Elite Australian Quality Stocks To Own In October 2026

Rising global borrowing costs are forcing weaker businesses to scramble for funding, while stronger Australian companies with solid cash flows and low debt keep more control in their own hands. That gap matters for investors who care about resilience rather than hype. This article highlights three stocks from a quality focused screener that favours high return on equity and robust balance sheets, so you can focus on financial strength first.

The three examples below are just a sample from this quality filter, and the full screen surfaced 9 more businesses with equally solid stories that are not covered in the article. If you want to go beyond the shortlist and identify your own high conviction ideas, head straight to the Solid Balance Sheet and Fundamentals screener.

Supply Network (ASX:SNL)

Overview: Supply Network runs the Multispares brand, supplying aftermarket truck and bus parts plus related supply-chain services across Australia and New Zealand.

Operations: Supply Network generates A$403 million in aftermarket commercial vehicle parts revenue, with A$354 million from Australia and A$55 million from New Zealand.

Market Cap: A$1.5b

JB Hi-Fi offers a cleaner balance sheet story. Supply Network, by contrast, provides a focused aftermarket parts business with high recurring demand, 29.7% ROE and a net profit margin of 11.8%. That combination of returns, earnings quality and dividends linked to its Multispares network may be attractive for investors who believe that pressure on funding costs will remain contained.

If you want to stress test that funding assumption against the actual numbers, start with the Supply Network financial health report and see where Supply Network’s resilience could be tested next.

Codan (ASX:CDA)

Overview: Codan designs and sells high-margin communications systems for governments and utilities alongside metal detection products, with the Communications segment driving its connection to the solid balance sheet and fundamentals theme through recurring, contract-backed earnings.

Operations: Codan generates about A$506 million from Communications and A$362 million from Metal Detection, with sales spread across the United States, United Arab Emirates and other international markets.

Market Cap: A$12.1b

Codan matters for this screener because its Communications arm turns specialist radio gear and command solutions into high return, contract-based cash flows that can support a resilient balance sheet when conditions shift.

"Heightened geopolitical tensions, increased defense spending, and the need for resilient communications infrastructure, especially in light of remilitarization and growing demand for unmanned systems, are expanding Codan's customer base and forward order book in defense and public safety, driving both near-term and long-term revenue growth."

What happens if one unseen pressure on Codan’s margin mix between Communications and Metal Detection moves faster than current expectations?

If that margin risk matters to you, read the full narrative for Codan to see where Codan’s earnings mix could be quietly accelerating or stalling in the future.

JB Hi-Fi (ASX:JBH)

Overview: JB Hi-Fi is a major Australian and New Zealand retailer of consumer electronics, appliances and related services, with high-margin tech categories central to its strong returns and solid balance sheet profile.

Operations: JB Hi-Fi generates A$7.4b from JB Hi-Fi Australia, A$2.9b from The Good Guys, A$430.7 million from JB Hi-Fi New Zealand and A$273.1 million from e&s.

Market Cap: A$7.9b

JB Hi-Fi fits this solid balance sheet and fundamentals screen because the core electronics and appliance chains generate high returns, and management continues to focus on those strengths rather than pursuing riskier side bets.

"The acquisition of e&s is expected to enhance JB Hi Fi's access to premium home appliances and expand the customer base to include builders and commercial clients, potentially boosting revenue growth."

What really tests that quality story is how one unresolved pressure on retail margins and pricing power plays out over the next few years.

That margin squeeze question is exactly what the full narrative for JB Hi-Fi unpacks, showing where JB Hi-Fi’s earnings power could be quietly accelerating while headline retail worries dominate.

Curious About What You Might Be Missing?

Fresh opportunities can gain momentum fast while older stories lose their edge. Scan these under the radar lists before the crowd catches on and get in early.

• Spot cash generative miners before the next breakout by checking the 36 elite gold producer stocks curated for production strength and balance sheet resilience.
• Explore the structural shift toward AI infrastructure while it still feels early and track the 92 AI infrastructure stocks powering data centers and semiconductor supply chains.
• Consider the robotics wave as factories, warehouses and logistics networks upgrade and review the 91 robotics and automation stocks already building that automation backbone.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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