So, you’ve decided to take the plunge into ASX share market investing? Great! I hope that you find share investing as interesting and rewarding as I do.
In this article, we’ll take a look at 4 of my top picks to get you started. Keep in mind, it’s always a good idea to expand your portfolio over time to ensure you have sufficient market diversification and not too much portfolio weighting in any one share.
BHP Group Ltd (ASX: BHP)
BHP is my top pick of the ASX resource sector shares, as it is a diversified natural resources company and is one of the world’s top producers of commodities like iron ore, coal and copper. As it is the third largest share listed on the ASX, not only can it leverage economies of scale, it is frequently bought and held by super funds and managed funds providers. FY19 was a very successful year for BHP, with a profit from operations of US$16.1 billion at a margin of 53% for continuing operations. BHP currently pays a fully franked dividend of 5.0%, thus providing a great income stream.
Domino’s Pizza Enterprises Ltd. (ASX: DMP)
Over the past decade, Domino’s has evolved from a very small operation to become Australia’s largest pizza chain and a massive international enterprise with thousands of restaurants. Domino’s provides customers with a seamless digital experience, from online ordering through to pizza delivery, and its online sales now account for more than two-thirds of Domino’s business. Its underlying earnings per share have grown impressively at a compound annual growth rate of over 22% during the last 10 years. Dominos currently pays a fully franked dividend yield of 2.2%.
Ramsay Health Care Limited (ASX: RHC)
Over the past few decades, Ramsay has grown from a small Australian operation to become Australia’s largest private healthcare provider, with operations in 11 countries. Ramsay continues to grow revenues from its existing facilities, as well as growing through acquisitions and new developments. Its size and scale enable it to spread its operating costs and provides it with a competitive advantage in negotiations with health insurers regarding patient fees. For FY19, Ramsay recorded overall revenue of $11.4 billion, a 24.4% increase on the prior corresponding period.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Sydney Airport is a pure monopoly, which gives it enormous pricing power. You only have to look at its extraordinarily high parking fees in its car parks to give you some indication of this. Sydney Airport also has a diverse earning base. In addition to charges to airlines, it generates revenues from retail operations, property rentals, car rental concessions, security and parking and ground transport services. I believe there’s the potential for growth over the next decade as Sydney Airport’s domestic and international passenger numbers should climb higher. Sydney Airport currently pays a fully franked dividend yield of 4.4%.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor Phil Harpur owns shares of Domino's Pizza Enterprises Limited. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises 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.
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