The S&P/ASX 50 index is home to 50 of the highest quality and well-known companies in Australia.
While I wouldn’t necessarily be buying all the shares on the index, I think there are some quality options for investors to consider.
Three ASX 50 shares I would buy today are listed below:
a2 Milk Company Ltd (ASX: A2M)
The first ASX 50 share to consider buying is this infant formula and fresh milk company I think a2 Milk Company is a great option due to its very positive long term growth outlook. This is due to the expansion of its fresh milk footprint, potential earnings accretive acquisitions, and the increasing demand for its infant formula in China. In respect to the latter, although a2 Milk Company is generating significant sales in the China, it still only has a modest consumption market share of 6.6%. I believe this gives it a long runway for growth in the country over the next decade.
BHP Group Ltd (ASX: BHP)
Another ASX 50 share to consider buying is BHP. I believe the Big Australian is the highest quality option in the resources sector thanks to its diverse and world class operations. In addition to this, BHP is currently benefiting greatly from favourable commodity prices. This is especially the case with iron ore prices, which are still trading above US$100 a tonne. This is materially higher than its operating costs and means its iron ore operations are generating huge free cash flows. And with its balance sheet in a very strong position, the majority of this is likely to be returned to shareholders through dividends.
Goodman Group (ASX: GMG)
A final ASX 50 share to consider buying is Goodman Group. It is an integrated commercial and industrial property group with a high quality portfolio of assets. I think it is one of the best long term options on the index due to the positive outlooks of its assets. This is due to their exposure to structural tailwinds such as ecommerce. I expect these assets to be in demand with their blue chip tenants for many years to come, which should underpin solid income and distribution growth over the next decade.
These 3 stocks could be the next big movers in 2020
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In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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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