As May 2026 begins, Australian investors scanning for the best ASX 200 shares have three names worth serious attention. BHP Group Ltd (ASX: BHP), Qantas Airways Ltd (ASX: QAN), and Codan Ltd (ASX: CDA) each present a different investment angle, and together, they form a diversified starting point for a A$5,000 allocation.
Figure 1: ASX 200 market performance reflecting investor focus on key large-cap opportunities in May 2026 [Courtesy: Business News]
The case for each sits on distinct foundations. The BHP investment strategy 2026 is built on iron ore cash flow and a copper growth story. Qantas is navigating short-term fuel headwinds while upgrading its fleet and growing its loyalty division. Codan just surprised the market with a 60%-plus earnings upgrade, with both its core segments firing simultaneously.
1. BHP Investment Strategy 2026: Income Today, Copper Growth Tomorrow
BHP Group Ltd is among the most established Companies on the ASX. It remains one of the most referenced names when investors discuss ASX stocks to buy in May, and the reasons remain structurally compelling.
Iron ore continues to generate the majority of the Company’s earnings, while copper is rapidly becoming the more exciting long-term story.
Figure 2: BHP headquarters highlighting its position as a leading ASX mining and commodities giant [Courtesy: Mining Technology]
Iron Ore as the Earnings Anchor
BHP’s Western Australia Iron Ore operations are among the most capital-efficient iron ore production systems globally. The nine months to March 2026 saw these facilities achieve record output, with iron ore production reaching 197 million metric tons, up 2% year on year.
That scale and efficiency give BHP a reliable earnings base that supports dividend distributions even through softer commodity cycles.
BHP’s blended exposure across iron ore, copper, and potash reduces the amplitude of earnings volatility across the cycle, unlike single-commodity miners who must ride price swings with no offsetting positions.
Copper as the Growth Engine
BHP’s economic and commodity outlook argues that copper demand should outpace supply, with prices entering a phase of durable outperformance by decade’s end, driven by urbanisation, renewables, electric vehicles, and digital infrastructure.
The Jansen Potash Project adds a further long-term growth layer beyond copper, giving the BHP investment strategy 2026 genuine multi-decade optionality.
Firm metal prices, particularly copper, remain a key tailwind, and continued strength in global infrastructure demand provides further support. Iron ore prices have also shown resilience, with improved long-term forecasts from agencies such as Fitch Ratings helping underpin sentiment.
2. Qantas Airways: A Pullback With Demand Still Intact
Qantas Airways Ltd sits among the best ASX 200 shares being discussed in May 2026 for a specific reason: its share price has pulled back against a backdrop where underlying demand remains resilient.
That combination, lower entry price, intact fundamentals, tends to attract attention from long-term investors.
Figure 3: Qantas Freight aircraft showcasing the airline’s cargo and international operations amid ongoing demand recovery [Courtesy: Wikimedia Commons]
What Is Behind the Recent Pressure
Higher jet fuel costs are the primary driver of recent share price softness, not a collapse in passenger demand. Qantas has flagged that its near-term jet fuel bill would be up to 32% more than previously anticipated, linked to the escalating conflict in the Middle East affecting global aviation.
The Company has responded by cutting domestic capacity slightly and adjusting fares to partially absorb the cost pressure.
In April 2026, Qantas upgraded its second-half 2026 operating guidance, now expecting Group International unit revenue growth of 4% to 6% and Group Domestic growth of approximately 5%, assuming current demand holds.
Conflict-driven capacity shifts by Gulf rivals are supporting stronger revenue per seat than Qantas had previously anticipated.
Fleet Renewal and the Loyalty Division as Growth Drivers
Qantas has recommenced overhauling its domestic fleet and plans to welcome its first A350 by the end of 2026, to eventually fly non-stop from Australia’s east coast to London and New York. Fleet renewal, including Airbus A321XLR and A220 aircraft, is expected to improve fuel efficiency and operating performance.
Fleet renewal and Project Sunrise are identified as key strategies to drive profitability and future revenue growth in long-haul markets. Qantas Airways is forecast to grow earnings and revenue by 9.6% and 4.7% per annum, respectively, over the coming years.
The Loyalty division adds a further earnings stream that operates largely independently of fuel price volatility, reinforcing the argument that Qantas is not a one-dimensional airline investment.
3. Codan: The ASX 200 Technology Name With Two Engines Running
Codan Ltd is the most differentiated of the three ASX stocks to buy in May. It operates across metal detection through its Minelab segment and defence communications, giving it exposure to two separate growth drivers.
Figure 4: Codan facility representing its growth across defence communications and metal detection segments [Courtesy: RooftoFloor]
A 60% Earnings Upgrade That Changes the Conversation
Codan expects FY26 EBIT and NPAT to surge by more than 60%, powered by strong results in both communications and Minelab, with the business experiencing significant demand across both core segments.
This is not a story of one division carrying another; both are performing simultaneously, which strengthens the quality of the earnings signal.
Communications and Minelab Both Beating Expectations
In Communications, defence demand for unmanned systems and software-defined radios continues to accelerate, supported by geopolitical tailwinds that show no signs of reversal.
Codan’s communications segment is now expected to hit its 30% profit margin target in FY26, a full year ahead of the FY27 guidance previously given to investors.
In Minelab, a favourable gold price environment combined with new product releases is pushing second-half revenue ahead of an already strong first half. When both divisions are beating expectations simultaneously, it tells a story about execution quality rather than luck.
Codan’s H1 FY26 result showed sales rising to A$393.51 million and net income to A$71.17 million. The Company’s narrative projects A$1.1 billion in revenue and A$213.3 million in earnings by 2029, requiring approximately 11.9% yearly revenue growth.
Industry Outlook
The global resources sector continues to benefit from structural demand for copper and iron ore, particularly as electrification and energy transition infrastructure spending accelerates across North America and Asia.
The international travel market remains on a steady recovery path, with demand resilience proving durable across both domestic and long-haul routes despite cost pressures facing airlines.
The defence technology sector is attracting sustained procurement spending across allied nations, with software-defined radio and unmanned systems forming a core part of military modernisation programmes globally.
Future Direction and Impact on ASX 200 Investors
For investors tracking the best ASX 200 shares this month, the three names above represent meaningfully different risk and return profiles within a single A$5,000 allocation.
BHP offers income through dividends from iron ore cash flow, with a long-duration copper growth story building behind it. The BHP investment strategy 2026 is not a short-term trade, it is a core holding built on commodity diversification and capital efficiency that can anchor a portfolio.
Qantas presents a recovery opportunity. The fuel cost headwind is real, but the underlying travel demand and revenue-per-seat improvements suggest the business is not structurally impaired. Fleet renewal and loyalty division growth add longer-term earnings potential that the current share price may not fully reflect.
Codan is the highest-conviction growth name of the three. When both Communications and Minelab are beating expectations simultaneously, it reduces overall earnings risk and supports confidence in FY27 earnings continuity.
The key question for investors is how much of the 60% earnings upgrade is already embedded in the share price following the recent re-rating.
Together, these three ASX stocks to buy in May offer a blend of income, recovery, and specialised technology growth, each approaching the market from a different angle.
ALSO READ: ASX 200 Rebound Today Snaps 11-Day Slide as Critical Minerals Lead the Charge
Frequently Asked Questions
Q1. Why are BHP, Qantas, and Codan considered ASX stocks to buy in May 2026?
Ans. Each Company offers a different earnings driver. BHP provides commodity income and copper growth, Qantas a recovery opportunity with intact demand, and Codan a technology growth story backed by a 60%-plus earnings upgrade.
Q2. What is the BHP investment strategy 2026 built on?
Ans. It rests on iron ore cash flow funding dividends today, and copper exposure positioning the Company for long-term growth driven by electrification and infrastructure demand.
Q3. Is Qantas a good buy despite higher fuel costs?
Ans. The fuel cost impact is real, but Qantas has upgraded its H2 2026 revenue guidance and benefits from fleet renewal, loyalty growth, and resilient domestic and international demand.
Q4. What drove Codan’s FY26 earnings upgrade?
Ans. Both its Minelab metal detection segment and Communications division are performing strongly at the same time, supporting a 60%-plus uplift in projected EBIT and NPAT for FY26.
Q5. Are these the best ASX 200 shares for every investor?
Ans. Not necessarily. Each carries its own risks, including commodity price exposure, fuel cost volatility, and valuation risk. Investors should assess their own risk tolerance and time horizon before committing capital.
Disclaimer
This article is intended for informational purposes only and does not constitute financial or investment advice. All content is based on publicly available data, company announcements, and analyst reports cited at the time of publication. Share price and market data reflect figures available as at 2 May 2026. Past performance does not guarantee future results. Investing in ASX-listed securities involves risk, including the potential loss of capital. Readers should conduct independent research and seek licensed financial advice before making any investment decisions. Colitco does not hold any position in the companies mentioned in this article.
Sources
https://discoveryalert.com.au/bhp-shares-hold-rating-dividend-copper-valuation-2026/
https://www.fool.com.au/2026/05/02/id-buy-bhp-and-these-asx-200-shares-with-5000-in-may/
https://stocksdownunder.com/asx/qan-share-price/ https://stockanalysis.com/quote/asx/QAN/
https://stocksdownunder.com/codan-asx-cda-fy26-trading-update/
https://stockanalysis.com/quote/asx/CDA/
Last modified: May 2, 2026
