Once a month analysts at Morgans pick out their best large cap ideas for the month ahead.
These are the shares which the broker believes offer the highest risk-adjusted returns over a 12-month timeframe.
Here are the eight best large cap ASX shares to buy in January according to the broker:
APA Group (ASX: APA)
Its analysts like this energy infrastructure company due to its attractive dividend yield and positive growth prospects. The broker believes APA Group can grow its dividends per share by a mid-single digit CAGR though to FY 2024.
Aurizon Holdings Ltd (ASX: AZJ)
Morgans likes Aurizon due to its predictable earnings. Furthermore, it sees a lot of value in its shares at the current level. Especially given its ~5% dividend yield and ongoing share buyback.
Sonic Healthcare Limited (ASX: SHL)
The broker is a fan of Sonic Healthcare's defensive earnings and growing underlying momentum. It also notes that its strong balance sheet has the capacity to support future acquisitions or joint ventures.
Telstra Corporation Ltd (ASX: TLS)
Morgans is positive on Telstra based on improving market sentiment. Furthermore, it believes that whatever happens with the TPG Telecom Ltd (ASX: TPM)-Vodafone Australia merger will be a positive in the short term. This is because a successful merger is likely to support more rational competition, whereas a failure to merge is likely to give Telstra a competitive advantage.
Transurban Group (ASX: TCL)
Transurban makes the list due to the quality of its roads and its strong pricing power. Combined, the broker appears confident of mid-single digit dividends per share growth for the foreseeable future. And with rates likely to stay lower for longer, it expects to see continued share price support.
Treasury Wine Estates Ltd (ASX: TWE)
The broker likes Treasury Wine Estates due to its strong earnings visibility and its long runway of earnings growth. It also believes its shares are attractively priced despite solid share price gains over the last 12 months.
Westpac Banking Corp (ASX: WBC)
Despite the AUSTRAC scandal, Westpac remains the broker's preferred pick in the banking sector. It likes the bank due to its relatively low risk profile in relation to loan book positioning and low reliance on treasury and markets income. It believes the recent sell-off is overdone.
Woodside Petroleum Limited (ASX: WPL)
This energy producer could be a good option for income investors. This is because Morgans believes Woodside has the largest and most sustainable dividend profile in its Oil and Gas coverage universe. It estimates a sustainable yield of over 5% fully franked.
