A new month is here, so what better time for investors to look at making additions to their investment portfolios.
With that in mind, let's take a look at three ASX 200 stocks that Morgans thinks are top buys in July.
It notes that these are stocks "offer superior forecast dividend yields and may be suitable investments for those seeking income."
Here's what its analysts are saying about them:
BHP Group Ltd (ASX: BHP)
Morgans is bullish on the Big Australian and sees it as an ASX 200 stock to buy this month.
It likes the mining giant due to its strong margins and attractive dividend yield. It explains:
BHP Group is the largest diversified mining company in the world. BHP has extensive iron ore, copper, nickel and coal operations, and will soon add potash to its portfolio once its massive Jansen project comes online in late 2026. Besides nickel, which has proven volatile, the rest of BHP's basket of market exposures share the similar characteristic of typically boasting bumper margins throughout the cycle. Over the last decade BHP has shifted its corporate strategy toward streamlining its business, protecting its balance sheet, slowing its pace of investment and maximising shareholder returns. Despite an impressive shareholder performance over recent years, BHP's dividend yield has remained above market.
Morgans has an add rating and $48.30 price target on its shares. The broker also expects fully franked dividends yields of ~5% this year and next.
Eagers Automotive Ltd (ASX: APE)
Another ASX 200 stock that Morgans is positive on its automotive retailer Eagers Automotive.
Although trading conditions are tough, the broker thinks it is worth sticking with the company due to its positive long term outlook. It said:
Eagers Automotive Ltd is the leading automotive retail group in Australia and New Zealand, operating for over 100 years and representing a diverse portfolio of OEM (original equipment manufacturer) brands. While current industry dynamics in the auto sector (margin pressure; cost of living impacts) are expected to persist in the near-term, we view the scale operators (such as APE) as best placed to navigate this challenging dynamic. Longer-term, we are positive on APE's various strategic initiatives and expect it can continue to scale; and sustain a structurally higher return on sales through the cycle.
Morgans has an add rating and $14.35 price target on its shares. In respect to dividends, it is forecasting yields of approximately 7% in FY 2024 and FY 2025.
HomeCo Daily Needs REIT (ASX: HDN)
A third ASX 200 stock that could be a buy according to Morgans is the HomeCo Daily Needs REIT.
It likes the company due to its blue chip tenants, attractive dividend yield, and huge development pipeline. The broker said:
HomeCo Daily Needs REIT has a +$4.5bn real estate portfolio focused on daily needs retail (Large Format Retail; Neighbourhood; and Health Services) across +50 properties with the top five tenants being Woolworths, Coles, JB Hi-Fi, Bunnings and Spotlight. Most of leases are fixed. The portfolio has resilient cashflows, with the majority of tenants being national. Sites are in strategic locations with strong population growth. HDN offers an attractive distribution yield, with a +$600m development pipeline providing further growth.
Morgans has an add rating and $1.37 price target on its shares. As for income, it is forecasting 6%+ dividend yields this year and next.
