Well, it’s the start of a new year and a new decade. The last decade brought great returns for anyone invested in shares – whether that be ASX shares, US shares or most shares around the world.
But it’s onwards and upwards now into the new decade, so here are the top 10 ASX shares I would love to add to my portfolio in 2020. All are stock I currently don’t own, but would love to have in my portfolio this time next year.
Woolworths Group Ltd (ASX: WOW)
- What it is: Australia’s largest supermarket chain, with a network of bottle shops part of the deal.
- Why I want it: Woolworths has consistently demonstrated an ability to protect and grow its market share in the face of fierce rivalry. This should lead to ongoing earnings growth as well as robust dividend payments for years to come.
Afterpay Ltd (ASX: APT)
- What it is: The home-grown, millennial-loved pioneer of the buy-now, pay-later space.
- Why I want it: Afterpay has proved its critics wrong time and time again. It seems to have held on to its first mover advantage in its industry and has also proved capable of successfully expanding beyond our shores into the US and UK markets.
Commonwealth Bank of Australia (ASX: CBA)
- What it is: Australia’s largest bank needs no introduction.
- Why I want it: Commonwealth Bank has managed to dodge some of the worst of the banking sector misconduct that some of its ‘big four’ peers are now dealing with. Further, it was the only major ASX bank not to cut its shareholder payments this year. Thus, I can’t go past CBA for a solid income stock this year.
iShares Global Consumer Staples ETF (ASX: IXI)
- What it is: An ETF (exchange traded fund) that holds a basket of global stocks all in the highly defensive consumer staples sector.
- Why I want it: The consumer staples sector is renowned for its recession-resistant characteristics. Getting top notch companies like Nestle, Clorox, Proctor & Gamble, Coca-Cola and Walmart all in one share appeals to me greatly in the current ageing bull market. Having some international diversification is also important and another reason why I want this ETF in my portfolio ASAP.
InvoCare Limited (ASX: IVC)
- What it is: Australia’s largest funeral and crematorium provider
- Why I want it: Morbid as it is, the reality is that death is one of the only certainties in this life. Thus, I consider this kind of company to be a solid investment that is unfortunately probably going to be around for a while yet. InvoCare also has a fairly solid history of paying dividends too, which only increases my attraction to this stock.
CSL Limited (ASX: CSL)
- What it is: Our largest healthcare company and a leader in global production of blood plasma medicines and vaccines.
- Why I want it: CSL has been one of the best companies to own over the past decade and I have kicked myself for not owning already. I fully expect it to continue this pattern going forward and so would love it in my portfolio.
Ramsay Health Care Limited (ASX: RHC)
- What it is: The largest provider of private hospitals in the country.
- Why I want it: Ramsay has also been growing at a very healthy pace over the last ten years. I think as our population ages, companies like Ramsay will stand to benefit enormously – especially if the government increases the incentives for private health care in the future (which I think is likely). Ramsay is also one of the best dividend growth shares on the ASX – boasting an uninterrupted 20 year streak of shareholder payrises! That alone is hard to go past.
WAM Research Ltd (ASX: WAX)
- What it is: WAM Research is a small-cap focused LIC (listed investment company) run by the venerable Wilson Asset Management.
- Why I want it: This company has one of the best dividend yields on the ASX – currently sitting around 6.5% (9.3% grossed-up). Although the shares are almost always trading at a premium price, I would still love some shares in my portfolio in 2020.
Transurban Group (ASX: TCL)
- What it is: The largest operator of private toll-roads in the country, with major tolled motorways in Sydney, Melbourne and Brisbane.
- Why I want it: As our population grows (especially in our capital cities), I see traffic volumes only going one way in the 2020s – even if we all move towards buying electric cars this decade. This should bode very well for Transurban, which owns some of the most vital arterial roads in Australia. Transurban also has inflation-linked price increases built into many of its contracts, which increases earnings certainty and ensures a rock-solid dividend for TCL shares.
And last, but certainly not least is…
Medibank Private Ltd (ASX: MPL)
- What it is: The formerly government owned company is the largest provider of private health insurance in the country.
- Why I want it: Although private health is suffering from falling membership these days, I expect the government to halt this trend with new policies in the future. Our rapidly ageing population will lead to massive pressure on our public Medicare system in the decades ahead – so making private health care more affordable is inevitable in my view. Medibank has also built a healthy track record of dividend increases in its first years on the stock market as well.
I think all 10 of these companies would be great businesses to own in 2020 and beyond. Of course, waiting for the right price is the real game here, so I’ll be keeping my fingers crossed this year for a good opportunity to build a long-term position in all 10 of these top notch ASX shares.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and CSL Ltd. The Motley Fool Australia owns shares of and has recommended Transurban Group. The Motley Fool Australia owns shares of iShares Global Consumer Staples ETF. The Motley Fool Australia has recommended InvoCare Limited and Ramsay Health Care 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.