It has been a relatively bountiful few years for the S&P/ASX 200 Index (ASX: XJO) and many ASX shares on our share market. Over the past 12 months, the ASX 200 has risen by a healthy 11%, stretching to 43.85% over the past five years.
With broad-market gains like that, many ASX investors would have done very well by owning shares. But the rising tide of the ASX never lifts all boats. There are some ASX shares that have failed to match the robust performance of the broader market. As such, some of these shares would probably be held in disdain, or even hated, by many ASX investors. Today, let's look at two of these shares and discuss which might be the better buy today.
Two ASX shares that many investors might hate right now
Transurban Group (ASX: TCL)
Transurban Group used to be a very popular choice on the ASX, particularly for dividend income investors. Many might still hold the toll road operator in their portfolios today. Those investors would be aware that Transurban hasn't been the best investment to have held over long periods of time, though. Sure, the company currently sports a decent and reliable dividend yield of 4.4%, albeit unfranked. But Transurban shares have been stuck in the mud for a long time.
Over the past five years, this company has lost 3.46% of its value, underperforming the broader market by more than 45%.
Transurban is viewed by many investors as a bond proxy investment. Retirees and income investors love its predictable payouts. But, like most bond proxies, Transurban shares are highly sensitive to increases in interest rates. As such, the company has suffered amid one of the steepest rate hiking cycles in history, occurring between 2022 and 2024.
Woolworths Group Ltd (ASX: WOW)
Woolworths is another blue-chip ASX share that has lost some of its lustre with investors. Those who bought Woolworths shares five years ago would be sitting on a gain today of just 2.71%. Again, that is a drastic market underperformance.
Woolworths' fall has been an interesting trajectory to watch. The company previously traded on a much higher price-to-earnings (P/E) ratio than its current 24, reflecting its dominance of the grocery and supermarket sector in Australia. However, over the past year or so, the company has revealed that its sales and market share have been under pressure, with Woolworths losing customers to arch-rival Coles Group Ltd (ASX: COL).
As a result, the Woolworths share price has stagnated as investors lowered the earnings multiple on its shares.
Which ASX share to buy today?
Between Woolworths stock and Transurban shares, I would have to go with Woolworths today. Sure, the company has had some short-term issues, which have depressed its share price. However, Woolworths still has a commanding lead over Coles when it comes to market share, despite the latter's recent gains. The company is investing in a turnaround, as well as expanding automation and home deliveries. I expect these investments to pay dividends (literally) in the years ahead.
Transurban, meanwhile, has far more limited upside in my view. Yes, the company has lucrative contracts on its tolled roads, which allow it to, at a minimum, match the rate of inflation. However, apart from inflation-beating dividends, there are few growth avenues available going forward. Investors also have to grapple with the long-term issue that Transurban only holds the rights to toll its roads for a finite period.
As such, I would pick Woollies over Transurban if I had to buy one of these hated ASX shares today.
