Every long-term portfolio needs some reliable, stable earners with permanent tailwinds driving them.
And consumer demand doesn't come much more basic than construction and transport. They are services that are not going to go out of fashion.
Here are two S&P/ASX 200 Index (ASX: XJO) shares to buy that are exactly in such businesses:
Ready to grow 'development revenue rapidly during the next five years'
Lendlease Group (ASX: LLC) shares have tortured investors in recent times.
The share price has crashed almost 60% over the past five years, while this year it's down about 1.3%.
But Ord Minnett senior investment advisor Tony Paterno reckons it's a bargain buy now.
"Lendlease is a diversified global real estate group," Paterno told The Bull.
"The group is seeking better returns on capital, accelerating its development pipeline and shifting focus outside its home base of Australia."
The big driver for the company, according to Paterno, is its post-pandemic recovery.
"Our base case is [that] Lendlease grows its development revenue rapidly during the next five years as the group recovers from COVID-19 interruptions," he said.
"Crystallising profits in existing development projects enables Lendlease to increase its production rate on new projects."
Even if capital growth doesn't come immediately, there is a 2% dividend yield to keep long-term investors going.
According to CMC Markets, three out of eight analysts currently rate Lendlease shares as a buy.
'We expect operating margins to improve'
On the transport side, Paterno recommends adding Bapcor Ltd (ASX: BAP) to the portfolio.
"Bapcor is Asia Pacific's leading provider of vehicle parts, accessories, equipment and service," he said.
"We believe continuing earnings growth will be driven by strong underlying demand and sales growth in the core Burson Auto Parts business."
The Bapcor share price has largely gone sideways since COVID-19 struck. It's down 11% over the past five years.
The stock does pay out a handy 3.6% dividend yield, fully franked.
The retailer is growing its store network in Australia and New Zealand, according to Paterno.
"We expect operating margins to improve. Bapcor is also developing operations in Asia, which offers longer term upside."
Many of Paterno's peers agree with his bullishness on Bapcor. Four out of six analysts are rating the stock as a buy on CMC Markets.
