I think you can start a really good portfolio with as little as $10,000. For me, the best ASX shares to buy right now, or anytime, are ones that cover a few important areas. First, your portfolio should include cheap shares in good companies. Second, it needs to dedicate a small percentage to companies likely to see significant share price growth (although, not moonshots). And third, it should contain the beginning of an income stream.
Finding cheap shares is fraught with danger right now. A level of exuberance and optimism seems to be driving share prices. In fact, many companies are now trading at higher levels than they were in February. This is despite the impacts of fires, a pandemic lockdown and Victoria firmly in the grip of a second wave.
On that note, let’s take at look at the following ASX shares. These are all currently on my watchlist and I’m likely to invest in most of them in the near future.
Cheap ASX value shares
I think DEXUS Property Group (ASX: DXS) is one of the best ASX shares to buy right now. Dexus is trading at a market cap of $10.27 billion, approximately $6 billion less than its property portfolio is worth. The company has a price-to-earnings ratio (P/E) of 6.55, its lowest level for 7 years. At this price, it is paying a trailing 12-month (TTM) dividend yield of 5.3%.
I would commit $4,000 to this company. Why? Three reasons. First, office property is the real estate sector least impacted by the coronavirus pandemic. Most of Dexus Property’s assets are offices with a 97% occupancy rate. Second, the company has a weighted average lease expiry (WALE) or average lease duration, of 4.4 years. Third, it is valued at less than its real estate portfolio and pays a good dividend.
Another option for this position could be Centuria Office REIT (ASX: COF). It is a smaller version of Dexus and is a pure-play office fund. Like Dexus, it is valued at less than its portfolio value, has high occupancy, a long WALE, and has a higher TTM dividend yield than Dexus. Personally, however, I think I’m likely to get better share price growth from Dexus.
I would also invest $4,000 in Aristocrat Leisure Limited (ASX: ALL). In the company’s 2019 annual report, it reported record profits on revenue of $4.4 billion. The company’s three main product verticals are electronic gaming machines, casino management systems, and digital social games.
In 2020 the land-based products, electronic gaming and casino management systems have suffered significant economic impact due to coronavirus. Nevertheless, the company has continued to invest in its digital games. Moreover, in the six months to 31 March, digital revenues increased by 27%, making up 46% of overall revenues.
I believe casino revenues are likely to have already started flowing again across various countries, as well as among a few Australian casinos. The company will continue to see issues from a lack of tourism, but digital gaming will partly offset this. The company is trading at a P/E of 10.10. Less than half of its 10 year average P/E of approximately 23. I think this is a good company at a reasonable price.
My view is that this ASX share will provide an investor with decent share price growth over a 2 – 3 year horizon.
The best ASX shares to buy right now for growth
I have only allowed $2000 from the initial $10,000 to invest in riskier growth shares. My choice of the best growth share to buy right now is definitely Tyro Payments Ltd (ASX: TYR). The company is a very impressive payment processing fintech. It entered a market dominated by the banks and has become Australia’s largest EFTPOS provider of all authorised deposit-taking institutions (ADI) outside of the big 4 banks.
From 25 March, the company has reported its transactions weekly for transparency during the pandemic. In trading update number 17 the company showed a full year increase in transactions of 15% in spite of all of the problems this year. In addition, the company’s FY21 transaction volume is already 22% higher than the previous corresponding period.
The company only listed on the ASX in December last year and has yet to post full year results. It is likely to either post a small result, producing a very high P/E or post a loss. Growth companies are volatile, however I am a believer in this company and I think it will continue to grow at a good rate for the next 2 – 3 years.
Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. 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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