Why these ASX 200 shares could be strong buys

Here are two buy-rated ASX 200 shares…

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The S&P/ASX 200 Index (ASX: XJO) is home to a large number of high quality companies. This can make it hard to decide which ones to buy ahead of others.

To help narrow things down, I have picked out two ASX 200 shares that brokers rate very highly. Here’s what they are saying about them:

Goodman Group (ASX: GMG)

The first ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property company with operations across the world.

Goodman currently has $62 billion of total assets under management and over 1,600 customers globally. Among its portfolio are warehouses, data centres, large scale logistics facilities, and business and office parks. These properties are greatly in demand with end users due to being located in key gateway cities around the world. This has led to a sky high occupancy rate and robust earnings growth in recent years.

Morgan Stanley is a fan of Goodman. It was pleased with its strong start to FY 2022 and appears confident its positive form can continue. It has an overweight rating and $26.50 price target on Goodman’s shares.

South32 Ltd (ASX: S32)

Another ASX 200 share to consider is South32. This mining giant produces a wide range of commodities including alumina, aluminium, bauxite, energy and metallurgical coal, manganese, nickel, silver, lead, and zinc. It will also soon add copper to this with the acquisition of an interest in the Sierra Gorda copper mine in Chile.

Thanks to this diversity, and particularly its exposure to aluminium, South32 has been tipped to generate significant free cash flow in the coming years.

It is largely for this reason that Goldman Sachs currently has a conviction buy rating and a $4.40 price target on its shares. But it doesn’t stop there. The broker is also forecasting double-digit dividend yields through to at least FY 2026.

Should you invest $1,000 in South32 right now?

Before you consider South32, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and South32 wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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