Australia may not be the first market U.S. investors think of when looking abroad, but companies trading on the Australian Securities Exchange (ASX) deserve a closer look in 2026.
Australian equities have not looked this attractive since the April 2025 tariff sell-off, according to Morningstar’s second-quarter Australian Equity Market Outlook report. On an equal-weighted basis, Morningstar’s Australian and New Zealand coverage traded at an 11% discount to fair value as of March 31, with 55% of covered stocks considered undervalued. That doesn’t mean you should rush in blindly, but it does suggest Australian stocks may offer opportunities if you know where to look.
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“The outlook for Australian equities looks relatively positive, with our economy relatively insulated from global events” and large domestic companies that face limited foreign competition, says Hugh Dive, chief investment officer at Atlas Funds Management in Sydney, Australia.
Thanks to its distance from Europe and North America and barriers to entry, ASX companies face minimal international competition, he says. Foreign banks, for instance, have repeatedly struggled to break into the Australian market, with Citigroup Inc. (ticker: C) an example of a failed attempt. It exited its 36-year-long Australian consumer banking business in 2021.
The Australian market also offers something U.S. investors may not get much of at home.
“The Australian Securities Exchange is home to some of the world’s largest mining companies,” says Lochlan Halloway, a market strategist for Morningstar Australia. “Australian banks, too, are high-quality businesses.”
The catch is concentration. Financials and basic materials together make up roughly 60% of the benchmark ASX 200, Halloway says. That means a passive Australian stock fund is not necessarily a broad bet on the entire Australian economy. It’s essentially a bet on two forces: “Australian residential property through the banks, and Chinese industrial demand through the miners,” he says.
This is not necessarily a reason to avoid Australian stocks, but it is a reason to know what you own. Australia is closely tied to China through exports of iron ore, coal, natural gas and agricultural products, Dive says. Around 20% of the Australian market is resources, he says, and a drop in Chinese demand “will send chills through this sector.”
[Read: 7 Best International Dividend Stocks for Diversification]
For that reason, investors may want to look beyond the biggest miners and banks. Dive sees the most attractive opportunities in energy, insurance and certain mining sectors, including gold and copper. From a valuation perspective, he says health care, industrials, toll roads and consumer discretionary stocks look cheap, while technology, banks and iron ore look expensive.
In the current environment, Dive favors companies with minimal debt, since borrowing costs become more painful as interest rates rise. He also looks for businesses with pricing power, meaning they sell products or services that customers are willing to keep paying for even as prices rise.
For U.S. investors, the best Australian stocks may be those that offer exposure they cannot easily replicate at home, without taking on more commodity, currency or concentration risk than they realize. For stocks that aren’t traded on U.S. exchanges, you can invest on the ASX through brokers that offer global trading access, such as Interactive Brokers or Fidelity. You can also invest via American depositary receipts on the New York Stock Exchange or the Nasdaq.
Be aware: The Australian dollar is often viewed as a risk-sensitive currency. If you are worried about a global slowdown, a weakening Australian dollar could cut into your stock gains even if the company itself performs well. With that in mind, here are seven of the top ASX stocks to consider for your portfolio (market capitalization in Australian dollars and U.S. dollars):
| Australian Stock | Market Cap | Why It Stands Out |
| Woodside Energy Group Ltd. (WDS) | AU$57.1 billion ($41.2 billion) | Energy exposure, dividend income |
| CSL Ltd. (CSL.AX, OTC: CSLLY) | AU$58.2 billion ($42 billion) | Contrarian health care turnaround |
| ASX Ltd. (ASX.AX, OTC: ASXFY) | AU$11.4 billion ($8.2 billion) | Capital markets infrastructure |
| Amcor PLC (AMCR) | AU$25.4 billion ($18.3 billion) | Defensive global packaging |
| James Hardie Industries PLC (JHX) | AU$16.6 billion ($12 billion) | U.S. housing-repair demand |
| Endeavour Group Ltd. (EDV.AX) | AU$5.8 billion ($4.2 billion) | Defensive consumer income |
| WiseTech Global Ltd. (WTC.AX, OTC: WIGBY) | AU$14.2 billion ($10.3 billion) | Logistics software growth |
Woodside Energy Group Ltd. (WDS)
Given the strength of Australian commodities, it makes sense to start this list with one of the most straightforward commodities angles on the ASX: Woodside Energy Group. The company is Australia’s largest independent oil and gas producer
and gives investors exposure to liquefied natural gas, or LNG.
The attraction is partly income and partly valuation. The stock is trading at about a 30% discount to its Morningstar fair value estimate of AU$43.80 ($31.60). This is paired with a forward dividend yield of over 5%, although payouts come only twice per year.
The risk is that Woodside is still a commodity stock. Oil and LNG prices, climate policy and investor sentiment toward fossil fuels can all affect share price. Unlike LNG giant QatarEnergy and other companies, Woodside’s physical operations are mostly immune to the blockade at the Strait of Hormuz during the U.S.-Iran conflict. However, it is still exposed to volatility in oil and gas prices as a result of the Iran war. Investors should note that while Woodside benefits from the “war premium” in energy prices, the stock remains vulnerable to a sharp pullback should a peace deal occur.
CSL Ltd. (CSL.AX, OTC: CSLLY)
CSL gives U.S. investors exposure to one of Australia’s rare global health care leaders. The biotech company has three main segments: plasma-driven therapies, influenza vaccines, and iron deficiency and nephrology.
The stock has also been under pressure, which is exactly why it may belong on a contrarian list. Dive uses a “Dogs of the Dow”-style approach to uncover opportunities in companies that looked unattractive at the start of the year but may be poised for a turnaround. The biotech company Telix Pharmaceuticals Ltd. (TLX) has already had a big turnaround, he says, and “we expect something similar from immunotherapy company CSL.”
Morningstar also sees opportunity in health care. Analysts expect “strong sales growth and stable margins” from the company and see it as trading at a discount of 43% from its fair value of AU$210 ($151.53).
ASX Ltd. (ASX.AX, OTC: ASXFY)
ASX Ltd. offers yet another way to invest in Australia: Instead of buying a bank, miner or consumer stock listed on the Australian Securities Exchange, investors can buy the company that helps run the market itself.
ASX Ltd. operates core market infrastructure for Australia’s financial system, including exchange operations, listings, trading, clearing and settlement. In simple terms, ASX is effectively the toll road for much of Australia’s capital markets activity.
Morningstar calls ASX a “natural monopoly” that provides essential infrastructure to Australia’s capital markets, supported by intangible assets. The stock is also trading at about a 14% discount to its fair market value of AU$70 ($50.51).
One underappreciated angle is the energy transition, which could drive new listings and trading activity as demand for energy-transition materials grows, according to Roy Van Keulen, an equity analyst for Morningstar Australasia, who covers the stock.
As with any stock, there are risks in investing in ASX. As a stock exchange operator, the company faces a tougher regulatory backdrop as well as scrutiny over its market infrastructure and modernization efforts. Still, for long-term investors, ASX offers a unique way to get exposure to Australia’s financial sector.
Amcor PLC (AMCR)
Amcor may not be a household name, but many of the products it helps package probably are. The company makes packaging for a range of staples, such as food, beverages and personal care products. This gives Amcor a more stable footing. Even when the economy slows, people still buy groceries, medicine and everyday household products.
Investors are underappreciating the defensive nature of AMCR’s food and beverage exposure, according to Esther Holloway, an equity analyst for Morningstar Australasia. While she forecasts “critically soft volume” in the near term, she is “positive” about its longer-term prospects. Amcor also gained scale through its 2019 acquisition of Bemis and 2025 merger with Berry Global.
The stock is trading at around a 34% discount to its fair market value of AU$83 ($59.89). It also carries an impressive 6.5% forward yield with quarterly dividend payments that may appeal to income investors. Just be conscious of the risks of low packaging volumes, customer pressure on prices and environmental concerns around plastic packaging.
James Hardie Industries PLC (JHX)
James Hardie is an Australian-listed company with a very American growth story. The company is best known for fiber cement, PVC decking and railings, and other exterior building products, and its biggest opportunity is tied to U.S. homes. Older houses need repairs, and builders need durable materials. This gives the company a “tremendous growth runway,” according to Holloway.
“Aging U.S. houses provide a pipeline of repair-and-renovation customers, while a strategy to win contracts with large homebuilders is increasing volumes in new builds,” she adds.
The stock is currently trading at more than a 30% discount from its Morningstar fair market value of AU$42 ($30.31). Holloway believes this “downtrodden price” is due to investor concerns about the company’s acquisition of Azek Co. Yet Holloway is more optimistic, citing a potential sales opportunity and cost savings from the merger.
So, if you want an ASX-listed stock closely tied to U.S. housing demand, James Hardie stands out.
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Endeavour Group Ltd. (EDV.AX)
Endeavour Group is a consumer stock with a simple business: It quenches Aussies’ thirst with its chain of liquor stores and hotel pubs. The company operates Australia’s largest retail drinks network under the Dan Murphy’s and BWS brands, along with the country’s largest portfolio of licensed hotels.
That makes Endeavour a very different kind of Australian stock than a miner or bank. It’s tied more to consumer spending and everyday social occasions than to iron ore prices or Chinese industrial demand. The market is underappreciating just how defensible Endeavour is due to recent weaknesses in sales, according to Johannes Faul, a director for Morningstar Australasia. The company has been lowering prices because of lower at-home liquor consumption, which is hurting profits, but Faul expects shelf prices to inflate again in August 2026.
The stock is trading at around a 40% discount to its Morningstar fair market value of AU$5.40 ($3.90). It also has over a 5.3% forward yield, supported by biannual dividend payouts.
WiseTech Global Ltd. (WTC.AX, OTC: WIGBY)
WiseTech Global is a beaten-down growth stock that gives investors exposure to Australian-listed technology. The company builds logistics software, including its flagship platform, CargoWise, a cloud-based software that helps customers manage complex logistics transactions.
WiseTech is possibly the highest-risk pick on this list, especially since Dive says Australian technology stocks often trade at a scarcity premium and can look expensive relative to global tech companies.
Morningstar sees the case differently: Van Keulen says corporate governance issues “have cast a cloud over WiseTech and its future business prospects,” but he believes this has caused the stock to be “overly discounted.” It’s currently trading at around a 68% discount to its Morningstar fair value of AU$138 ($99.58). So, this dark cloud could be an incredible buying opportunity for investors who are willing to wait for the sunshine.
“The business is well established with a deep bench of talented people, has no competitors of note, and is still early in its market opportunity,” according to Van Keulen. He expects WiseTech will continue to dominate logistics software for the freight forwarders industry.
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Australian Stocks: 7 of the Best ASX Companies to Invest In Now originally appeared on usnews.com
