November has been a very interesting month with both the US election and the subsequent share market rally. I decided to invest in two Australian stocks earlier this week because of how excited I am about the futures of these ASX shares.
I'm also optimistic about another Australian stock which I'll tell you about. It may be the next investment I make, I'm weighing up a few different options.
Plenty of volatility may occur over the next few months and years, which could open up more opportunities. I'm interested in these companies because of their growth outlook and the defensive earnings attributes they bring to the table.
Tuas Ltd (ASX: TUA)
Tuas is a Singapore-based telecommunications business, but it's listed on the ASX because it was demerged from TPG Telecom Ltd (ASX: TPG). It's one of the shares I bought this week.
Impressively, Tuas has made significant progress in Singapore. At the end of FY24, it reached 1.05 million mobile subscribers, representing 28% year-over-year growth and 79% growth over two years.
Combined with a slight increase in average revenue per user (ARPU), Tuas' revenue is rapidly climbing – it increased 36% in FY24.
I don't expect its mobile subscribers to rise strongly in Singapore forever, but it can pursue other growth avenues.
First, the telco is now selling broadband services in the country. At the end of FY24, it had 4,000 broadband subscribers, with good prospects for more in FY25 and beyond.
I'm particularly excited by its potential to expand to other Asian countries, such as Malaysia or Indonesia, which have much larger populations than Singapore.
Tuas is also demonstrating good signs for future profit growth. FY24 saw the operating profit (EBITDA) grow 60%, with the EBITDA margin improving from 36% to 42%. If revenue keeps rising, I expect the EBITDA margin could climb further.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
This is my favourite Australian stock because of everything the investment house offers investors. I bought some more shares this week.
Soul Patts has the flexibility to invest in different industries and asset classes, including ASX shares, private equity, property and credit/bonds. It has built a diversified portfolio which continues to grow. In unpredictable times like this, diversification is a good idea.
In terms of industries, the company has exposure to telecommunications, resources, property, building products, financial services, electrification, swimming schools, agricultural assets, retirement living and more.
Soul Patts has been listed for 120 years and has paid a dividend every year during that time. The company has also grown its annual ordinary dividend every year since 2000. That growth streak isn't guaranteed to continue, but I think the grossed-up dividend yield of 4% (including franking credits) is appealing as a starting point.
Brickworks Limited (ASX: BKW)
Brickworks is an Australian stock I'm thinking about investing in next.
It operates several leading Australian building product businesses, including Austral Bricks, Bowral Bricks, Nubrik, Bristle Roofing, Austral Masonry, GB Masonry, UrbanStone, Terraçade, and Capital Battens. It's also involved with Southern Cross Cement.
When interest rates in Australia eventually come down, I think Brickworks is well positioned to benefit if building and renovation activity recovers.
I'm particularly attracted to the company's industrial property exposure, with its 50% stake in an industrial property trust alongside partner Goodman Group (ASX: GMG).
With limited land in Australia's large cities, these properties are generating strong rental income, which the company expects to keep rising. There are also multiple sites where the trust can build more large-scale warehouses and unlock more value and cash flow for the Australian stock.
Brickworks also owns approximately a quarter of Washington H. Soul Pattinson, so if Soul Patts can continue growing then Brickworks will be a significant beneficiary.
I think the Brickworks share price is attractive for the amount of assets on its balance sheet.
