If you have money to invest but a low tolerance for risk, then read on!
Not all shares on the local market are medium to high risk. For example, listed below are two cheap ASX shares that could be considered as both safe and steady.
Furthermore, analysts have recently put the equivalent of buy ratings on them and are tipping attractive returns over the next 12 months. Here's what analysts are saying about these shares:
APA Group (ASX: APA)
APA Group could be classed as a lower risk option for investors. That's because the energy infrastructure company and owner of a $27 billion portfolio of gas, electricity, solar and wind assets, has defensive and predictable earnings.
In fact, these assets have underpinned consistent earnings and dividend growth for almost two decades. There are very few shares that can match APA Group's record on the local market.
Macquarie thinks that APA Group could be a great option for investors right now. It has an outperform rating and $9.40 price target on its shares. This implies market-beating potential upside of ~19% for investors over the next 12 months.
Its analysts also expect some big dividend yields from its shares in the near term. They are forecasting dividends of 56 cents per share in FY 2024 and then 57.5 cents per share in FY 2025. Based on the current APA Group share price of $7.92, this equates to 7.1% and 7.25% yields, respectively.
Telstra Group Ltd (ASX: TLS)
Another cheap ASX share to look at is Telstra. It is of course the leading player in the traditionally defensive telecommunications industry.
Goldman Sachs sees a lot of value in its shares at current levels. Particularly given the positive outlook for the key mobile business. The broker believes that this business will underpin "low risk earnings (and dividend) growth" in the coming years.
In addition, the broker sees "a meaningful medium term opportunity to crystallise value through commencing the process to monetize its InfraCo Fixed assets – which we estimate could be worth between A$22-33bn."
Goldman has a buy rating and $4.30 price target on its shares. This implies potential upside of 9% for investors from current levels.
In addition, the broker is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 19 cents per share in FY 2025. Based on the current Telstra share price of $3.95, this equates to yields of 4.6% and 4.8%, respectively.
