foolish takeaway

As you can see, a diverse portfolio of stocks can deliver returns equivalent to or greater than a term deposit.

The trade-off is that you are taking on extra risk, but gaining potential upside.

What suits you personally will depend on your tolerance for risk.

The post How I'd build a $50,000 ASX200 dividend portfolio paying more than a term deposit appeared first on The Motley Fool Australia.

The average estimated weekly income for full-time Australian adult workers is $2,083.70 (or $108,352 per year), according to the latest Australian Bureau of Statistics (ABS) figures.

The financial rule of thumb is that you'll need around 70% of your pre-retirement yearly income (assuming you own your home outright with no mortgage) to maintain that same lifestyle when you retire. It's called the 70% thumb rule.

Around 70% of the average $108,352 annual income comes to $75,846.

This is what it'll cost for the average retiree to maintain the same lifestyle once they've quit working.

The most common way for individuals to finance that amount of money is drawing down their superannuation balance.

But it's not the only option.

Instead of steadily drawing down on your superannuation capital to cover retirement lifestyle expenses, what if you could earn enough passive income to cover your living expenses alone?

The best part is, you could use your superannuation balance to generate the income for you. 

By investing your retirement savings, you're letting your total balance keep compounding, and when you move to the retirement phase, you can live off the income it generates instead.

Here's how it works.

How much do I need in my superannuation to generate $76,000 per year in passive income?

To work it out, you'll need to divide your annual passive income by the overall dividend yield of your superannuation portfolio.

But unfortunately, it's not quite as simple as it looks. The outcome varies significantly depending on what your dividend yield is.

The general rule is, as the dividend yield of your portfolio increases, the superannuation balance you need to earn the same passive income goes down.

But investments with a higher yield often come with higher risk. 

So, you'll need to work out where your risk-reward balance is.

Break it down for me by yield. What do I need in my superannuation?

Let's look at mid-range dividend yields around 3% to 6%, as an example.

If your overall portfolio has a dividend yield of around 3%, you'll need a superannuation balance of around $2.53 million. That's because $76,000 ÷ 3% = $2,533,333.

Raise your yield closer to 4%, and you'd need a superannuation balance of around $1.9 million. Or in other words, $76,000 ÷ 4% = $1,900,000.

If your portfolio yield is a little higher, at around 5%, your balance will need to be closer to $1.52 million to earn the same amount.

Raise that to 6%, and you'll need around $1.27 million to earn the same $76,000 annual passive income.

Give me some suggestions of ASX shares which yield around these levels

There is a wide range of high-quality shares on the ASX that yield around these levels.

These are my top picks right now.

If your superannuation balance is on the higher side and you want less risk, you might be happy with a 3% yielding portfolio. ASX shares around this level include major blue-chip stocks like conglomerate Wesfarmers Ltd (ASX: WES) and dividend royalty Washington H. Soul Pattinson and Co Ltd (ASX: SOL).

For 4% yielding options, I'd look towards major blue chips in the mining or banking sectors. BHP Group Ltd (ASX: BHP), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ) all yield around the 4% level at the time of writing.

If you're happy to take on a little more risk for more reward, then you might want to consider 5% or 6% yielding shares. Again, there are lots of options. Some of my favourites are Woodside Energy Group Ltd (ASX: WDS), APA Group (ASX: APA), Transurban Group (ASX: TCL), Origin Energy Ltd (ASX: ORG), and AGL Energy Ltd (ASX: AGL).

A final note

Remember that not every ASX share in your portfolio needs to yield the same amount. 

Ideally, you want a diverse portfolio of shares with varying yields to protect it from volatility and share price risk.

You also don't need to invest the whole sum in one go. Start with regular monthly investments and let compounding do some of the heavy lifting.

The post How much superannuation do I need to generate $76,000 per year in passive income? appeared first on The Motley Fool Australia.

The most recent figures from the Association of Superannuation Funds of Australia (ASFA) indicate that the median amount of superannuation for men aged 60 to 64 is just $236,126, while for women it's $174,655.

These numbers are well short of what they'd need to be to generate $80,000 per year.

That's not to deter you from aspiring to that goal; more so, it's a call to get planning early so that your goal can be achieved.  

So how much superannuation do you need to generate $80,000 per year?

When it comes to figuring out how much passive income you will receive from your superannuation, it pays to know what sort of return is realistic.

A good benchmark is the Vanguard Australian Shares Index ETF (ASX: VAS), which aims to track the return of the S&P/ASX 300 Index (ASX: XKO).

The VAS ETF has returned 8.95% per year over the past 10 years, made up of 4.31% in dividends and 4.64% in capital growth.

If you were aiming to generate $80,000 per year from a portfolio returning 8.95% per year, you would need to have $893,854 in superannuation savings.

Looking at the calculations from a dividends-only perspective, I suggest a return of 7.5% is achievable once franking credits are factored in.

Franking credits pay shareholders back a credit for the tax which a company has already paid on earnings, which for retirees who are paying no tax means a cash windfall.

In practice, it means a 5% dividend yield increases to a grossed-up amount of 7.14%.

If you are able to generate a 7.5% return, you would need a superannuation balance of $1.066 million.

As you can see, this is well above the amount most people have at age 60.

Which companies are worth looking into for dividend payments?

In terms of companies which might generate the sort of returns you're after, infrastructure can be a good place to start.

Gas pipelines company APA Group (ASX: APA) is paying a trailing yield of 5.15%, while toll roads operator Transurban Group Ltd (ASX: TCL) is paying 4.99%, and Atlas Arteria Ltd (ASX: ALX) is paying 10.78%.

Oil and gas major Woodside Energy Group Ltd (ASX: WDS) is paying 4.89% while Origin Energy Ltd (ASX: ORG) is paying 4.91%.

Among the listed real estate companies, Arena REIT (ASX: ARF) is paying 7.15% while HomeCo Daily Needs REIT (ASX: HDN) is paying 7.64%.

As you can see, there are various options in terms of shares that pay high dividends among well-established names on the ASX.

The post How much superannuation is needed for $80,000 a year in passive income? appeared first on The Motley Fool Australia.

What did Transurban report?

• US$21 billion present value in payments to Tennessee Department of Transportation (TDOT) over the concession life
• US$7.7 billion in construction period payments between 2027 and 2033
• Revenue-sharing mechanism with TDOT starts if returns exceed base case
• Maximum leverage capped at 75% debt to 25% equity, as per TIFIA term sheet
• Toll-rate sharing with TDOT for per-mile tolls above US$3.20 (in 2025 dollars)

What else do investors need to know?

The I‑24 Choice Lanes Project, reached through the DriveTN Consortium, marks Transurban's latest major move in the US managed lanes market. The concession agreement ensures that all construction and operating payments to TDOT maintain investment-grade status, and payments beyond a threshold will be discounted at a higher rate.

Transurban expects to use its existing balance sheet capacity to fund its equity share over time. The group's final gearing and capital structure will be set at financial close, expected on or before July 2027. The deal also meets strict compliance requirements under the TIFIA funding term sheet.

What's next for Transurban?

With commercial close now achieved, Transurban will progress to financial close in 2027. The company has committed to making the agreed payments over the duration of the concession and has structured revenue-sharing for scenarios where project returns exceed expectations.

This project demonstrates Transurban's strategy to grow its managed lanes portfolio in the US, leveraging existing financing and operational expertise. Investors will be watching for updates around financial close and capital deployment in the coming year.

Transurban share price snapshot

Over the past 12 months, Transurban shares have declined 8%, trailing the S&P/ASX 200 Index (ASX: XJO), which has fallen 2% over the same period.

View Original Announcement

The post Transurban shares: I-24 Nashville project secures $21b TDOT deal appeared first on The Motley Fool Australia.

Iperionx Ltd (ASX: IPX) is the fastest riser of the ASX 200 today, up 7.8%.

Perseus Mining Ltd (ASX: PRU) shares are at the back of the index, down 3.6%.

Let's check out some new ratings on ASX shares today.

Genesis Minerals Ltd (ASX: GMD)

The Genesis Minerals share price is $6.44, up 0.9% today and up 8% over 12 months. 

Todd Lewis from Bell Potter has a buy rating on this ASX 200 gold mining share. 

Lewis said: 

Incorporating the 1QFY27 result, we lift our TP [target price] 3% to $9.30/sh and retain our Buy recommendation.

The quarter was solid on ounces and cash but softer on revenue and cost. The revenue miss is largely price and sales timing, while the AISC step-up reflects lumpy sustaining capital rather than higher unit mining costs.

We now forecast FY27 AISC of A$2,955/oz, in the upper half of guidance. VAU merger (26 November 2026 implementation) and Strategic Plan (4QFY27) is the key re-rating catalyst.

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is steady at 91 cents on Tuesday, and down 28% over 12 months. 

Stuart Howe from Bell Potter has a hold rating on this ASX 200 energy share. 

Howe said: 

BPT is focused on shifting from a production replacement cycle to building a longer term sustainable reserves position.

The company is guiding to modest production growth in FY27 and relatively stable capex, enabling positive free cash flow and maintaining balance sheet strength for growth initiatives and potentially dividends.

We are positive on BPT's exposure to Australian east coast gas markets (around half of sales volumes) and cautious with respect to global oil markets. With a flat earnings outlook, we see BPT as fully priced.

Transurban Group (ASX: TCL)

The Transurban share price is $13.97, down 1.6% today and down 6% over 12 months. 

James Bills from Shaw and Partners has a sell rating on this ASX 200 industrials share. 

Bills said (courtesy The Bull): 

Transurban owns a portfolio of quality toll road assets, but the current valuation appears stretched relative to expected growth, in our view.

The business also carries significant debt, leaving it sensitive to funding costs and interest rate movements.

While traffic volumes remain resilient, we believe future returns may be constrained by valuation and financing pressures.

Investors may find more attractive opportunities elsewhere that offer stronger growth potential and a more suitable risk-reward profile.

The post Buy, hold, sell: Genesis Minerals, Beach Energy, Transurban shares appeared first on The Motley Fool Australia.

After all, if you own shares that are likely to fall in value, your portfolio returns could suffer. 

With that in mind, let's look at three ASX shares that analysts have named as sells this week, courtesy of The Bull. Here's what they are bearish on:

Bendigo and Adelaide Bank Ltd (ASX: BEN)

The team at MPC Markets believes this regional bank's shares are fully valued following a rebound.

In light of this and the weakening housing market, it thinks now could be a good time to take profit. It said:

In our view, the bank looks fully valued after its recent rebound, leaving little room for execution disappointments. Growth is modest, mortgage competition remains fierce and the shares already sit near analyst fair value estimates. 

The share price has been volatile, trading in a 52-week range between $9.81 and $13.11. The shares were trading at $10.225 on October 22. We would be inclined to cash in some gains in a weaker broader housing market.

Commonwealth Bank of Australia (ASX: CBA)

Shaw and Partners has named banking giant CBA as an ASX share to sell this week.

The broker believes its premium valuation, modest growth expectations, and competition and regulatory pressures are reasons to be cautious. It explains:

Commonwealth Bank continues to deliver a strong operational performance and remains Australia's highest quality banking franchise. However, the share price is trading at a significant premium to domestic and global banking peers. 

Earnings growth is expected to remain relatively modest, while competition and regulatory pressures persist across the banking sector. Given the elevated valuation and limited upside relative to risk, it may be prudent to realise gains and redeploy capital into investments with stronger growth prospects.

Transurban Group (ASX: TCL)

The team at Shaw and Partners is also bearish on toll road company Transurban.

It has named it as an ASX share to sell due to its belief that its valuation is stretched based on its growth expectations. The broker said:

Transurban owns a portfolio of quality toll road assets, but the current valuation appears stretched relative to expected growth, in our view. The business also carries significant debt, leaving it sensitive to funding costs and interest rate movements. 

While traffic volumes remain resilient, we believe future returns may be constrained by valuation and financing pressures. Investors may find more attractive opportunities elsewhere that offer stronger growth potential and a more suitable risk-reward profile.

The post Analysts warn that these popular ASX shares are 'sells' appeared first on The Motley Fool Australia.

Inflationary pressures affect daily life. But they also affect how we invest. All investments are vulnerable to the corrosive effects of inflation. Investment properties become more expensive as interest rates rise, which means upward pressure on rents. Companies face rising input costs, which they either have to weather or pass onto their customers. Navigating this proverbial minefield as an investor is no easy task.

Unfortunately, it might be something we may have to get used to, though. This week, Commonwealth Bank of Australia (ASX: CBA)'s chief economist, Luke Yeaman, argued the following in a client note:

…the risks to inflation are mounting, and they sit to the upside. As a result, the November meeting remains 'live'. Even if trimmed mean inflation prints at 1.0% in Q3, the RBA may still want to take out some pre-emptive insurance. At a minimum, the RBA will respond aggressively to any new upside surprises, or any signs that the expected slowdown in growth and resultant easing of inflation pressures is not occurring.

More broadly, the structural forces outlined above have materially increased the risk that inflation will be more persistent than forecast and that several more interest rate hikes will be needed over the next 6 – 12 months. Either way, rates will be structurally higher over coming years. Under any near-term scenario, markets are increasingly coming to terms with the fact that we are now in a higher inflation, higher interest rate environment. There is evidence of this in global bond markets, with US 10-year yields recently hitting their highest level since 2002.

Not exactly soothing stuff. However, we must invest in the world we are living in, not the one we wish we were. So how does one invest under a 'higher for longer' inflationary environment?

Well, I think there are two principles to stand by as we continue to build out our portfolios.

Investing in a high inflation world

Firstly, I think it's imperative to only invest in ASX shares, in companies, that have significant pricing power. Companies that make for successful investments need to be able to pass on any increased costs to consumers. As a shareholder, you don't want to be left with that bill. It is usually the ASX shares that display evidence of possessing at least one economic moat that are able to do this most effectively.

Think of Coles Group Ltd (ASX: COL) or Woolworths Group Ltd (ASX: WOW). As they remain amongst the cheapest businesses to purchase groceries and household essentials from, customers will usually keep coming through the door, even if prices are on the rise. As such, much as we detest it, they can pass on those higher costs to us relatively seamlessly.

Ditto for a company like Telstra Group Ltd (ASX: TLS), or Transurban Group (ASX: TCL). Telstra arguably offers superior network coverage compared to its competitors, whilst Transurban has the right to toll some of Australia's most vital arterial roads. This means that many customers will have no choice but to swallow any price rises these two shares choose to pass on. If you're a customer of Transurban or Telstra, you might not like that. But if you are a shareholder, that's mana from heaven.

Secondly, we can consider cash-based investments. With interest rates so high, we are at a rather unique situation that hasn't been seen for decades. It is now possible to obtain a risk-free term deposit or savings account that pays a substantial and real return. After the latest interest rate hike, it is now possible to get a term deposit that yields as much as 5.5% – well above the current rate of inflation.

Sure, you won't get franking credits or the possibility of capital growth. But you won't get any risk or volatility either. In the current environment, I don't see anything wrong with allocating at least a portion of one's portfolio to these cash assets while rates remain so elevated.

The post Higher for longer: How to invest in a high-inflation Australia appeared first on The Motley Fool Australia.

Have these updates been received well by analysts? Let's see what Morgans thinks of three of them.

Hub24 Ltd (ASX: HUB)

Morgans was pleased with this investment platform provider's performance during the first quarter.

It highlights that Hub24 delivered platform net flows that were down quarter on quarter but in line with expectations.

In response to this and recent share price weakness, the broker has upgraded Hub24 shares to a buy rating with an $86.00 price target. It said:

HUB's 1Q27 Platform net flows of A$4.0bn were in line with MorgF/VA consensus (A$3.97bn), -5% qoq (4Q26: A$4.2bn) and -23% yoy (1Q26: A$5.2bn was a 1Q flows record). Platform FUA closed at A$143.7bn (+3% qoq, +18% yoy) and Total FUA at A$168.6bn, both ~1.2% below VA consensus. Discretionary (IDPS) outflows persisted during the quarter, with IDPS gross & net inflows below a strong pcp; however, structural support from resilient Super flows remained evident. 

Adjusting for HUB's 1Q27 update, we trim our EPS by 1% in FY27-29F. HUB is now trading on an FY27F P/E of 38x (a ~17% / 1StDev discount to its 5yr average). Whilst cyclical headwinds are weighing on flows momentum in the near term, HUB remains strongly positioned to benefit from broader structural tailwinds. We see the pullback in the share price as an increasingly attractive entry point. We upgrade our recommendation to BUY (from ACCUMULATE), with a PT of A$86.00/sh.

Northern Star Resources Ltd (ASX: NST)

This gold miner also delivered a quarterly update that went down well with Morgans.

However, it isn't enough for a buy rating. Morgans has retained its hold rating and $25.00 price target on Northern Star shares. It said:

A solid start to FY27. Gold sold of 364koz beat MorgansF and consensus, and AISC of A$3,217/oz was 8% below consensus, led by KCGM and Yandal. Pogo was weak. FY27 guidance is unchanged and the KCGM ramp-up remains the key operational watch point. New CEO Suresh Vadnagra's plans for the portfolio are likely a few months away. In the meantime, market focus remains on a potential increase in the Gold Fields offer and KCGM commissioning performance.

Transurban Group (ASX: TCL)

Morgans believes this toll road operator could be negatively impacted by higher fuel costs and interest rates.

As a result, it has put a trim rating and $12.06 price target on its shares. It explains:

Alongside its AGM (where FY27 DPS guidance of 72 cps and Free Cash coverage slightly less than 95% were reaffirmed), TCL released its 1Q27 traffic data. We expect higher fuel costs and interest rates dampened Australian traffic growth (c.1% on pcp ex West Gate Tunnel). Dynamic pricing strength of the US Express Lanes continues to be terrific. Target price of $12.06/s (+3 cps) aligned to our DCF valuation. Potential TSR at current prices is -9% (including c.5.1% cash yield). TRIM into share price strength.

The post Should you buy Hub24, Northern Star, and Transurban shares? appeared first on The Motley Fool Australia.

I want to invest in good-quality companies which are reliable and that remain relatively reliant through each stage of the economic cycle.

But it's not as easy as I expected to pinpoint exactly what those shares could be, especially in today's volatile markets where sentiment can easily shift overnight.

The good news is, I've done a lot of the ground work.

I've scoured the market for ASX investments which I think fit the brief.

And these four made my shortlist.

APA Group (ASX: APA)

When it comes to reliable long-term ASX investments, it's hard to look past APA. The stock stands out among the rest of the market thanks to its monopoly across Australia's energy infrastructure, combined with a growing pipeline, inflation-linked cash flow, and incredibly long-standing and reliable dividend payments, which means my kids can benefit from a steady passive income, too.

APA is an Australian energy infrastructure giant that owns and operates an extensive portfolio of electricity, solar, and wind assets across the country. It's also the major owner and operator of Australia's gas distribution network, including pipelines, gas-fired power stations, and storage facilities, which transports more than half of Australia's natural gas.

A large majority of APA's revenue is derived from long-term contracted infrastructure assets and linked to inflation, giving the business steady and growing revenue with a long-term outlook. 

The company is also continually working to scale its business. Its organic pipeline sits at around $3.5 billion, driven by major gas grid expansions, Victorian pipeline upgrades, and other power generation projects designed to address Australia's energy shortfalls through FY27 to FY29.

APA is also highly regarded for its strong and consistent dividend payments and has historically paid two partially franked or unfranked dividends a year, dating back to 2008. The company paid a total 58-cent payment for FY26, translating to a dividend yield of around 5.1% at the time of writing.

Transurban Group Ltd (ASX: TCL)

Transurban is one of my favourite ASX shares for long-term investing. The company is a global infrastructure business that builds and operates urban toll road networks, tunnels, bridges, and operates 22 assets across Australia, the US, and Canada.

Because toll roads are an essential service, the business is widely considered a high-grade defensive stock. And when I'm investing for my kids, this is the sort of asset which can stand the test of time.

After all, regardless of what point of the economic cycle we're in, Australians will still need to travel, whether it's to work, school, transportation of goods, or any other reason.

Even better is that most of its toll roads are on an annual contract, which means Transurban is able to increase its toll prices each year in line with rising inflation.

Its defensive nature means Transurban's toll roads typically have stable traffic volumes year-round, and that translates directly into a strong and resilient cash flow and consistent earnings. 

Which then translates into a reliable passive income for my kids' ASX investment portfolio.

Transurban has paid a regular dividend to its shareholders twice per year dating back to 2008. And with the exception of the 2020 pandemic year when most of the country was in lockdown, these have gradually climbed higher each year too. 

For FY26, Transurban paid shareholders a total 69-cent dividend, unfranked, which translates to a dividend yield of around 5% at the time of writing.

CSL Ltd (ASX: CSL)

I landed on CSL shares for a slightly different reason.

CSL is traditionally classified as a defensive stock because global demand for healthcare, plasma therapies, and vaccines remains steady during economic downturns. But, the company has faced several hurdles over the past couple of years which has smashed its share price. 

What I find most interesting about CSL is its long-term growth potential.

The near-term picture looks a little scary, and any setback of the company's latest growth projection could be devastating for investor confidence and the company's share price.

But CSL already has an incredibly dominant market position in a high-growth market. And its position could well grow stronger, too. There will also be an ongoing need for immunoglobulin, influenza vaccines, and plasma therapies, and CSL is well-placed to scoop up a lot of that demand.

Management's structural reset, cost efficiency plans, strong market position, and demand for its products suggest the company is finally finding its feet, and it looks like the long-term road to recovery is now underway.

As a long-term investment, CSL doesn't offer the unwavering stability that the two ASX shares above offer. But it does present the opportunity for huge growth over the next three to five years, or even longer, which I think can be just as valuable.

It pays its shareholders a dividend too, dating back to 2004. Although, after the company's operational reset, its $4.05 per share dividend payout represents a low dividend yield of around 2% at the time of writing.

Goodman Group (ASX: GMG)

Goodman Group is another type of ASX investment entirely. The company is an integrated property group with operations in 14 countries. It specialises in industrial and commercial properties, owning, developing, and managing a global portfolio worth around $80 billion.

The company is a great long term ASX investment option because it has a strong balance sheet, has consistent earnings, benefits from high occupancy rates, and its recent shift into AI data centre developments also means its growth prospects are diverse.

Markets are widely anticipating an explosion in data usage driven by an uptick in artificial intelligence (AI) workloads, cloud computing, and digital transformation. And that means demand for data centres could also experience a huge surge.

In FY26, Goodman delivered an operating profit of $2.675 million, up 15.7% year on year. Its operating earnings per security (OEPS) reached 129.9 cents (up 10.1%).

When it comes to passive income, Goodman Group doesn't come out on the top of the pile. Only around 25% to 28% of its income comes from passive rent, versus traditional property trusts (REITs) that pay out closer to 80% to 100% of their passive rental income directly to investors as distributions.

Goodman's dividend payout has stayed steady at 15 cents per unit since December 2018, giving a yield of around 1.1%, which is lower than the market average.

But passive income is just one thing I take into account when weighing up options for my kids' portfolios. If I was looking for a long-term ASX investment that is reliable, and with strong prospects to expand into a booming data centre market, Goodman Group would be a top pick.

The post I've been looking for long-term ASX investments for my kids. These 4 made my shortlist appeared first on The Motley Fool Australia.

What did Transurban Group report?

• Group average daily traffic (ADT) rose 3.1% year-on-year to 2.58 million trips
• Sydney ADT up 3.0% to 1.08 million trips, led by a 10.7% gain on the M7 after the M7-M12 Integration Project
• Melbourne ADT up 4.2% to 875,000, supported by West Gate Tunnel opening; CityLink flat (-0.2%) excluding WGT
• Brisbane ADT lifted 1.1% to 498,000, with solid truck volumes (+3.6%)
• North America ADT up 4.7% to 127,000, strong growth on the 495 Express Lanes (+17.3%)

What else do investors need to know?

Transurban addressed a vehicle classification issue in Melbourne and the West Gate Tunnel, with no material impact expected to free cash flow or upcoming distributions. The company does not anticipate significant impacts from recent Victorian toll policy changes flagged during the state election.

In North America, dynamic toll prices soared—up 20% on the 95 Express Lanes and 47% on the 495 Express Lanes—highlighting customer demand for reliable travel options, even as roadworks temporarily weighed on the 95 corridor.

The Group's revenues remain highly resilient, with more than 90% of income CPI-linked or subject to fixed increases, cushioning against inflation and uncertainty.

What's next for Transurban Group?

Transurban will keep providing monthly traffic updates throughout 2026 as it closely watches changing economic and policy conditions. The Group remains focused on disciplined balance sheet management, operational efficiency, and delivering projects that add value for both customers and investors.

The company reiterated the essential role of its urban transport assets, with recent capital projects like the West Gate Tunnel and M7-M12 Integration now contributing to traffic growth. Management expects continued resilience, helped by its inflation-linked revenues and ongoing infrastructure investments.

Transurban Group share price snapshot

Over the past 12 months, Transurban shares have declined 7%, trailing the S&P/ASX 200 Index (ASX: XJO), which has fallen 3% over the same period.

View Original Announcement

The post Transurban posts September quarter 2026 traffic lift as project openings boost growth appeared first on The Motley Fool Australia.

Naturally, dividend income would be important. After all, having regular payments arriving in your bank account could make retirement much more enjoyable.

But I wouldn't simply look for the shares with the biggest dividend yields.

Retirement could last 20 or 30 years, and I would want to own businesses that have a reasonable chance of growing their earnings and dividends over that time.

I would also favour established companies with strong market positions, dependable cash flows, and businesses that I can see remaining relevant for decades.

With that in mind, here are five ASX shares that would make my shortlist.

APA Group (ASX: APA)

The first ASX share I would consider is APA Group.

I think infrastructure businesses can be particularly well suited to a retirement portfolio, especially when they own assets that customers depend on and cannot easily replace.

APA certainly fits that description. The company operates an extensive network of gas pipelines, processing facilities, storage assets, and electricity transmission infrastructure across Australia.

Many of its customers rely on this infrastructure to keep their own operations running, which helps APA secure long-term agreements and generate relatively predictable cash flows.

And that is the sort of business I would want supporting my retirement income.

While APA has significant investments to make as Australia's energy requirements change, it already has an established asset base generating substantial cash.

In FY 2026, the company delivered underlying EBITDA growth of 8.3% and increased its annual distribution to 58 cents per security. Management expects another increase to 59 cents in FY 2027, which will mark its 23rd annual increase in a row.

Looking ahead, APA has a substantial development pipeline that could keep earnings and dividend growth going for a long time to come.

APA gives me a good starting point, but I would want more than energy infrastructure supporting my retirement income.

The other four companies bring different strengths to the portfolio, including some with excellent dividend growth potential.

So, let's look at why I think they could be worth owning for the next 20 or 30 years.

Telstra Group Ltd (ASX: TLS)

Another ASX share I would put on my retirement shortlist is Telstra.

I don't expect Telstra to become a spectacular growth company, but that isn't really what I'm looking for here.

What I like is that telecommunications has become an essential part of everyday life, and Telstra has a leading position in the Australian market.

Millions of customers pay for mobile and internet services every month, giving the company a recurring source of revenue.

Telstra has also demonstrated that it can increase prices while continuing to grow its mobile subscribers.

This has helped support earnings and dividend growth, with the company lifting its annual dividend by 10.5% to 21 cents per share in FY 2026.

And thanks to its Connected Future 30 strategy, I think Telstra could continue providing shareholders with a useful combination of income and modest earnings growth.

Transurban Group (ASX: TCL)

I would also want some exposure to transport infrastructure, which is where Transurban comes in.

The company owns and operates major toll roads across Australia and North America.

What I like about Transurban is the potential for its existing assets to become more valuable as cities grow.

Building major roads through established urban areas is extremely difficult and expensive. That puts Transurban in a strong position where it already operates important routes.

And with many of its concessions allowing tolls to increase over time, the company has opportunities to grow revenue without needing traffic volumes to rise significantly every year.

That could be particularly valuable during retirement, when inflation can gradually reduce the purchasing power of your income.

Transurban is expecting to pay distributions of 72 cents per security in FY 2027, up from 69 cents in FY 2026.

Overall, I think its long-lived assets and potential for growing distributions make it a strong candidate for a retirement portfolio.

Wesfarmers Ltd (ASX: WES)

Another ASX share I would be very comfortable owning over a long retirement is Wesfarmers.

I have a lot of respect for the company and the way it has been managed over the years.

It owns some excellent retail brands, including Bunnings, Kmart, and Officeworks, while also operating in healthcare and industrial markets.

But I think one of Wesfarmers' greatest strengths is its ability to make sensible decisions about where to invest its money.

Management has demonstrated a willingness to expand successful businesses, develop new opportunities, and exit investments that no longer justify their place in the group.

That approach has helped Wesfarmers deliver excellent long-term returns to shareholders.

And the company continues to perform well, with underlying net profit increasing 8.3% in FY 2026.

I wouldn't necessarily expect Wesfarmers to offer the biggest dividend yield on my shortlist. However, I think its earnings growth potential and disciplined management could allow dividends to increase considerably over a lengthy retirement.

Woolworths Group Ltd (ASX: WOW)

A final ASX share I would consider is Woolworths.

I think the supermarket giant has many of the qualities I would want in a retirement investment.

Its supermarkets serve millions of Australians every week, generating substantial revenue from products that households need regardless of economic conditions.

And after a challenging period, Woolworths is showing signs of being back on track.

Its Australian Food division reported an 8.5% increase in EBIT in FY 2026, demonstrating the progress being made in improving profitability.

With its enormous store network, strong brands, and established customer relationships, I believe Woolworths is well positioned to keep growing earnings and dividends over the long term.

Of course, with its shares now trading near record highs, investors are paying a premium for that quality.

But for someone building a retirement portfolio with a 20- or 30-year investment horizon, I think Woolworths could still be an excellent company to have on their shortlist.

Final word

Of course, I wouldn't necessarily limit an actual retirement portfolio to just five ASX shares.

I would want greater diversification, potentially including international investments and some cash or defensive assets.

But if I were narrowing down the ASX to a handful of companies capable of supporting my retirement income for many years, these five would certainly deserve a place on my shortlist.

The post If I could only buy 5 ASX shares for retirement, these would make my shortlist appeared first on The Motley Fool Australia.

3 things to look for in a retirement stock

Firstly, it needs to demonstrate some signs of possessing what legendary investor Warren Buffett would call a wide economic moat. This concept refers to an intrinsic competitive advantage that a company can possess, which it can use to fend off its competitors and keep its customers coming back. That could be a price advantage, a powerful and trusted brand, or offering a good or service that customers find difficult to avoid using.

Secondly, it needs to have a strong and resilient earnings base. The world is an ever-changing and unpredictable place. As an investor, we need to be as confident as we possibly can that a company we invest our hard-earned dollars into will be able to make its crust in all kinds of economic weather. After all, if a retirement is to last for two, three, or even four decades, it must be funded by companies that can navigate whatever the world can throw in their way.

Thirdly, a company must be able to pay a reliable and meaningful dividend, preferably with full franking credits attached. When the rubber hits the road on our retirement, retirement stocks need to be able to pay us an income. We can never know for sure what kind of dividend a company will pay in the future. But it's my belief that what it has paid in the past is one of the best indicators of what to expect going forward.

So, now that we have our three criteria unpacked, let's talk about five retirement stocks that I think check all three boxes.

Coles Group Ltd (ASX: COL)

First up, we have the grocery giant Coles. Almost all readers would be familiar with this company thanks to its dominant network of eponymous supermarkets across the country. Coles also owns the Liquorland chain of bottle shops.

Coles clearly checks all three of our selection criteria. Starting off, it arguably possesses two moats: a well-known and trusted brand, as well as a clear price advantage when it comes to food and household essentials. Most people would assume that their local Coles store is one of the cheapest places to do the weekly grocery shop, and that the products that Coles sells can't be purchased at a meaningfully lower price elsewhere.

It also has one of the most resilient earnings bases on the ASX. We all need to stock our households with food and essentials on a regular basis. That is irrespective of whether the economy is booming or busting, or whether inflation is high or low. As such, it is pretty clear that Coles will have customers walking through the door no matter the economic weather outside.

Coles also has an exceptional dividend track record. It has paid a reliable dividend every six months since it first hit the ASX in its own right back in late 2018. What's more, Coles has managed to increase its annual dividend total every single year since then too. Given this company's payouts also tend to come with full franking credits attached, I think this could be a great retirement stock.

Transurban Group (ASX: TCL)

Next, let's talk Transurban. This is a company that any motorist in Sydney or Melbourne, and perhaps in Brisbane too, would be intimately familiar with. It owns the vast majority of this nation's tolled arterial roads. This in itself is enough to tick our first box. A toll road network is, by definition, a form of moat, given that customers find it difficult to avoid using. This moat is widened by the fact that Transurban often enjoys exclusive, decades-long contracts which allow it to increase its tolls by at least the rate of inflation.

That bleeds into our second retirement stock criteria too. This exclusive right to roll some of the country's most vital road corridors gives Transurban a highly defensive earnings base. Sure, it may see some reduced traffic if there is a severe recession. But given we will always need to get to work, and move goods around our cities, Transurban is a solid choice for a retirement stock, in my view.

This plays out in the company's dividend history. Transurban has a staircase-like pattern of delivering dividend increases over the past two decades, with the only major hiccups coming in COVID-ravaged 2020 and 2021.

Telstra Group Ltd (ASX: TLS)

Our third retirement stock to discuss is Telstra. This telco is another household name, thanks to its long history as Australia's major telecommunications provider. Not only does Telstra continue to benefit from this powerful brand association, it also enjoys another form of moat. This company's mobile network is almost universally regarded as the best in Australia, covering many rural and regional areas that its competitors don't.

This means that many customers have no choice but to use Telstra for their mobile connectivity.

Telstra's nature as a telco provider also grants it a defensive earnings base. Fixed-line and mobile internet connectivity are vital, essential services in today's modern world. If times do get tougher, consumers will arguably pull back on spending on many other things before they will cut back on their internet and phone use. That makes Telstra a fantastic stock for investors looking for a stable retirement investment.

Let's talk cash now, though. Telstra is one of the ASX's most famous dividend payers. It has always paid out a strong dividend, which usually comes with at least some franking credits attached. Telstra has been growing its annual payouts every year for many years now as well.

Commonwealth Bank of Australia (ASX: CBA)

Our penultimate retirement stock today is yet another company most Australians would be familiar with. Commonwealth Bank of Australia is, without question, our strongest and best-run bank. Like Telstra, it has a history as a government-owned company, which gives CBA a lot of legacy brand goodwill.

That forms part of CBA's moat, which is supplemented by its status as our largest bank, lending CBA strength and scale.

However, CommBank is probably our least resilient stock on this list. Banks are notoriously vulnerable to economic shocks, given the crucial role they play in providing credit in the economy. CBA has cut its dividend in the past when the economy has been under pressure. Saying that, this bank's payouts have always bounced back quickly and have gone on to hit new heights. Over the cycle, CommBank should provide a healthy stream of fully-franked dividend income, and thus, makes for a valuable retirement stock.

Wesfarmers Ltd (ASX: WES)

Our fifth and final retirement stock is not exactly a household name. However, the plethora of successful Australian companies that it runs most certainly are. Wesfarmers is the sprawling industrial and retailing conglomerate behind Bunnings Warehouse, OfficeWorks, Target, and Kmart. The company also owns a range of other businesses, which span from fertiliser and chemical manufacturing to healthcare and mining.

These high-quality individual businesses stitch together to form a formidable moat that surrounds Wesfarmers' earnings base. The company has so many fingers in so many pies that it tends to survive just fine when economic conditions are tough, and thrive when optimism returns.

Wesfarmers has a long history of looking after its shareholders. The company has delivered above-market returns for decades, coming from both capital growth and a rising dividend.

Wesfarmers has always paid a reliable dividend, which usually comes with full franking credits attached. 2026 was the sixth year in a row that investors have enjoyed an annual dividend pay hike. Given this ASX share's long-term focus and diverse earnings base, I think it can be called the perfect retirement stock.

The post I look for 3 things in a retirement stock. These 5 shares have them all appeared first on The Motley Fool Australia.

But what if, rather than living off your superannuation balance, you could continue earning your working wage even after you retire?

According to the Australian Bureau of Statistics, $108,352 is the average full-time earnings of Australians in 2026.

If you're able to continue generating the same income level in your retirement years, then you'll be able to live above and beyond a comfortable retirement lifestyle.

And it's easier than you'd think.

If you invest your superannuation wisely, you could generate a passive income in retirement on par with the average $108,000 Aussie wage.

But what would it actually take?

Let's investigate.

How much do I need in my superannuation to earn an annual passive income of $108,000?

To calculate the amount of superannuation you need, you'll need to divide your annual passive income by the dividend yield of your portfolio.

The only issue is that the answer varies depending on what that yield is.

The general rule of thumb is, as your yield goes up, the passive income you can earn off the same balance also increases.

This means that a portfolio with a dividend yield of say, 6%, only needs to be half the size of one with a 3% dividend yield in order to earn the same amount of passive income every year.

Break it down for me by yield

If your overall superannuation portfolio has a dividend yield of around 2%, you'll need a balance of $5.4 million.

Obviously, that's a huge figure, and out of reach for many Australians. 

But remember, as your yield increases, the required balance goes down. 

If your portfolio's yield is closer to 3%, your balance would need to be closer to $3.6 million.

For a 4% yielding portfolio, you'd need a balance closer to $2.7 million.

Raise it a little more to 5%, and you're looking at a balance of $2.16 million. That will still generate the same $108,000 passive income every year.

At a yield of 6%, your superannuation portfolio would need to be around $1.8 million in size.

It could then go down to around $1.54 million or $1.35 million for a 7% or 8% yielding portfolio, respectively.

I'm a little risk adverse, I'd be most comfortable with investing my superannuation into 4% to 6% yielding ASX shares. What are my options?

It's a wise move.

It can be tempting to go for the highest-yielding shares with the expectation that you could earn that same passive income off a much smaller balance. And it's possible, but it's a risky investment strategy.

Generally, the higher-yielding ASX dividend investments are associated with more risk. Investors might be faced with lower capital growth or fluctuating income.

But a 4% to 6% yield is often considered to be the "sweet spot".

It's the middle ground between large, stable, low-growth ASX businesses, and high-growth volatile shares. 

Companies in this bracket could be some of the major banks, defensive infrastructure shares, or energy stocks. 

For example, Telstra Group Ltd (ASX: TLS), AGL Energy Ltd (ASX: AGL), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC), Transurban Group (ASX: TCL), and Origin Energy Ltd (ASX: ORG) and all yield around the 4% to 6% level, at the time of writing.

The post How much do I need in my superannuation to generate a $108,000 annual passive income? appeared first on The Motley Fool Australia.

It sits above the $630,000 balance that the Association of Superannuation Funds of Australia (ASFA) thinks every Australian needs for a comfortable retirement, and below the asset cut-off point for a part Age Pension payment.

This amount of money means you'll be able to live well when you decide to stop working. But if you invest that money wisely, it could also generate an additional passive income that'll turn a comfortable retirement lifestyle into an affluent one. 

Think frequent travel, luxury property, and flexible discretionary spending.

So, how much passive income can you earn off a $700,000 superannuation balance?

And what ASX shares could you invest in?

Let's take a look.

The calculation

There is a straightforward calculation to work out what passive income a $700,000 passive income could generate.

If you multiply your total superannuation balance by the overall dividend yield of your portfolio, it'll give you the passive income you could generate.

The answer changes depending on your dividend yield, which helps you identify what you need to invest in to earn the income you want. 

Generally, as your yield goes up, the passive income you can earn off the same balance also increases.

How much could I earn off a 2% to 3% yielding superannuation portfolio?

A 2% yielding portfolio is at the lowest end of the scale. Off a $700,000 superannuation balance, you'd generate around $14,000 in passive income. That's because $700,000 x 2% = $14,000 in dividend payments.

It's not a huge amount, but the benefit of a super low yielding portfolio is that this would generally be focused on traditional and reliable blue-chip shares rather than towards high-growth ASX stocks.

Think Woolworths Group Ltd (ASX: WOW), Macquarie Group Ltd (ASX: MQG), and even CSL Ltd (ASX: CSL). These shares are each huge in scale, have a long history of paying dividends to shareholders, and they yield somewhere in the 2% to 2.5% range, at the time of writing.

On a 3% yielding portfolio, you could earn a little more, at closer to $21,000 per year in dividend income, off the same balance.

Stocks around the 3% level typically offer investors a balance between a moderate, reliable passive income, and some capital growth potential.

Think Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), and Wesfarmers Ltd (ASX: WES). These powerhouses all offer a yield of around 3% to 3.5% at the time of writing.

What about a 4% to 5% yielding superannuation portfolio?

If your superannuation portfolio yields closer to 4% or 5%, you could earn even more, at closer to $28,000 or $35,000 per year in passive income, respectively.

This is often considered by investors as the "sweet spot" between stability and growth. Companies in this bracket are typically large-scale blue chips, major banks, or defensive infrastructure shares. 

For example, Rio Tinto Ltd (ASX: RIO), Medibank Private Ltd (ASX: MPL), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC), Deterra Royalties Ltd (ASX: DRR), Transurban Group (ASX: TCL), and Telstra Group Ltd (ASX: TLS) all yield around this bracket, at the time of writing.

What about higher yielding ASX shares, around the 6% to 8% level?

It's possible to earn even more if your superannuation investment portfolio is high yield, but this comes with a lot more risk. Investors would need to accept lower growth, or potentially even share price declines, in place of a higher passive income.

There are still plenty of options around this level, though.

Some examples are Harvey Norman Holdings Ltd (ASX: HVN), Premier Investments Ltd (ASX: PMV), or Nick Scali Ltd (ASX: NCK). 

Real Estate Investment Trusts (REITS) also typically offer a higher yield thanks to their predictable rental income. Such as, Charter Hall Long WALE REIT (ASX: CLW), Waypoint REIT Ltd (ASX: WPR), and HomeCo Daily Needs REIT (ASX: HDN).

The post How much passive income can I earn off a $700,000 superannuation balance? appeared first on The Motley Fool Australia.

But when it comes to building passive income, I think it pays to look beyond the size of the next dividend.

After all, a company that can maintain and gradually grow its dividends could be far more rewarding over the long term than one offering a high yield that proves unsustainable.

With that in mind, here are three ASX dividend shares that could be worth considering for passive income.

APA Group (ASX: APA)

The first ASX dividend share to look at is APA Group. 

It owns and operates a vast network of energy infrastructure across Australia, including gas pipelines, processing facilities, storage assets, and electricity transmission infrastructure.

One of the best things about APA is that much of its revenue comes from long-term agreements with customers that need access to its infrastructure. This provides a degree of predictability to its cash flows, which is particularly important for a company paying regular distributions to shareholders.

Speaking of which, for FY 2027, APA is forecast to offer a dividend yield of approximately 5.3%.

Transurban Group (ASX: TCL)

Another ASX dividend share that could be a strong option for income investors is Transurban.

It owns and operates major toll roads in Australia and North America, generating revenue whenever motorists use its networks.

One of Transurban's strengths is that its roads are already an established part of how people travel around major cities.

Whether motorists are commuting to work, making deliveries, or travelling for other reasons, there is an ongoing need for roads that help them avoid congestion.

And as populations grow, traffic volumes could increase over time, driving its dividend higher.

For FY 2027, Transurban is guiding to a 72 cents per share dividend, which represents a yield of around 5.4% at current prices.

Woolworths Group Ltd (ASX: WOW)

A final ASX dividend share that could be worth considering is Woolworths.

Woolworths is one of Australia's largest retailers, with millions of customers shopping at its supermarkets every week.

This gives it a substantial and recurring source of revenue, even when households are cutting back on discretionary purchases.

The opportunity now is for management to improve the company's operating performance and rebuild earnings after a tough period.

If Woolworths can regain momentum while keeping costs under control, there is potential for profits and dividends to grow over the coming years.

In the meantime, the market is expecting a dividend yield of around 2.9% in FY 2027.

The post Why these excellent ASX dividend shares could be strong buys for passive income appeared first on The Motley Fool Australia.

Among the 11 market sectors, information technology is in the lead today, up 2.3%.

The consumer staples sector is the laggard, down 1.4%.

Here are some new recommendations from the experts.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is $2.02, up 0.8% today and down 29% over 12 months. 

Bell Potter has a buy rating with a 12-month price target of $4.45 on this ASX 200 healthcare share. 

Analyst John Hester said: 

The short term outlook for Mesoblast's revenue growth remains highly attractive.

Pivotal events for valuation are approaching, including the interim readout on the adult GvHD study (1QCY27) and the headline data from the chronic lower back pain trial (CLBP) due mid CY27.

Both are substantially larger markets than paediatric GvHD, nevertheless the market remains cautious.

Australian biotech has had a difficult 12 months with several randomised clinical trials failing to meet clinical endpoints and we expect this has undermined investor confidence in the sector and is a contributing factor to the recent MSB share price.

While there is inherent risk in clinical trials, there is little to no read through from recent performance of others to MSB.

Transurban Group (ASX: TCL)

The Transurban share price is $13.15, down 0.8% today and down 8% over 12 months. 

Blake Halligan from Gray Perry Wealth Advisers has a hold rating on this ASX 200 industrials share. 

Halligan said (courtesy The Bull): 

Transurban owns and operates toll roads across Australia and North America, generating cash flows from essential transport infrastructure.

The company recently agreed to acquire additional interests in Sydney toll roads, which should support longer term earnings and cash flow growth.

No equity funding is required for the $4.5 billion deal.

However, in our view, the benefits are likely to be offset in the near term by increased funding requirements, elevated leverage and ongoing sensitivity to interest rates.

Dependable earnings is challenged by limited immediate upside.

NextDC Ltd (ASX: NXT)

The NextDC share price is $10.38, up 0.1% today and down 34% over 12 months. 

Tom Fairchild from Lazarus Capital Partners has a sell rating on this ASX 200 tech share. 

Fairchild said: 

NXT is riding the AI data centre boom. The company generated total revenue of $496.5 million in full year 2026, up 16 per cent on the prior corresponding period.

To fund capital expenditure of $3.397 billion in full year 2026, NXT raised $9.75 billion, much of it in senior debt, subordinated notes and hybrid securities.

The company's $82.1 million statutory profit relied on a revaluation gain of $128.8 million.

In our view, rising interest costs could squeeze returns before new capacity starts paying its way.

The shares have fallen from $16.37 on June 4 to trade at $10.23 on October 8.

The post Buy, hold, sell: Mesoblast, Transurban, NextDC shares appeared first on The Motley Fool Australia.

A $100,000 annual passive income generated completely from your superannuation balance is entirely possible.

This type of money sits well above the estimated cost for a comfortable retirement lifestyle. And it means your passive income will cover most of your expenses without needing to draw down aggressively on the rest of your balance. 

In retirement, you can move your superannuation from an accumulation phase to a retirement phase. This is where you can convert your savings into a regular income stream or withdraw lump sums. 

At this point, you can set up your superannuation to provide a regular income from your investment income, leaving the rest largely untouched, or you can withdraw dividend income in lump sums.

But the question is, how much do you need in your super to be able to earn this level of passive income when you transition to your pension phase?

Let's take a look.

How much do I need in my superannuation to earn an annual passive income of $100,000?

To calculate the amount of superannuation you need, you'll need to divide your annual passive income by the dividend yield of your portfolio.

The catch is that the answer changes depending on what that yield is.

Generally, as your yield goes up, the passive income you can earn off the same balance also increases.

This means that a portfolio with a dividend yield of say, 3%, generally needs to be double the size of one with a 6% dividend yield in order to earn the same passive income. 

Ok, what if my portfolio yields somewhere between 3% to 6%? How much do I need?

Say your overall portfolio has a dividend yield of around 3%, you'll need a balance of around $3.3 million to earn $100,000 per year in passive income. That's because $100,000 ÷ 3% = $3,333,333.

Of course, $3.3 million is a huge balance, and out of reach for most Australians.

But remember, as your yield increases, the required balance goes down. 

For example, if the yield of your portfolio is around 4%, your balance would need to be closer to $2.5 million to earn the same $100,000 annual dividend income.

For a 5% yielding portfolio, you'd need a balance of closer to $2 million.

And then a 6% yielding portfolio could generate $100,000 in passive income from a sound $1.6 million.

Give me some ideas of 4% to 5% yielding ASX shares that I can invest my superannuation in

There are many ASX dividend shares available for superannuation investment, and many of them yield around 4% to 5%.

But here are some of my top picks.

I'd consider defensive shares such as Telstra Group Ltd (ASX: TLS), Transurban Group (ASX: TCL), or Inghams Group Ltd (ASX: ING). 

Otherwise, insurance shares are generally resilient to market volatility. QBE Insurance Group Ltd (ASX: QBE), Medibank Private Ltd (ASX: MPL), and Insurance Australia Group Ltd (ASX: IAG) are all good options in this sector, and they generate a yield of around the 4% to 5% level at the time of writing.

Elsewhere, ASX energy shares are also able to generate reliable dividends for investors. Such as Origin Energy Ltd (ASX: ORG), Contact Energy Ltd (ASX: CEN), or Mercury NZ Ltd (ASX: MCY).

The post How much superannuation do I need to generate $100,000 per year in passive income? appeared first on The Motley Fool Australia.

Among the 11 market sectors of the ASX 200, consumer staples is in the lead today, up 1.4%.

The materials and mining sector is the laggard, down 2.3%.

Let's check out some new ratings from the experts.

IDP Education Ltd (ASX: IEL)

The IDP Education share price is $2.12, up 1.9% today. 

Ord Minnett has a buy rating on this ASX 200 consumer discretionary share. 

In a new note, the broker said: 

IDP Education Limited provides student placement services in Asia, Australasia, and internationally. 

IDP Education (IDP) disclosed that it has rejected two unsolicited and non-binding takeover approaches from Blackstone Singapore Pte Ltd, which is part of the global private equity firm Blackstone Inc. The latest proposal offered $2.50 per share in cash.

On our numbers, the bid equates to an FY27 price-to-earnings multiple of approximately 13.2x, but this is on depressed earnings.

Unsurprisingly, IDP's Board has unanimously rejected the proposal, stating that it "substantially undervalues IDP and is not in the best interest of shareholders".

The Directors highlighted that it considers the approach highly opportunistic, given the international education sector is facing significant headwinds (we point to policy uncertainty and weaker student visa issuance across key markets), which have temporarily depressed valuations.

Further, it does not factor in the upside from IDP's multi-year transformation program.

Macmahon Holdings Ltd (ASX: MAH)

The Macmahon Holdings share price is $1.14, up 2% today. 

Ord Minnett has a hold rating on this ASX 200 materials share. 

The broker commented: 

Macmahon Holdings Limited engages in the process of surface mining, underground mining and mining support, and civil infrastructure services to mining companies in Australia and Southeast Asia.

Macmahon Holdings (MAH) has agreed to acquire Aspect Engineering Solutions in a transaction valued at an enterprise value to earnings before interest and tax (EV/EBIT) multiple of approximately 5–6x, depending on the final earn-out.

The deal will be funded from existing cash reserves and includes an upfront payment of $30 million, annual retention payments of $6million over five years, and performance-based earn-outs of $15–30 million.

MAH can choose to settle the retention and earn-out payments in shares rather than cash.

The acquisition looks financially attractive.

After incorporating the acquisition costs and earnings contribution from Aspect into our numbers, our EPS estimates are revised higher by 3% in FY27 and 6% in FY28. Our target price increases to $1.10 from $1.00 following the positive earnings changes.

Transurban Group (ASX: TCL)

The Transurban share price is steady at $12.96 on Thursday.

Morgans has a trim rating on this ASX 200 industrials share. 

The broker said: 

TCL has increased its exposure to the Sydney market via acquisition of additional equity stakes in key tollroads.

While we view positively the deployment by TCL of capital into markets and assets that it knows well, we struggle to see the cashflow benefit for investors at the acquisition price paid particularly in the context of the higher rate environment.

Target price -50 cps to $12.03/s as a result of the forecast update and adjusting our DCF discount rate higher to part-risk for the rise in risk-free rates.

We retain a TRIM rating at current prices, given potential TSR of -3%.

The post Buy, hold, sell: IDP Education, Macmahon Holdings, Transurban shares appeared first on The Motley Fool Australia.

It also comfortably exceeds what the Association of Superannuation Funds of Australia (ASFA) determines is necessary for a comfortable retirement.

It's a solid amount of money to support a good retirement lifestyle, but there is an additional bonus. A balance as high as $950,000 can also generate a great passive income from ASX dividend shares.

Here's how much you could earn.

What passive income could a $950,000 superannuation balance generate?

To calculate your potential annual passive income, you need to multiply your total superannuation balance by the overall dividend yield of your portfolio.

But obviously, the answer changes depending on what that yield is.

Generally, as your yield goes up, the passive income you can earn off the same balance also increases.

Break it down for me by yield

If your portfolio is low-yielding, at around 3%, you'll be able to earn around $28,500 per year in passive income. That's because $950,000 x 3% = $28,500 in dividend payments.

There are lots of stable options around this level. Investment bank Macquarie Group Ltd (ASX: MQG) yields around 3%, as does banking giant Commonwealth Bank of Australia (ASX: CBA) and conglomerate Wesfarmers Ltd (ASX: WES).

Then, if you increase your yield closer to 4%, you could earn a little more. A $950,000 portfolio could generate around $38,000 per year at this yield.

There are still lots of great options around the 4% level. Think mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO), or telcos like Telstra Group Ltd (ASX: TLS). Some of the other major banks, including National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ) also yield around this level at the time of writing.

If you can raise your yield higher towards 5%, your passive income would increase to around $47,500 every year. 

My top 5% yielding ASX shares would be defensive infrastructure companies like Transurban Group Ltd (ASX: TCL) or Dalrymple Bay Infrastructure Ltd (ASX: DBI). 

Raise your portfolio's yield even higher to 6% and you could earn a $57,000 annual dividend income off the same superannuation portfolio. That's a decent passive income!

Around this level, I'd lean towards shares like APA Group Ltd (ASX: APA) or AGL Group Ltd (ASX: AGL). These both have a long history of paying long term reliable dividends to shareholders and they also yield around the 6% level.

Can't I just invest in the highest yield stock I can find so I can earn more off my superannuation balance?

There are dividend shares available which pay much higher yields, some which even exceed over 15%. 

But remember, the general rule is that the higher the yield, the more volatility and risk associated with that stock.

When it comes to ASX dividends, high-yielding shares could be cyclical businesses that fluctuate significantly with market cycles, niche companies with strong cash conversion, or perhaps they have discounted share prices. 

It doesn't mean high-yield shares should be avoided, but instead, they should be part of a diversified portfolio.

The post How much passive income can I earn from a $950,000 superannuation balance? appeared first on The Motley Fool Australia.

But how much passive income could it actually generate?

Let's run the numbers and find out.

What could $100,000 generate?

A reasonable target for an income-focused ASX portfolio could be a dividend yield of around 4% to 5%.

At a 4% yield, a $100,000 portfolio would generate approximately $4,000 in passive income each year.

Increase the yield to 5% and that rises to $5,000 annually. That is before tax and does not include the potential benefit of franking credits.

I wouldn't simply search the ASX for the shares offering the biggest dividend yields, though. Very high yields can sometimes be a warning sign that investors expect the dividend to be reduced.

Instead, I would look for businesses with sustainable cash flows and a reasonable prospect of maintaining or growing their distributions over time.

Infrastructure stocks could play a role. APA Group (ASX: APA), for example, owns energy infrastructure that generates relatively predictable cash flows, while Transurban Group (ASX: TCL) collects toll revenue from major road networks.

Property could provide another source of income. HomeCo Daily Needs REIT (ASX: HDN) owns assets exposed largely to everyday spending and currently offers a higher distribution yield than many traditional blue-chip shares.

These could be mixed with established dividend payers such as Wesfarmers Ltd (ASX: WES), rather than relying too heavily on any individual company or sector.

Another way to use the $100,000

There is also an alternative for investors who don't need the passive income today.

Rather than immediately building a portfolio around dividends, I think there is a strong case for focusing on total returns and allowing the $100,000 to compound for longer.

For example, if $100,000 grew at an average rate of 10% a year with all income reinvested, it could become approximately $260,000 after 10 years.

At a 5% yield, that larger balance could then generate around $13,000 in annual passive income.

After 20 years, the same $100,000 could grow to approximately $670,000 at that return.

A 5% yield on that balance would generate around $33,500 a year.

Of course, a 10% annual return isn't guaranteed.

But I think it shows why investors with time on their side may want to concentrate on growing the portfolio first and worry about maximising passive income later.

The post How much passive income can I make from a $100,000 ASX share portfolio? appeared first on The Motley Fool Australia.