Some companies dominate ASX headlines daily — banks, iron ore giants, energy producers. And then there’s Iress Limited (ASX: IRE): a business that doesn’t always make noise but plays a crucial role inside Australia’s financial system.

Iress builds and operates software, data systems, trading platforms, wealth management tools, and superannuation administration services. In simple words, it’s one of the behind-the-scenes engines that help financial professionals run advice platforms, process trades, and manage portfolios.

But Iress is not a fast-growing Silicon Valley tech rocket. Nor is it a sleepy dividend machine. It is a company in transition, working through a multi-year transformation with mixed results. That makes the investment question interesting — and a little complex:
Should you buy, hold, or sell Iress right now?

Let’s break it down with what’s working, what’s worrying, and what investors must watch before making a decision.

What’s Going Well for Iress?

1. A Return to Profitability and a Clearer Strategic Focus

After a tough prior year, Iress bounced back into profit in FY2024, reporting:

1. Net Profit: ~$88.7 million
2. Revenue: ~$600.8 million
3. EBITDA: ~$100.9 million

These aren’t explosive growth numbers, but the turnaround matters.
The company has been actively slimming down, divesting non-core businesses such as:

1. Platform administration,
2. Mortgage comparison tools,
3. And other legacy segments.

This “back-to-core” strategy is designed to make Iress leaner, simpler, and more focused on what it does best — high-margin software and data services for financial institutions.

Fewer distractions, fewer low-return operations, and clearer business priorities help improve margins and reduce operational risk.

For investors, profitability returning after a period of stress is a meaningful signal. It shows management is getting the ship back on course.

2. Global Exposure + Long-Term Structural Tailwinds

While many think of Iress as an Australian company, it actually has a broad international footprint across:

1. the UK,
2. Europe,
3. South Africa,
4. Asia Pacific.

This diversification is valuable in a world where advice, wealth management, and digital trading are expanding globally.

And there are real tailwinds in Iress’ core markets:

1. A growing shift to digital financial advice
2. The massive intergenerational wealth transfer already underway
3. Rising demand for connected platforms across brokers, advisers, and investment managers
4. Regulatory pushes encouraging more transparency and tech adoption

Iress is positioned as one of the players that can benefit if financial firms continue upgrading their technology stacks — which seems likely.

3. Reasonable Valuation and Healthy Return Metrics

Iress today trades around:

1. PE ratio: ~20×
2. Dividend yield: ~2.2%
3. Return on Equity (ROE): ~25.92%

A 20× PE is not dirt cheap, but for a global software provider with recurring revenues, it’s not overstretched either.

The ROE of nearly 26% is particularly notable — it shows the business generates strong returns on the capital it uses, even after the restructuring phase.

The dividend is modest, but steady.

Overall, valuation doesn’t scream “bargain,” but it also doesn’t scream “bubble.”

What’s Concerning?

1. Legal, Regulatory, and Execution Risks Are Real

The biggest immediate overhang is the legal case with ESSSuper, which alleges contract underperformance, mis-reporting, and under-payments on Iress’ superannuation administration services.

Legal processes are slow, expensive, and reputationally damaging — especially for a company whose customers expect precision, security, and reliability.

Then there’s the May 2024 data breach incident, where stolen credentials were used to access a production environment of its OneVue platform.
While Iress confirmed no client data was compromised, the incident raises:

1. Cybersecurity questions,
2. Potential cost implications,
3. And trust issues.

These risks are not fatal, but they are meaningful.

2. Modest Dividend Yield

For income-focused investors, Iress’ ~2.2% yield isn’t compelling compared to high-yield ASX options in:

1. Banks
2. Energy

This means Iress is not an income stock. If steady, high dividends are your priority, this is not the right fit.

3. Execution Risk Remains the Big Question

Iress has potential — but potential is not performance.

A lot depends on whether management can actually deliver on the transformation plan. That means:

1. returning core revenue to consistent growth,
2. improving margins,
3. stabilising cashflows,
4. and rebuilding business confidence.

The company has repeatedly talked about “focus,” “reset,” and “turnaround.”
But investors want to see:

consistent, multi-year execution — not just one good year.

Until that happens, sentiment may remain cautious.

So… Should You Buy, Hold or Sell Iress?

If you already own Iress — HOLD looks sensible.

The company is showing progress:

1. profitability is back,
2. the balance sheet is improving,
3. the core business is clearer.

But risks remain, and the big growth inflection is still ahead — not behind.
Holding gives you exposure to the upside if execution improves, without having to bet heavily on more transformation risk.

If you’re thinking of buying — it’s a cautious BUY, not a strong BUY.

You might consider buying a partial position if you believe in the longer-term story:

1. stable global recurring revenue
2. digital-advice and wealth-management tailwinds
3. improving margins as non-core businesses exit
4. potential takeover interest (a recurring theme in past years)

But this is not a low-risk stock.

It’s a medium-risk, modest-growth software play in the middle of a transformation.
You’re betting on management execution — and that always comes with uncertainty.

If you want high yield or very low risk — SELL or avoid.

If you’re a conservative investor wanting:
predictable dividends
stable cashflows
minimal execution risk
low volatility

…then Iress is unlikely to satisfy.
The yield is modest, and the risk profile is higher than traditional income stocks.

What Would Upgrade Iress to a Strong BUY?

Look for these triggers:

1. Consistent 5–10% annual revenue growth from the core business

Not one year — but several.

2. Meaningful margin expansion

A cleaner, leaner business should eventually show this.

3. Resolution of the ESSSuper legal case

A settlement or clarification would remove a major uncertainty.

4. More compelling capital returns

Either a higher dividend or a meaningful share buyback program.

If these four signals appear, Iress could move from a niche turnaround play to a genuine software growth story.

Final Verdict

Iress is at an inflection point.
It’s no longer struggling, but it’s not yet firing on all cylinders.

1. HOLD if you own it.
2. CAUTIOUS BUY if you believe in the turnaround.
3. SELL/AVOID if you want stable, high-yield income or very low risk.

This is a stock for investors who are comfortable with transformation stories — people willing to wait and see if Iress can turn its strategic focus into real, sustainable growth

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

Penny stocks are often the hidden corners of the stock market — full of risk, but also brimming with potential. For investors who can handle short-term volatility, the right small-cap stocks can deliver remarkable long-term returns, especially when bought ahead of a strong earnings season.

Two such ASX-listed penny stocks that are gaining investor attention before their upcoming earnings are Alfabs Australia Ltd (ASX: AAL) and HighCom Ltd (ASX: HCL). Both operate in very different industries — one serving the heavy mining sector and the other supplying defence technology — but each offers a distinct story of improving fundamentals and potential re-ratings ahead.

Let’s dive into what’s making these two names worth watching right now.

1. Alfabs Australia Ltd (ASX: AAL) — A Mining & Industrial Services Player Gaining Traction

What the Company Does

Alfabs Australia is a diversified industrial services group headquartered in Newcastle, New South Wales. The company specialises in equipment hire, steel fabrication, mining maintenance, transport, protective coatings, and engineering support. Essentially, Alfabs provides the behind-the-scenes muscle that keeps Australia’s mining, energy, and infrastructure projects running smoothly.

Latest Financial Performance

For the financial year ended 30 June 2025, Alfabs delivered:

Revenue: ~$95 million

Net Profit After Tax (NPAT): Around $12.2 million

Dividend per share: $0.02 (Dividend yield: ~6.67%)

That’s a notable result for a company still classified as a penny stock. What’s particularly interesting is that profits grew meaningfully despite flat revenues, suggesting that management executed well on cost controls and higher-margin contracts.

Why Investors Are Watching Before Earnings

Alfabs’ story has started to shift from a traditional low-margin industrial firm to a company showing clear signs of operational leverage. A few key reasons have investors keeping this one on their radar:

1. Margin Expansion Potential — The profit growth in FY25 indicates improved efficiency and disciplined cost management. If this trend continues into FY26, Alfabs could surprise on the upside.
2. Transition to Cash-Generative Business — Consistent dividends and a stronger profit base show that Alfabs may be entering a more stable, cash-positive phase — a sign of maturity for any small-cap stock.
3. Sector Tailwinds — The mining and industrial services sectors remain supported by ongoing infrastructure and resources investment. As major miners ramp up maintenance and equipment upgrades, Alfabs stands to benefit.
4. Low Market Expectations — With limited analyst coverage, any positive surprise in upcoming results could trigger outsized moves in the share price.

Bottom Line on Alfabs

Alfabs looks like a small-cap quietly executing on its turnaround. With a consistent dividend, improving profitability, and exposure to essential industrial services, AAL could be one to watch closely as earnings season approaches. If management can demonstrate another quarter of operational strength, the market may finally start taking this name more seriously.

2. HighCom Ltd (ASX: HCL) — Defence Technology with Turnaround Potential

What the Company Does

HighCom Ltd operates in the defence, security, and protective technology sector — a space that’s gaining momentum globally amid heightened geopolitical risks and rising defence budgets.

The company provides ballistic armour, tactical gear, forensics tools, and security technology for military, law enforcement, and commercial clients. Its operations are divided into two key divisions:

1. HighCom Armor — protective and ballistic equipment manufacturing.
2. HighCom Technology — security, surveillance, and forensic systems.

This diversification gives the company exposure to both product manufacturing and high-tech service solutions.

Financial Highlights

For FY2025 (ended June 2025):

1. Revenue: $48.11 million
2. Net Loss After Tax: Approximately $1.19 million, narrowing by nearly 90% year-over-year.

The most encouraging sign? The business is approaching profitability after significant cost restructuring and operational improvements. Analysts following the stock believe that if contract wins continue and product demand grows, HCL could swing into profit within the next 12 months.

Why Investors Are Watching Before Earnings

HighCom’s setup heading into earnings season is a classic small-cap turnaround case. Here’s what’s attracting investor attention:

1. Major Cost Reductions Paying Off — The sharp reduction in losses shows that management’s efficiency drive is working. Investors will be looking for confirmation that margins are improving and that the company is on track to profitability.
2. Niche Exposure to Defence and Security — The company’s specialised product range — including armour plates, helmets, and ballistic protection — is in demand globally. Increased government spending on defence and security could be a major tailwind.
3. New Contracts and Product Launches — HCL has hinted at upcoming contract announcements and potential export growth, which could provide fresh catalysts in its next earnings report.
4. Low Valuation Base — As a penny stock, even modest earnings improvements can lead to significant percentage gains if the market starts to price in future profitability.

Bottom Line on HighCom

HighCom offers a speculative but potentially rewarding opportunity. With losses narrowing, cost structures improving, and defence spending trends moving in its favour, HCL’s next earnings could be a pivotal moment. A small earnings surprise could spark renewed market confidence.

Balancing Risk and Reward

Both Alfabs Australia (AAL) and HighCom Ltd (HCL) sit firmly in the high-risk, high-reward corner of the ASX. But what sets them apart from typical penny stocks is their improving fundamentals and strategic positioning heading into earnings season.

AAL provides exposure to Australia’s industrial and mining backbone, offering steady cash flow and dividends.

HCL gives investors a chance to tap into defence and security technology with turnaround potential.

For aggressive investors with a tolerance for volatility, these two stocks represent compelling opportunities ahead of earnings season. As always, due diligence is key — but in the world of small caps, the right timing can make all the difference.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

Penny stocks are often dismissed as speculative and risky — companies that burn cash faster than they make it. But every once in a while, a few of them stand out by attracting the attention of When you think of electronics in Australia, one name usually comes to mind — JB Hi-Fi Ltd (ASX JBH). From buzzing yellow price tags to crowded weekend stores, JB Hi-Fi has become a household name. But beyond being the go-to retailer for gadgets, it has also been one of the most consistent performers on the ASX.

Over the past decade, the company has repeatedly defied skeptics — delivering steady earnings, strong dividends, and market-beating returns. Yet, with inflation, changing consumer habits, and fierce online competition, the question for investors today is clear: can JB Hi-Fi continue outperforming the market?

A Look at the Numbers — Still Impressive

Despite a challenging retail environment, JB Hi-Fi has kept the momentum going. For the financial year ended 30 June 2025, the company reported total sales of $10.55 billion, up 10% year-on-year — a solid result in an economy where discretionary spending has been under pressure.

Net profit after tax (NPAT) rose 5.4% to $462.4 million, while underlying NPAT — excluding one-off costs of $13.7 million — came in around $476 million, reflecting healthy operational strength.

Earnings per share (EPS) stood at 423 cents, and on an underlying basis, closer to 436 cents. Even as consumer budgets tightened, JB Hi-Fi managed to preserve margins through cost control and efficient inventory management.

The company’s online sales surged to $1.19 billion, making up roughly 17% of total revenue — a testament to its seamless omnichannel strategy.

And for shareholders? They were well-rewarded. JB Hi-Fi declared a fully-franked final dividend of 105 cents per share and a special dividend of 100 cents, highlighting the company’s robust balance sheet and strong cash flow. Going forward, management also announced an increase in its payout ratio from around 65% to 70–80% of NPAT starting FY26 — a clear commitment to rewarding investors.

Leadership Transition — A New Era Begins

After over a decade of steering the company’s success, long-serving CEO Terry Smart announced his retirement in October 2025. Taking the reins will be Nick Wells, JB Hi-Fi’s current CFO and COO.

This leadership change is seen as evolutionary rather than revolutionary — Wells has been part of the strategic team that has helped JB Hi-Fi maintain its strong performance. Investors are optimistic that continuity in management will ensure the company stays on its winning path.

Why Analysts Still Like JB Hi-Fi

Most market analysts maintain a bullish outlook on JB Hi-Fi — but with a dose of realism. Let’s break down both sides.

The Bullish Case

1. Rock-Solid Brand and Loyal Customer Base
   JB Hi-Fi is more than just a retailer — it’s part of Australia’s consumer culture. Its no-frills stores, competitive prices, and reliable service keep customers coming back. Whether it’s a new phone, TV, or laptop, JB Hi-Fi is the first stop for millions of Aussies.
2. Omnichannel Strength
   While many retailers struggled to adapt to online shopping, JB Hi-Fi got the mix right. Its hybrid model — where customers can browse online, buy in-store, or click-and-collect — has created a sticky ecosystem that competitors struggle to replicate.
3. Smart Expansion into Premium Markets
   The acquisition of a 75% stake in e&s Trading Co., a premium home appliance retailer, is a game-changer. It allows JB Hi-Fi to tap into higher-margin categories like kitchen and bathroom appliances, targeting affluent customers and diversifying away from core electronics.
4. Shareholder Value and Cash Flow Discipline
   JB Hi-Fi’s focus on maintaining a lean cost structure and strong free cash flow ensures reliable dividend payouts — a key attraction for income-focused investors.

The Bearish Case

1. Tight Margins and Rising Costs
   The electronics retail space is intensely competitive. JB Hi-Fi’s gross margins slipped around 20 basis points in FY25 due to promotional activity and rising logistics costs. While scale helps offset some of this pressure, there’s limited room to expand margins further.
2. Macroeconomic Headwinds
   With interest rates and living costs still high, discretionary spending could take a hit. Consumers might delay buying that new TV or smartphone — directly impacting JB Hi-Fi’s sales growth.
3. Competitive Threats
   Global players like Amazon and local online-only retailers continue to nibble at market share, offering aggressive pricing and convenience. Maintaining JB Hi-Fi’s edge will require ongoing innovation and digital investment.

Why It Could Still Outperform

Despite headwinds, there are strong reasons why JB Hi-Fi could continue to beat the broader market.

1. Brand Power + Scale Advantage
   Its dominant position allows JB Hi-Fi to negotiate favorable terms with suppliers, maintain competitive pricing, and sustain market share even in tight environments.
2. Digital Transformation Done Right
   Unlike many legacy retailers still playing catch-up, JB Hi-Fi’s digital strategy is already paying off. Its $1.19 billion online revenue and efficient integration with physical stores give it a crucial advantage in the omnichannel retail war.
3. Premium Segment Expansion
   The e&s acquisition provides entry into a higher-margin market segment. Over time, this could smooth out JB Hi-Fi’s earnings cycle and enhance profitability.
4. Strong Balance Sheet + Shareholder Focus
   Low debt, high cash reserves, and an increased dividend payout ratio all signal financial confidence. The company’s consistent history of returning capital to shareholders adds another layer of appeal.
5. Experienced Leadership and Culture of Efficiency
   Even with leadership transition, JB Hi-Fi’s internal culture — disciplined operations, customer focus, and cost efficiency — remains deeply embedded.

Risks to Keep in Mind

No company is immune to challenges. Investors should monitor:

1. Economic slowdown impacting discretionary spending
2. Margin pressure from inflation and promotions
3. Rising competition from online and global retailers
4. Integration risk from e&s acquisition affecting short-term earnings

The Verdict — A Retail Titan with Steady Strength

JB Hi-Fi isn’t a flashy growth stock anymore — it’s a steady compounder. It may not double overnight, but its combination of brand strength, solid financials, digital adaptability, and shareholder-friendly policies make it one of the most dependable companies on the ASX.

In an era where many retailers are struggling to balance growth and profitability, JB Hi-Fi continues to strike that balance perfectly. It’s not just surviving the retail evolution — it’s shaping it.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

As global markets continue to wrestle with inflation, rising interest rates, and geopolitical tensions, gold is once again regaining its luster. Traditionally seen as a safe-haven asset, gold tends to shine brightest when uncertainty clouds investor sentiment. But in 2025, it’s not just the gold price that’s catching attention—it’s the gold miners that pay consistent dividends.

For income-seeking investors, gold miners that offer both steady payouts and growth potential are particularly attractive. Two names that stand out on the ASX are Northern Star Resources Ltd (ASX: NST) and Rand Mining Ltd (ASX: RND). Both companies combine strong operations, disciplined management, and reliable dividends, positioning them to deliver golden income streams in the year ahead.

Northern Star Resources Ltd: Dividend Powerhouse with Scale

Northern Star Resources is one of Australia’s largest and most respected gold producers, operating major mining hubs at KCGM (Kalgoorlie), Jundee, and Pogo. Over the past decade, Northern Star has transformed itself from a mid-tier miner into a globally recognized name—thanks to strategic acquisitions, efficient cost control, and a relentless focus on shareholder value.

In FY25, the company once again demonstrated its financial strength:

1. Total revenue surged to $6.41 billion, reflecting near-record gold sales even amid some temporary operational disruptions.
2. Record final dividend: 30 cents per share, bringing the full-year payout to 55 cents, marking a new all-time high for the company.
3. Dividend yield: Around 2.6% at recent market prices, a solid return for a top-tier miner.
4. Net cash position: A hefty $1.69 billion, underscoring its robust balance sheet.
5. Shareholder returns: Over $840 million returned via dividends and buybacks during FY25.

Northern Star’s underlying EBITDA continues to trend upward, supported by steady output and disciplined operations. The company’s project pipeline also looks healthy, with the KCGM mill expansion and Hemi development project expected to boost production and efficiency over the coming years.

For FY26, management has guided for gold production in the range of 1.7–1.85 million ounces, which should comfortably support another year of strong cash generation and consistent dividends.

In short, Northern Star is more than just a gold miner—it’s a cash-generating powerhouse with a proven ability to balance growth investment and shareholder rewards.

Rand Mining Ltd: Boutique Producer with a Surprise Yield

While Northern Star is a giant, Rand Mining Ltd (ASX: RND) represents the opposite end of the spectrum—a small-cap gem that has quietly built a reputation for outstanding dividend yields. Based in Western Australia’s East Kundana district, Rand operates with efficiency and minimal debt, benefiting from low production costs and strong operational partnerships.

Its FY25 results highlight the power of disciplined small-scale mining:

1. Revenue: $43.3 million, up 24.5% year-over-year.
2. Net income: $13.1 million, nearly double FY24’s earnings.
3. Dividend: Fully-franked 10 cents per share in December 2024, translating to an annualized yield of around 6.6%.

Rand’s management has a history of returning surplus cash directly to shareholders through special dividends, which can significantly boost total returns during strong operational years. This approach reflects a shareholder-first mindset, making the stock particularly appealing to those who value tangible, consistent rewards.

Despite being smaller in scale, Rand Mining’s lean cost structure and profitable operations enable it to deliver returns that rival larger peers. Its exposure to high-quality gold assets and minimal debt load make it a resilient income option in a volatile sector.

Why These Gold Dividend Stocks Stand Out

Both Northern Star and Rand Mining offer investors something rare in the gold space—a blend of yield and growth. Here’s why they’re worth keeping on your watchlist in 2025:

1. Exposure to Rising Gold Prices:
   With global inflation still elevated and central banks maintaining large gold reserves, gold prices could remain strong through 2025. Both NST and RND are well-positioned to capitalize, translating higher gold prices directly into improved margins and potential dividend growth.
2. Strong Balance Sheets:
   Northern Star’s multi-billion-dollar cash reserves and Rand’s debt-free status mean both companies have financial flexibility to sustain payouts even in volatile markets.
3. Operational Leverage:
   Any uptick in production or efficiency gains has an outsized impact on profits—and consequently on dividend capacity. Northern Star’s ongoing projects, in particular, could boost free cash flow substantially.
4. Yield with Growth:
   Northern Star offers moderate yield with growth stability, while Rand Mining delivers higher yield with special dividend potential. Together, they present a balanced approach for investors seeking both income and upside.
5. Inflation Hedge:
   Gold has historically been one of the best hedges against inflation. Adding dividend-paying gold miners to a portfolio provides not only price appreciation potential but also a steady cash return, making it a dual-benefit investment.

The Bigger Picture: Gold’s Renewed Appeal

Looking beyond company specifics, 2025 could be another strong year for gold itself. Persistent geopolitical tensions, uncertainty in global growth, and the possibility of central banks slowing interest rate cuts all contribute to a favorable environment for gold prices.

Moreover, demand for physical gold and gold ETFs remains robust, especially in emerging markets like India and China. This global demand backdrop supports a stable to rising gold price range, creating ideal conditions for cash-rich gold miners to continue rewarding shareholders.

Conclusion: Golden Income for 2025

If you’re looking to balance defensive income with exposure to precious metal upside, Northern Star Resources and Rand Mining stand out as two compelling ASX-listed options for 2025.

1. Northern Star offers scale, consistency, and reliability, backed by strong operations and a disciplined capital strategy.
2. Rand Mining provides higher yields and nimble execution, ideal for investors seeking more direct exposure to dividend fluctuations tied to gold’s performance.

Both companies have demonstrated that it’s possible to enjoy the defensive qualities of gold while still earning regular, attractive income. As 2025 unfolds and gold remains a focal point for investors seeking safety and returns, these two dividend-paying gold miners could truly shine.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

In a world marked by geopolitical uncertainty, rising defense budgets, and rapid technological advancement, the defense sector has become a hotbed of opportunity for investors. While major defense contractors often dominate headlines, it’s the smaller, agile players—those developing innovative technologies and niche solutions—that are capturing attention for their growth potential.

Two such promising names on the ASX are HighCom Limited (ASX: HCL) and Titomic Limited (ASX: TTT). Both are defense penny stocks—trading at relatively low prices—but are backed by strong innovation, growing order books, and expanding global footprints. In a volatile environment, these companies stand out as potential long-term winners.

HighCom Limited: Advanced Defence Tech with Growing Orders

HighCom Limited is fast emerging as one of the most interesting small-cap defense technology firms in Australia. The company designs and manufactures advanced ballistic protection, armor systems, and counter small uncrewed aerial systems (C-SUAS). These solutions cater to a growing global market where governments and security agencies are rapidly upgrading their defense infrastructure to counter modern threats such as drones and urban warfare.

Strategic Growth and Operations

HighCom’s major strength lies in its technological innovation and manufacturing scalability. The recent recommissioning of its XTclave system in Ohio has doubled its production capacity in the United States—a vital move considering the U.S. remains the world’s largest defense market. This facility supports ballistic armor production and advanced composite materials manufacturing, enabling the company to meet increasing global demand.

Financial Highlights

1. FY25 Revenue: $48.1 million, reflecting a 6% year-on-year increase.
2. Net Loss: Reported a small loss for FY25 but showed a marked improvement from prior years, indicating operational progress.
3. Order Book: Strengthened by several significant contracts, including a $2.6 million C-SUAS deal and an $8.9 million order for ballistic products.
4. Share Price Performance: The stock gained 25% in 2025, defying broader sector volatility.

HighCom’s growth story is backed by a clear focus on innovation and execution. The company’s ability to win new contracts—even amid economic uncertainty—demonstrates the growing demand for its defense-grade technologies.

With more countries ramping up their defense spending, HighCom is well-placed to benefit from these macro tailwinds. The company’s expanding U.S. operations and steady revenue growth signal that it’s moving closer to sustainable profitability.

The Investment Case

HighCom’s edge lies in its ability to deliver real-world defense solutions with immediate applicability. Ballistic armor, drone countermeasures, and protective systems are increasingly essential to both military and law enforcement operations. As global security risks persist, HighCom’s products remain in high demand.

For investors, HighCom presents a compelling mix of innovation, revenue momentum, and market relevance—all wrapped within an attractively priced penny stock.

Titomic Limited: World Leader in Additive Manufacturing for Defence

If HighCom focuses on protection, Titomic Limited (ASX: TTT) is revolutionizing production. The company is a world leader in cold spray additive manufacturing, a cutting-edge process that creates strong, lightweight metal components for defense, aerospace, and industrial applications.

Unlike traditional 3D printing, Titomic’s cold spray process fuses metal powders at supersonic speeds, producing parts that are not only stronger but also more cost-efficient and faster to produce. This technology has game-changing implications for defense manufacturing—enabling lighter vehicles, durable weapon systems, and faster maintenance cycles.

Strategic Expansion in the U.S.

Titomic’s new 59,000 sq. ft. headquarters in Huntsville, Alabama—a hub for the U.S. defense and aerospace industries—marks a major milestone in its international expansion. This facility anchors Titomic in one of the world’s most advanced defense ecosystems, positioning it to secure contracts with top-tier defense contractors and government agencies.

The company is also investing heavily in R&D and leadership. With former senior military officers joining its executive team, Titomic is aligning its expertise with defense priorities, strengthening its credibility within the industry.

Financial Highlights

1. FY25 Revenue: $8.1 million, up 37% from FY24’s $5.9 million.
2. Capital Raises: Successfully raised $80 million to fund U.S. expansion and product innovation.
3. Net Loss: $19.9 million, typical of a scaling tech firm investing in growth.
4. Strategic Hires: Strengthened leadership team with industry veterans and defense experts.
5. Global Presence: Established new R&D and production facilities across the U.S. and Europe.

Titomic is clearly in the growth phase—investing heavily in technology, infrastructure, and partnerships. While it’s yet to achieve profitability, the company’s consistent revenue growth and strategic global positioning make it a strong contender in the emerging defense-tech landscape.

The Investment Case

Titomic’s potential lies in its disruptive technology and the scale of its addressable market. The global defense sector is actively seeking cost-effective, high-performance manufacturing solutions—and Titomic’s additive technology fits that need perfectly.

Its partnerships and capital strength provide the foundation for future contract wins, making it an exciting long-term growth play in the defense manufacturing sector.

Why Watch These Stocks?

In a volatile global environment, defense spending is one of the few areas seeing consistent growth. Nations are prioritizing security, modernization, and technological self-sufficiency—creating strong tailwinds for companies like HighCom and Titomic.

Here’s why these two penny stocks deserve a place on investors’ radar:

1. Defence Sector Tailwinds

Global defense spending has surpassed US$2.5 trillion, with rising investments in modernization, drone defense, and cybersecurity. Both HighCom and Titomic are direct beneficiaries of this trend.

2. High Innovation

Innovation is at the heart of both businesses.

1. HighCom leads in ballistic armor and counter-drone systems.
2. Titomic is pioneering additive manufacturing technologies with defense-grade applications.

3. U.S. Market Expansion

Both companies are scaling operations in the U.S., the largest defense market globally. This provides access to larger contracts, greater visibility, and potential partnerships with major defense contractors.

4. Improving Financials

Even though both firms are early in their growth journeys, they are showing consistent revenue growth and operational improvements. The move toward profitability seems well within reach as their order pipelines expand.

5. Undervalued Penny Stocks

At their current market caps, both HighCom and Titomic remain undervalued compared to their technology potential and industry relevance. For investors with higher risk tolerance, they offer significant upside if execution continues as planned.

Conclusion: Niche Technology Leaders in Defence

In an increasingly unpredictable world, defense technology is no longer just about size—it’s about innovation and adaptability. HighCom Limited and Titomic Limited exemplify this shift.

Both companies are carving out strong positions in their respective niches—HighCom with protective and counter-drone systems, and Titomic with next-generation manufacturing solutions. As geopolitical tensions remain elevated and defense spending accelerates, these small but ambitious players are poised to benefit from powerful global trends.

For investors seeking exposure to the defense sector without paying premium valuations for large contractors, HighCom and Titomic represent two ASX-listed penny stocks worth watching closely in 2025–26.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

The Australian technology sector has been buzzing with activity in 2025. While large-cap giants dominate headlines, it’s often the small-cap players that quietly deliver strong growth and capture new opportunities. These companies may not yet be household names, but they are steadily carving out market share and building solid financial momentum.

Two such stocks—Aussie Broadband Ltd (ASX: ABB) and Nuix Ltd (ASX: NXL)—have recently landed on multiple analyst buy lists. Both companies operate in very different spaces: Aussie Broadband in high-speed internet services and Nuix in forensic analytics and AI. Yet, they share one thing in common—analysts see them as high-potential growth stories in the years ahead.

Let’s dive into why ABB and NXL are catching investor attention, the numbers backing their performance, and what risks you should be mindful of.

Aussie Broadband (ASX: ABB): Scaling Up in the Telco Market

Aussie Broadband has long been regarded as the challenger brand in Australia’s telco market. Known for its strong customer service and competitive pricing, ABB has steadily grown from a niche broadband provider to one of the country’s fastest-growing telecom players.

FY25 Performance:

The numbers tell a compelling story:

1. Revenue surged 18.7% year-on-year, reaching $1.19 billion.
2. Underlying EBITDA climbed 14.7% to $138.2 million, hitting the top end of guidance.
3. Net profit after tax jumped 24.5% to $32.8 million, showcasing stronger operational efficiency.

Customer acquisition remains ABB’s crown jewel. On-net broadband connections rose over 15% to 788,400 subscribers, lifting market share to 8.4%, an increase of 1.1 percentage points. This growth isn’t just about adding users—it’s about ABB proving it can consistently take share from bigger incumbents.

The company’s wholesale arm is also building traction. A six-year wholesale contract with MORE Telecom is expected to bring steady revenue streams through FY27, giving ABB additional scale and stability.

Analyst Perspective:

Brokers are optimistic. Forecasts suggest EBITDA could reach $161 million by FY26, with subscriber numbers potentially hitting 800,000 by FY28. Analysts point to ABB’s dual strategy of retail growth and wholesale expansion as key drivers of its long-term upside.

Nuix (ASX: NXL): Riding the AI and Forensics Wave

If Aussie Broadband is about connecting homes and businesses, Nuix is about connecting the dots in data. The company builds investigative analytics and forensic software, with applications ranging from corporate compliance to government investigations.

After a few rocky years post-IPO, Nuix has been quietly regaining investor confidence, especially with the rollout of its AI-powered forensic analytics platform, Nuix Neo.

FY25 Results:

Nuix’s performance this year marks a turning point:

1. Annual Contract Value (ACV) rose 8% overall, but the real standout was Nuix Neo, which delivered a 132% surge in ACV.
2. Cash EBITDA improved 24.5%, reflecting better operational leverage.
3. Operating cash flow remained positive, helping the company strengthen its balance sheet.

Looking forward, management has guided for ACV between $197 million and $205 million in FY25, signaling double-digit growth compared to prior years.

Market Traction:

Nuix is signing multi-year contracts with government agencies and large corporates, a clear indicator of trust in its platform. Its global reach is also expanding, with AI-driven solutions being deployed across North America, Europe, and Asia.

Analyst View:

Analysts argue that Nuix is now a compelling long-term play on the growing demand for digital investigations. As cybercrime, compliance requirements, and corporate litigation rise, Nuix’s solutions are increasingly mission-critical. While valuation multiples are moderate today, analysts believe stronger cash flows could unlock significant upside in the medium term.

Risks Investors Should Watch

Of course, no investment comes without risks. Both companies operate in competitive and fast-moving markets where execution is key.

1. For ABB: Regulatory changes in Australia’s broadband market, including NBN upgrades, could impact margins. Competition from larger telcos also remains intense, forcing ABB to constantly innovate and maintain price competitiveness.
2. For Nuix: Growth depends on scaling its new AI-driven products and maintaining credibility in sensitive industries. Any missteps in data privacy, product performance, or regulatory compliance could set back its progress.

Final Thoughts

When investors think of tech, they often look at giants like Atlassian or Afterpay (before its buyout). But some of the most exciting stories today are unfolding in the ASX small-cap tech space.

Aussie Broadband and Nuix represent two very different but equally dynamic growth stories. ABB is building scale and credibility as a serious telco competitor, while Nuix is tapping into one of the most pressing needs of the digital age—making sense of vast amounts of data through AI and forensics.

Both stocks come with risks, but with strong recent results, improving financials, and clear analyst support, they deserve a closer look from investors seeking exposure to innovation and digital growth in Australia.

For those willing to tolerate some volatility in exchange for the potential of outsized returns, ABB and NXL look like small caps worth keeping on the radar in 2025 and beyond.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

Penny stocks are often dismissed as speculative and risky — companies that burn cash faster than they make it. But every once in a while, a few of them stand out by attracting the attention of institutional investors — those professional fund managers and strategic players who usually avoid small, illiquid names. When institutions start buying, it often signals that there’s more to the story than meets the eye.

Two such ASX-listed penny stocks — Micro-X Ltd (ASX: MX1) and Bhagwan Marine Ltd (ASX: BWN) — have been making quiet but meaningful progress, not just in their operations but also in gaining confidence from large investors. Despite operating in very different industries, both are showing encouraging signs of growth and financial strength that could make them long-term winners.

Penny stock 1: Micro-X Ltd (ASX: MX1)

The Company at a Glance

Headquartered in South Australia, Micro-X Ltd is a pioneering medical technology company specializing in compact X-ray and imaging systems. What makes Micro-X stand out is its use of carbon nanotube (CNT) technology — a game-changing advancement that allows the company to produce smaller, lighter, and more energy-efficient X-ray devices compared to traditional systems.

The company isn’t limiting itself to hospitals either. Its innovations extend into defence, security, and airport screening — sectors that demand portable and high-performance imaging. This diversification helps Micro-X balance its revenue streams across both commercial and government markets.

Financial Highlights (FY2025)

1. Revenue: ~$13.1 million, showing steady growth from previous years.
2. Cash and cash equivalents: Around $3.24 million, giving it room to fund near-term R&D and operations.
3. R&D investment: Continued focus on developing next-generation imaging products.

Though Micro-X remains in the early stages of commercial scaling, its revenue growth and diversification indicate progress toward sustainable operations.

Institutional and Strategic Interest

Unlike many penny stocks that rely on retail investors, Micro-X has attracted interest from institutional investors and strategic defence partners. Such involvement typically signals confidence in the company’s long-term vision and technology roadmap.

These investors recognize Micro-X’s potential to disrupt the multi-billion-dollar imaging industry, particularly with projects like its Miniaturised Baggage Scanner, which could redefine airport screening by replacing bulky machines with compact, mobile systems.

In addition, the company’s ongoing collaborations with U.S. defence contractors and global security agencies strengthen its credibility on the world stage.

Growth Catalysts

1. Nano Mobile X-ray System rollout: The company’s portable medical imaging product is gaining traction in international markets, particularly in field hospitals and defence applications.
2. Airport and border security partnerships: Continued progress in commercializing its miniaturized scanners.
3. Global defence collaboration: Expanding exposure to U.S. and European defence procurement opportunities.

Risks to Consider

Micro-X is still loss-making, with cash burn tied to its R&D and product rollout phases. Any delay in commercialization, or the need for additional funding, could slow momentum. However, institutional backing provides a vote of confidence that many early-stage tech firms lack.

Bottom Line on Micro-X

Micro-X offers exposure to a highly innovative niche — the intersection of MedTech and DefenceTech. While still speculative, its growing base of strategic and institutional investors adds a layer of credibility rarely seen among penny stocks. If the company continues to execute on its contracts and partnerships, Micro-X could evolve from a small-cap curiosity into a serious contender in global imaging markets.

Penny Stock 2: Bhagwan Marine Ltd (ASX: BWN)

Company Overview

While Micro-X operates in high-tech labs, Bhagwan Marine Ltd rules the seas. The Western Australia-based company provides marine services for the offshore energy, defence, environmental, and infrastructure industries.

Bhagwan operates one of the largest specialized vessel fleets in Australia, supporting projects that range from port logistics and subsea construction to marine transport and defence support.

What makes Bhagwan Marine particularly interesting is that, despite being classified as a penny stock, it’s profitable, with consistent revenue growth and solid operational performance — a rare feat for a company of its size.

Financial Highlights (FY2025)

1. Revenue: About $283 million, up from $268.85 million in FY2024 — reflecting healthy growth.
2. Net Profit After Tax: Approximately $12.5 million, showing sustainable profitability.

These numbers illustrate that Bhagwan is not your typical “penny stock” in distress. Instead, it’s an established player trading at a low valuation relative to its strong fundamentals.

Institutional and Insider Backing

Bhagwan Marine’s strength lies not only in its numbers but also in who’s backing it. Institutional investors and high-profile private shareholders have shown increasing confidence in the company’s trajectory.

This institutional presence provides a form of stability and external validation — suggesting that the market may be underpricing Bhagwan’s true potential.

Key Growth Drivers

1. Offshore wind and renewable energy projects: The global shift toward green energy is creating new marine infrastructure opportunities. Bhagwan is well-positioned to capture this demand.
2. Multi-year government and port contracts: These recurring revenue streams enhance visibility and reduce volatility.
3. Fleet modernization program: The company continues to invest in upgrading vessels, improving fuel efficiency, and cutting costs.

Risks to Watch

Bhagwan’s performance is still tied to project cycles and macro conditions in energy and construction. Fuel price volatility and potential delays in large contracts could affect short-term margins. However, strong contract visibility and profitability offer a cushion against these risks.

Bottom Line on Bhagwan Marine

Bhagwan Marine stands out as a steady and cash-generating small-cap. It’s a fundamentally sound business with proven execution capabilities, backed by institutional interest and management alignment. For investors seeking exposure to infrastructure and energy without taking on speculative risk, Bhagwan offers a compelling story.

Final Take

Micro-X Ltd offers innovation and global growth potential. It’s a high-risk, high-reward play in the MedTech and DefenceTech sectors, with institutional backing lending credibility to its ambitious roadmap.

Bhagwan Marine Ltd, on the other hand, provides stability — a profitable small-cap with clear revenue visibility and growing participation in the renewable energy marine sector.
Its growing fibre footprint, ownership of network assets, and exclusive wholesale deals give it control and scalability that smaller ISPs can’t match.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

In a market filled with big-name telcos fighting for attention, Aussie Broadband Ltd (ASX: ABB) has quietly turned into one of the most interesting stories on the ASX. What started as a small internet service provider competing on customer service and value has evolved into a serious player with growing profits, strong infrastructure, and rising investor confidence.

What’s got investors tuning in? The short answer — consistent growth, smart strategy, and shareholder focus. The longer answer unfolds in three key reasons why ABB is now firmly on the radar of institutional and retail investors alike.

1. Accelerating Growth Across Multiple Fronts

Customer Gains, Revenue Momentum, and Expanding Market Share

Aussie Broadband’s FY25 performance left little doubt that the company is scaling faster than many expected. For the year ended 30 June 2025, ABB posted some standout numbers:

• Group revenue: $1,187.1 million — up 18.7% year-on-year.
• Net profit after tax (NPAT): $32.8 million — an increase of 24.5% versus FY24.
• On-net broadband connections: Up by ~104,100, pushing ABB’s NBN market share to ~8.4%, an improvement of 1.1 percentage points.

These aren’t one-off figures — they show a company firing on multiple cylinders. Revenue is rising, customer numbers are growing, and profitability is strengthening. For investors, this combination signals more than just momentum — it reflects a sustainable growth story built on strong execution.

Diversification Beyond Just Households

While many still think of Aussie Broadband as a consumer ISP, the company’s reach has expanded far beyond residential internet. ABB now operates across enterprise, government, and wholesale segments, diversifying its income base and reducing reliance on household subscribers.

Some key data points underline this progress:

The Enterprise & Government division grew by about 11.1% in FY25, reflecting deeper penetration in the business connectivity segment.

Wholesale partner accounts climbed from 1,118 in FY24 to 1,301 in FY25, a clear sign that more service providers are relying on ABB’s network capabilities.

This broader customer mix gives ABB resilience and flexibility — qualities investors value during uncertain market cycles.

2. Strong Infrastructure and Smart Strategic Positioning

Owning the Network Advantage

In the telecommunications world, owning infrastructure is power — and Aussie Broadband understands that perfectly. Over the last few years, ABB has poured resources into expanding its “Aussie Fibre” network, while also strengthening its voice and data platforms.

Here’s what that looked like in FY25:

• On-net buildings connected: Up 78.1% to 896.
• Active connections: Up 95.6% to 1,103.
• Net borrowings: Reduced to $128.2 million, down $9.9 million year-on-year.

These figures show disciplined expansion — not just growth for growth’s sake. ABB’s investments are enhancing network control, scalability, and margin efficiency. This matters more than ever as demand for high-quality broadband rises across streaming, gaming, cloud computing, and IoT ecosystems.

By owning and managing more of its own infrastructure, ABB reduces reliance on the NBN wholesale network, improving its cost base and strengthening competitive positioning.

The Wholesale Channel Advantage

One of ABB’s most strategic moves came in FY25, when it signed a six-year exclusive wholesale services agreement with More Telecom and Tangerine. This deal will see around 290,000 connections hosted on ABB’s network — providing consistent, recurring wholesale revenue.

For investors, this is a big deal. Wholesale partnerships mean steady cash flows, better network utilization, and lower customer acquisition costs compared to chasing individual retail users. It also gives ABB the scale needed to negotiate better terms and continue expanding its infrastructure at a sustainable pace.

In an industry where scale and control are everything, ABB’s dual strategy — combining direct retail growth with expanding wholesale partnerships — positions it as a serious long-term contender.

3. Shareholder Returns and Financial Discipline

Rewarding Shareholders While Staying Prudent

Aussie Broadband isn’t just growing — it’s sharing the rewards with shareholders while maintaining financial discipline. In FY25, the company returned approximately $59.4 million to shareholders through on-market buybacks and fully franked dividends.

This commitment to returning capital signals two things: confidence in the company’s cash generation and a responsible approach to balance sheet management. ABB has managed to grow its network and market share without overleveraging, which is particularly impressive in the capital-intensive telco sector.

Looking Ahead

Management has also been transparent about its long-term roadmap through the “Look-to-28” strategy, which aims to drive:

1. Sustained revenue and margin growth,
2. Greater utilization of owned fibre networks, and
3. Continued expansion across enterprise, government, and wholesale segments.

Investors love visibility and ABB provides exactly that. The combination of a clear growth plan, strong financial controls, and direct capital returns creates a compelling investment story.

Final Thoughts: Why ABB Deserves a Closer Look Now

When you step back, three factors make Aussie Broadband stand out from its ASX peers right now:

Financial Discipline and Shareholder Focus:
The company’s ability to reward shareholders through dividends and buybacks, while keeping debt levels low, showcases strong management execution.

Visible and Balanced Growth:
ABB isn’t just adding customers — it’s expanding across multiple business segments while growing revenue and profits at double-digit rates.

Strategic Infrastructure Edge:
Its growing fibre footprint, ownership of network assets, and exclusive wholesale deals give it control and scalability that smaller ISPs can’t match.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

The global energy landscape is shifting faster than ever. From battery storage systems to solar and wind farms, the transition toward renewables is not just reshaping the grid—it’s transforming investment opportunities. For investors hunting for ASX-listed companies poised to benefit from this megatrend, Southern Cross Electrical Engineering Ltd (ASX: SXE) and Origin Energy Ltd (ASX: ORG) stand out.

Both companies operate at different ends of the energy spectrum—SXE is a nimble contractor driving Australia’s electrification build-out, while Origin is a large-scale energy player pivoting toward clean power and sustainability. Together, they represent two compelling angles on the renewable transition story—with massive upside potential if current trends continue.

1. Southern Cross Electrical Engineering Ltd (ASX: SXE)

Building the Wires, Systems, and Infrastructure Behind the Energy Revolution

When people think of renewable energy, they often picture solar panels and wind turbines. But behind the scenes, there’s another crucial component — the electrical and infrastructure backbone that makes everything work. This is where Southern Cross Electrical Engineering (SXE) comes in.

SXE is a diversified electrical, communications, and maintenance contractor servicing some of the biggest infrastructure, commercial, and industrial projects across Australia. Its core business is powering the electrification wave — from battery storage and renewable energy projects to data centres, airports, and hospitals.

Strong Financial Momentum

For the year ended 30 June 2025, SXE reported:

1. Revenue: $801.5 million — up a massive 45.2% year-on-year.
2. Net Profit After Tax (NPAT): $31.7 million — an impressive 44.5% increase.
3. Free Cash Flow: $59.8 million — nearly double the previous year’s ~$33.9 million.
4. Order Book: ~$685 million — slightly down from last year but still robust.

This growth reflects the company’s strong execution in major infrastructure and energy-related projects. Some of the standout contributions came from the Collie Battery Energy Storage System in Western Australia — a 500MW/2000MWh project that will play a key role in stabilizing renewable power on the grid.

SXE has also diversified its portfolio with the acquisition of Force Fire, a fire-safety business that adds stable, recurring maintenance revenue — helping balance its more cyclical project-based income.

Why Analysts See Massive Upside

The investment case for SXE is rooted in two powerful tailwinds: electrification and infrastructure expansion. As governments and corporations race to decarbonize, demand for high-quality electrical contractors continues to climb.

Here’s why analysts are optimistic:

1. SXE is directly aligned with national priorities like renewable integration, grid modernization, and digital infrastructure (including data centres).
2. The company’s balance sheet looks healthier than ever, with low debt and strong cash generation.
3. Ongoing diversification—both geographically and across services—positions it for steady, sustainable growth.

Simply put, SXE doesn’t need to bet on one big project to win. It’s plugged into multiple growth engines—energy, infrastructure, and technology—all expanding simultaneously.

Risks to Watch

Of course, it’s not all smooth sailing. SXE’s project-based model exposes it to execution risks such as cost overruns, workforce shortages, or project delays. The company’s order book has also slightly dipped, meaning management will need to maintain its strong tendering success rate.

Moreover, if infrastructure investment slows due to economic tightening or government budget constraints, SXE’s growth could moderate.

Still, given its recent financial performance and strategic positioning, SXE remains one of the more compelling small-to-mid cap renewable infrastructure plays on the ASX.

2. Origin Energy Ltd (ASX: ORG)

From Traditional Utility to Energy Transition Powerhouse

At the other end of the scale sits Origin Energy, one of Australia’s largest integrated energy companies. Historically, Origin made its money from retail electricity and gas. But over the last few years, it’s been reshaping its identity — moving aggressively into renewables, battery storage, hydrogen, and digital energy services.

In many ways, Origin embodies the energy transition itself: leveraging legacy cash flow to fund the future.

Financial Highlights

For the financial year ended 30 June 2025, Origin reported:

1. Statutory Profit: $1,481 million, up from $1,397 million a year ago.
2. Underlying Profit: $1,490 million, an increase of about $307 million year-on-year.
3. Underlying EBITDA: $3,411 million for FY25.
4. Final Dividend: $0.30 per share (fully franked), bringing the full-year dividend to $0.60, up from $0.55 in FY24.

For FY26, Origin’s management expects Energy Markets underlying EBITDA in the range of $1.4–$1.7 billion, underscoring a stable earnings outlook despite a shifting energy mix.

Why the Upside Story Holds Weight

Origin’s upside potential lies in its ability to balance the old and new worlds of energy. Here’s what analysts like about the stock:

1. Cash Flow Strength: Origin’s legacy operations continue to throw off strong cash, funding its renewables expansion and supporting healthy dividends (yielding roughly 4.7%).
2. Scale and Flexibility: As one of Australia’s largest energy players, Origin can allocate capital strategically — whether expanding renewables, investing in batteries, or partnering in hydrogen projects.
3. LNG Exposure: Its stake in the APLNG joint venture provides stable cash returns and optionality to monetise assets if needed.
4. Positive Market Re-rating: Analysts increasingly view Origin as a transition leader, not just a legacy utility — a shift that could unlock valuation upside as the market recognizes its progress.

Risks and Challenges

Transitioning a company of Origin’s size is no small feat. Regulatory risks, fluctuating commodity prices, and capital-intensive project pipelines can all weigh on returns. For instance, production at APLNG is expected to moderate slightly to 635–680 PJ in FY26, pushing Origin to boost capital expenditure to maintain output and growth.

Additionally, while profit rose, competition in the retail electricity space and evolving regulatory frameworks remain ongoing challenges.

Nevertheless, with strong financials, disciplined capital management, and growing renewables exposure, Origin remains a cornerstone of Australia’s energy transition story.

The Bottom Line — Two Different Paths, One Bright Future

Both Southern Cross Electrical Engineering (SXE) and Origin Energy (ORG) are navigating the energy revolution in their own ways — one as a fast-moving contractor powering infrastructure, the other as a heavyweight transforming into a green energy leader.

Here’s the quick take:

1. SXE offers growth exposure to Australia’s booming electrification and infrastructure sectors — a smaller company flying somewhat under the radar, with strong earnings momentum.
2. ORG provides a balanced mix of income and transformation, combining steady dividends with long-term clean energy growth potential.

For investors seeking to capitalize on Australia’s energy transition, these two stocks represent distinct yet complementary plays: SXE for high-growth electrification exposure, and ORG for large-scale stability and transition upside.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.

When it comes to picking stocks on the ASX, few comparisons are as interesting — or as different — as CSL Ltd (ASX: CSL) and Telstra Group Ltd (ASX: TLS).

Both are Australian giants in their own right, both generate billions in revenue, and both have strong shareholder followings. Yet, they represent completely different investment philosophies.

CSL is a global biotech powerhouse — a story of innovation, research, and long-term growth. Telstra, on the other hand, is a dependable dividend machine — steady, predictable, and deeply rooted in Australia’s communications network.

So, which one is the better buy in 2025? Let’s dig deeper into both.

CSL Ltd — The Growth Powerhouse

A Global Biotech Leader

CSL Ltd is one of Australia’s most successful global companies. Headquartered in Melbourne, CSL operates across more than 100 countries, specialising in plasma-derived therapies, vaccines, and biotechnology research. Through its core divisions — CSL Behring and Seqirus — the company has built a strong moat around innovation and medical expertise.

In FY2025, CSL reported revenue of approximately $23.8 billion, reflecting a strong rebound in plasma collection volumes and a solid performance from its vaccine arm. Underlying profit grew in double digits year-on-year, reinforcing the company’s ability to deliver even in a complex regulatory and pricing environment.

Management guided for mid-single-digit revenue growth for FY2026, with a focus on expanding product pipelines and optimising costs.

Innovation-Driven Momentum

CSL’s success has always been tied to research and development (R&D). The company spends around 10–12% of revenue annually on R&D — a significant commitment for a large-cap stock. This pipeline fuels long-term growth, with new products targeting rare diseases, immunology, and respiratory therapies.

Additionally, CSL’s Seqirus division remains one of the world’s largest influenza vaccine producers, benefitting from steady demand and recurring revenue streams.

Strategic Restructuring and Efficiency

Recently, CSL has embarked on a restructuring initiative aimed at improving agility and profitability — particularly within its Seqirus and CSL Vifor divisions. While these changes incur short-term costs, they are expected to streamline operations and support stronger margins in coming years.

The company also continues to invest in expanding plasma collection centres globally, a move that supports both supply stability and future scalability.

Risks to Consider

No growth story is without challenges. CSL faces:

1. Regulatory risk, especially with global drug approvals and pricing pressure in the US and Europe.
2. Execution risk in managing multiple restructures and clinical trial outcomes.
3. Currency risk, given that a large portion of revenue comes from international markets.

Still, for investors seeking high-quality growth exposure, CSL remains a standout choice — offering both global scale and homegrown innovation.

Telstra Group Ltd — The Reliable Dividend Giant

Australia’s Telecommunications Backbone

If CSL represents the future of biotech, Telstra Group Ltd represents the backbone of Australia’s digital economy. As the country’s largest telecommunications provider, Telstra offers mobile, broadband, enterprise, and network services to millions of customers nationwide.

In FY2025, Telstra reported a net profit of approximately $2.17 billion, reflecting resilience despite rising costs and competitive pressures. The company also completed a $750 million share buyback and declared a dividend of 19 cents per share — consistent with its commitment to shareholder returns.

Telstra’s mobile segment continues to drive performance, supported by network upgrades, 5G expansion, and a strong subscriber base.

Transformation Paying Off

Over the past few years, Telstra has undergone a major transformation under its “T25 strategy” — focusing on simplifying operations, digitising customer service, and cutting costs.

These initiatives have already produced measurable results. The company’s cost-saving program is delivering hundreds of millions in annual efficiencies, allowing Telstra to reinvest in new technologies while maintaining profitability.

The growth of Telstra InfraCo — the company’s infrastructure arm — is also unlocking value. InfraCo owns and manages assets such as data centres, fibre networks, and mobile towers, providing new income streams and potential for future spin-offs or partnerships.

Dividend and Capital Strength

For income-focused investors, Telstra’s biggest attraction remains its consistent dividends and strong cash generation. With its payout ratio backed by stable earnings, Telstra offers an appealing dividend yield of around 4.5%–5%, depending on share price movements.

The company’s balance sheet remains healthy, supported by recurring revenue and disciplined capital allocation.

Risks to Consider

While Telstra’s defensive nature makes it appealing, investors should be aware of:

• Intense competition from Optus and TPG Telecom, which can pressure margins.
• Slower growth in enterprise and NBN-related revenue.
• Ongoing capital expenditure requirements for 5G and infrastructure upgrades.

Even so, Telstra’s reliability and cash-flow visibility continue to make it a core holding for conservative portfolios.

CSL vs Telstra — Which Stock Suits You Better?

There’s no single right answer — it depends entirely on your investment goals and risk appetite.

CSL if:

1. You’re a long-term investor seeking growth and innovation.
2. You can tolerate short-term volatility in exchange for higher potential returns.
3. You believe in the biotech megatrend and want exposure to global healthcare markets.

Telstra if:

1. You prefer stable dividends and lower-risk exposure.
2. You’re seeking defensive positioning amid economic uncertainty.
3. You want consistent income from a well-established Australian brand.

Or Combine Both

Balanced investors could hold both CSL and Telstra — gaining exposure to two very different sectors. CSL adds a layer of growth and international diversification, while Telstra anchors the portfolio with reliable income and domestic stability.ntial growth. As both move closer to commercialization, their success stories may not only transform their industries but also redefine the future of Australian biotech on the world stage.

Disclaimer:

General Financial Product Advice and Regulatory Framework: Pristine Gaze Pty Ltd (ABN 66 680 815 678, ACN 680 815 678) operates as Corporate Authorised Representative (CAR No. 001312049) of Alpha Securities Pty Ltd (AFSL 330757), which is licensed and regulated by the Australian Securities and Investments Commission under the Corporations Act 2001 (Cth). This report contains general financial product advice only and has been prepared without consideration of your personal objectives, financial situation, specific needs, circumstances, or investment experience. The information is not tailored to individual circumstances and may not be suitable for your particular situation. Before acting on any information contained herein, you should carefully consider its appropriateness having regard to your personal objectives, financial situation, and needs, and consider seeking personal financial advice from a qualified financial adviser who can assess your individual circumstances and provide tailored recommendations.

Investment Risks and Market Warnings: All investments carry significant risk, and different investment strategies may carry varying levels of risk exposure including total loss of invested capital. The value of investments and income derived from them can fluctuate significantly due to market conditions, economic factors, company-specific events, regulatory changes, commodity price volatility, currency fluctuations, interest rate movements, and other factors beyond our control. Securities markets are subject to market risk from general economic conditions and investor sentiment, liquidity risk affecting the ability to buy or sell securities at desired prices, credit risk from issuer default or deterioration, operational risk from inadequate internal processes, sector-specific risks including industry regulatory changes, technology obsolescence, management changes, competitive pressures, supply chain disruptions, and mining-specific risks including resource estimation uncertainty, operational hazards, environmental compliance, permitting delays, commodity price cycles, geopolitical factors affecting mining operations, and exploration risks. Small-cap and speculative mining stocks carry additional risks including limited liquidity, higher volatility, dependence on key personnel, limited operating history, uncertain cash flows, and potential failure to achieve commercial production.

Information Accuracy and Limitations: While we endeavour to ensure information accuracy and reliability, we make no representations or warranties (express or implied) regarding the accuracy, reliability, completeness, timeliness, or suitability of information provided, except where liability cannot be excluded under applicable law. This report may include information from third-party sources including company announcements, regulatory filings, research reports, market data providers, financial news services, and publicly available information, which we do not independently verify and for which we assume no responsibility. Past performance, examples, historical data, or projections are not indicative of future results, and no guarantee of future returns is provided or implied. To the maximum extent permitted by law, Pristine Gaze Pty Ltd and Alpha Securities Pty Ltd, together with their respective directors, officers, employees, representatives, and related entities, exclude all liability for any errors, omissions, inaccuracies, loss or damage (including direct, indirect, consequential, or special damages) arising from reliance on information provided, investment decisions made based on this report, market losses, opportunity costs, and technical issues or system failures.