Here are Our 11 Top ASX Stocks to Buy in FY26: 1 From Each Sector!

It is a New Financial Year, so it’s time to outline 11 Top ASX Stocks to Buy in FY26. Why 11 you might ask? Because 11 is the number of ‘GICS‘ (Global Industry Classification Sectors) on the ASX, and we’re picking one from each sector.

 

Our 11 Top ASX Stocks to Buy in FY26!

 

Energy: Ampol (ASX:ALD)

We’d like to start off by saying energy wouldn’t be our first choice as a sector to invest in. Most companies are coal, uranium or oil stocks – all of which face an uncertain pricing environment. If we had to pick one of these, we’d go with uranium because it is the only one of those 3 not facing an existential crisis.

That said, we have to pick an energy company and we’re going with one of the most peculiar: Ampol. You probably know Ampol for its petrol stations. But what makes this company exciting is what many may not know about it. The company bought the Z Energy chain in New Zealand, is building a network of EV charging bay networks and is enhancing the Lytton refinery so that it becomes more reliable. In CY24, the company mde a $235m profit and paid $572m in dividends to its investors.

 

Materials: BlueScope Steel (ASX:BSL)

The materials sector mostly consists of miners and aspirant miners (i.e. project developers or explorers). If you look at the list of all ASX materials stocks, virtually all of the winners on FY25 were in gold (with the only few exceptions being those who had self-inflicted wounds like Bellevue) and all of the losers were in battery metals like lithium (except those with exposure to gold). But as we did with energy, we’re picking a stock that is different from the rest.

BlueScope Steel is a steel maker with operations in Australia and the US. It makes half its profits from the former and the other half from the latter – it has a steel mill in Ohio that makes 3 million tonnes of steel a year. With Trump’s tariffs, American manufacturers needing steel will need ‘home grown’ steel and BlueScope is an ideal candidate.

 

Industrials: Qantas (ASX:QAN)

Nearly 2 years into Vanessa Hudson’s tenure, the worst of the damage from the back end of the Alan Joyce area appears to be gone. The company doesn’t appear to have been hit too badly by the cybersecurity attack.

Our thesis is that the company’s fleet renewal will begin to bear fruit in FY26 – it will be able to fly with lower costs while making more money from passengers. And how many other companies can boast of a loyalty program with almost every adult Australian enrolled in it like Qantas can?

 

Consumer Discretionary: Temple and Webster (ASX:TPW)

Temple and Webster is an online furniture and homewares outlet. Our thesis is that its aspirations will become reality. Namely, to become the largest furniture and homewares retailer in Australia and for $1bn+ in annual sales over the next 3-5 years.

When the company listed, which happened in 2015, it had a market capitalisation of $117m, forecasted revenue of $60m for the following 12 months and 190,000 active customers. Today it has a market capitalisation of $2bn, over $600m in annualised revenue and over 1.2m active customers!

We think there is room for further growth because furniture is still an underpenetrated ecommerce segment – under 20% here. We think TPW can win over Millennial and Gen Z customers as they enter their peak spending years as they advance in their careers and become beneficiaries of the Great Wealth Transfer. They are highly comfortable with online shopping, having grown up during the digital age and move more frequently meaning they’ll need furniture. Moreover, they they are drawn to brands that offer sustainable, stylish, and cost-effective solutions, aligning with their preferences for environmental consciousness and financial savvy, plus they value personalisation and unique experiences that Temple and Webster can offer.

 

Consumer Staples: Inghams (ASX:ING)

It would have been easy to just go with either Coles or Woolworths. But we thought we’d go with Inghams.

There is a lot to like about this company. It possesses many positive traits, including a market-leading position, a long history and being in a recession-proof industry. Its results since listing haven’t always been the best, but it is on track to meet its FY25 guidance, trades at reasonable multiples and is expected to grow in the years ahead.

 

Health Care: EBR Systems (ASX:EBR)

EBR Systems (ASX:EBR) is a company about to commercialise a heart-health technology. EBR’s WiSE system (Wireless Stimulation Endocardially) uses wireless technology to deliver pacing stimulation directly to the inside of the left ventricle of the heart, thus preventing heart failure by detecting irregularity and thus enabling earlier intervention.

WiSE is the size of a coked grain of rice – 5% the size of a conventional pacemaker – because it has no battery in the heart. There are no comparable competitors as it is the only leadless device to deliver CRT (i.e. it does not use leads or wires). In the Phase 3 trial, completed in early 2023, there was a significant improvement in heart function compared to the benchmark, as well as safety.

EBR’s WiSE has been FDA approved and is set to enter the US market in FY26. Its initial market is US$3.6bn – adult patients >21 years old who are indicated for cardiac resynchronisation therapy (CRT), have an existing implanted right ventricular pacing system and either have had previous unsuccessful implantations or who have had pacemakers where a standard upgrade is not advised due to the risks. But the worldwide Cardiac Rhythm Management Market is worth US$13.6bn, which can be unlocked in future years.

 

Financials: Australian Ethical (ASX:AEF)

We think FY26 will be a great year for the financials sector. Falling interest rates is a good thing for money managers. We’re going with Australian Ethical Investment because it is different – the clue is in its name.

ESG investing has become more and more popular as investors have become increasingly aware of ESG issues – such as climate change, carbon emissions and company governance – and such factors can positively or negatively affect investments. AEF has $10.3bn in FUM and over 130,000 customers, a figure that is expected to grow in the coming years as Millennials and Gen Z benefit from the Great Wealth Transfer and enter their peak spending years.

 

Information Technology: Life360 (ASX:360)

There’s many tech stocks we could’ve picked. Falling interest rates will be good for many companies. We’ve chosen Life360 for a number of reasons, one of which is that it is dual-listed on the NASDAQ and could outgrow other tech stocks only ASX listed by mere virtue of that fact.

Life360 operates an app that allows parents and children to stay connected. The app’s original premise was for parents to see the location where their children are, an idea that remains its primary capability. The company’s 2021 acquisition of fellow Silicon Valley tech company Tile diversified the company into tracking things in addition to people. Tile sells small hardware devices that can be attached to items such as wallets and keys

In CY24, it made US$371.5m in revenue, including $277.8m of subscription revenue, had 79.6m Monthly Active Users (over 20m of which were outside the US) and it has 2.3m Paying Circles Members. Its Annualised Monthly Revenue was $367.6m and Average Revenue per Paying Circle was US$131.76.

 

Communication Services: Aussie Broadband (ASX:ABB)

A likeable telco – could such a thing exist? Yes. Aussie Broadband is one of several NBN providers in Australia and prides itself in its high internet speeds and customer service experience. It has substantially grown since its 2020 IPO.

Aussie Broadband is able to make money through automation systems that lower the cost, but also provide a smooth customer experience, enabling sign-ups that can be done without any on-site work. The company’s app, used by nearly 80% of its customers, allows certain issues to be self-resolved and customers to monitor their usage.

As for customer service, ABB is highly rated by customers for its sign-up experience, its products, internet speed and for having a local call centre with low wait times. It is the 34th most trusted brand in Australia, ranking 1st among telcos. 

In FY24, Aussie made almost $1bn in revenue, up 27%, a $360.6m gross profit and a $26.4m net profit. It paid its first dividend, 4 cents per share. Its revenue is up 5 fold since listing and its gross margin has grown every year. For FY25, it has guided to $133-138m EBITDA (10-14% growth from FY24’s figure excluding non-recurring items).

Over the next 3 years, it aspires to reach >$1.6bn revenue, a >12.5% EBITDA margin, >20% CAGR profit growth and a >11% NBN market share.

 

Utilities: Meridian (ASX:MEZ)

The utilities sector is mostly companies like AGL and Origin – owners of energy and water assets and sellers of energy and water to consumers. Meridian (ASX:MEZ) is one of a kind amongst these companies. Not just because it is a New Zealand company, but has a strong portfolio of renewable energy assets that are actually making money. New Zealand will need NZ$30bn in new renewable generation over the next quarter century, and this company is the country’s largest generator and retailer of electricity.

 

Real Estate: Lendlease (ASX:LLC)

Another sector falling interest rates will be good for. Lendlease has been a ‘value trap’ for a number of years…but it’s different this year. Because interest rates are falling and the company has taken steps to move on from its torrid past including walking away from its global ambitions – exiting over $4bn worth of unprofitable investments. It now has a key focus on building apartments for wealthy Baby Boomers downsizing and has better risk assessment and due diligence procedures on its projects. Given its horrible share price development in the last 5 years, you should wait to get in to this one until after it publishes its FY25 results in August….just to be on the safe side.

 

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