3 large cap growth shares for any portfolio

These large cap growth shares are good options for anyone.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In the long-term the best way to grow your portfolio is with 'growth' shares. Businesses that are re-investing for growth and have growing returns on equity are excellent ideas for market-beating holdings.

I can understand if investors want to avoid small caps, they may appear too risky. But, I wouldn't want to invest in large caps that are essentially done growing, as they aren't going to compound their earnings strongly.

Large cap growth shares should be able to offer both growth and security:

Challenger Ltd (ASX: CGF)

I think Challenger is the best way to get exposure to Australia's growing wealth and retiring population. Each year the company reports growing annuity sales and growing assets under management (AUM), which leads to growing management fees for Challenger.

With the number of people over 65 (retirement age) set to grow by 75% over the next 20 years it's likely Challenger could anticipate a similar sort of growth in demand for its products.

Challenger is currently trading at 14x FY19's estimated earnings with a grossed-up dividend yield of 4.64%.

REA Group Limited (ASX: REA)

REA Group is the best way to get exposure to the property market without having to own a property in my opinion. It owns the market-leading site realestate.com.au but it also runs realcommercial.com.au and flatmates.com.au.

It is on a path for more growth with higher fees for ads on its sites, investments in overseas sites and diversification into areas like mortgage broking.

REA Group is currently trading at 30x FY19's estimated earnings with a grossed-up dividend yield of 1.78%.

Ramsay Health Care Limited (ASX: RHC)

Ramsay is Australia's largest private hospital operator and one of the largest in the world with its hospital networks in the UK and France.

This is another business that should benefit from Australia's ageing population as long as the cost of private health insurance can be brought under control. More elderly patients should mean more revenue and profit over the long-term.

Ramsay is currently trading at 20x FY19's estimated earnings with a grossed-up dividend yield of 3.12%.

Foolish takeaway

All three shares are high quality businesses with long-term growth plans, I think they all have market-beating potential. REA Group is trading a bit too expensively for me to consider buying it at the moment, but Challenger is looking much more attractive in the $10s whilst Ramsay is also better value than it has been for several years.

Motley Fool contributor Tristan Harrison owns shares of Challenger Limited and Ramsay Health Care Limited. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Best ASX Shares

Three travellers laughing and smiling outside an airport
⏸️ Best ASX Shares

If you'd invested $2,000 in Webjet (ASX:WEB) shares 10 years ago, here's what it would be worth now

The travel expert has proved a winner for long-haul investors...

Read more »

illustration of three houses with one under a magnifying glass signifying mcgrath share price on watch
⏸️ Best ASX Shares

The 5 best ASX real estate shares of the 2021 financial year unmasked

Office space, industrial storage, retail malls and residential. These companies cover them all.

Read more »

asx share price increase represented by golden dollar sign rocketing out from white domes of lithium
Energy Shares

5 best ASX energy shares of the 2021 financial year revealed

As the world emerged from initial COVID lockdowns, the demand for energy soared.

Read more »

best asx 200 shares of financial year 2021 represented by 2021 formed with gold piggy bank
⏸️ Best ASX Shares

Meet the best performing ASX 200 shares of FY21. Are yours on the list?

These companies have been crowned the best of the best in FY21...

Read more »

retail asx share price represented by shopping trolley full of cash
⏸️ Best ASX Shares

How I'd build a 'best stocks to buy now' list

Focusing on the quality and prices of companies from a diverse range of sectors could make it easier to build…

Read more »

asx share price on watch represented by investor looking through magnifying glass
⏸️ Best ASX Shares

How I'd aim to find top shares to buy in March 2021

Comparing companies with their peers and considering how they might change in future could allow an investor to find the…

Read more »

Brest ASX shares represented by piggy bank surrounded by autumn leaves
⏸️ Best ASX Shares

Top ASX shares to buy in March 2021

Our Foolish contributors have compiled a list of some of the ASX shares experts are saying to Buy in March.…

Read more »

rising asx share price represented by man with arms raised against blackboard featuring images of dollar notes
⏸️ Best ASX Shares

Why the Wesfarmers (ASX:WES) share price has soared 24% in a year

The Wesfarmers Ltd (ASX:WES) share price has been a solid performer over the past year. Here's why this ASX blue…

Read more »