Safer Australian stocks can be a great place to invest due to the resilient quality they offer for our portfolios.
It's impossible to totally avoid potential declines in the stock market. For there to be the chance of gains, then declines also need to be a possibility. That's why ASX shares are riskier than cash savings, but they can also deliver greater rewards.
But, it's not as though every share price rises and falls by the same amount at the same time during good and bad times of the market.
Some businesses experience cyclical earnings, while others have significant growth expectations or very predictable earnings.
When safer Australian stocks display resilient earnings, it's likely that they'll fall less during negative times. Investors typically value a business based on how much profit it's expected to make, so a decline in limited earnings should be a big positive for a business' share price performance.
The two businesses below really appeal to me as safer Australian stocks with $7,000.
Image source: Getty Images
Centuria Industrial REIT (ASX: CIP)
This is a real estate investment trust (REIT), meaning it owns a portfolio of properties and leases them to tenants. Its focus is on industrial properties in cities where there is a general lack of supply of new buildings, resulting in a high occupancy rate and pleasing rental trends. It's also benefiting from demand growth thanks to tailwinds such as e-commerce adoption.
As an REIT, it has already locked in what most of its income and expenditure is going to be for the year ahead, giving it predictable earnings. Indeed, the business has already provided guidance on what its rental earnings will be in FY26. Its forecasts for the year ahead are usually very accurate.
In FY25, it generated funds from operations (FFO – rental profit) per unit of 17.5 cents and paid a distribution per unit of 16.3 cents. In FY26, it's expecting to generate FFO per unit of between 18 cents and 18.5 cents, representing growth of up to 6%. The distribution guidance is 16.8 cents per unit, representing year-over-year growth of 3%. This projected growth is pleasing for a safer Australian stock.
The fund manager of the REIT, Grant Nichols, said at the time of the FY25 result:
Looking ahead, CIP is well positioned to take advantage of the positive outlook for Australian urban infill industrial real estate. Vacancy rates remain very low, while supply is very constrained – despite the strong rental growth we have seen during the past five years, market rents remain below the required economic rent for new development in virtually all markets. Coupled with the ongoing industry tailwinds, most notably population growth and increasing e-commerce adoption, the outlook for rental growth over the medium term is compelling.
APA Group (ASX: APA)
APA Group is another business that usually demonstrates pleasingly resilient earnings. It owns numerous energy assets, including a huge gas pipeline network, various other gas-related infrastructure, electricity transmission cables, wind farms, and solar farms.
Most of its revenue is linked to inflation, so it has a useful organic booster for revenue over time. It's also essential for the Australian economy – it carries around half of the nation's gas usage, so I'd describe it as a safer Australian stock. A lot of businesses and households need energy from somewhere.
The business grew its underlying operating profit (EBITDA) by 6.4% to $2.01 billion in FY25 following a 4.7% increase in revenue. In FY26, the business expects to grow its underlying EBITDA to between $2.12 billion and $2.2 billion, which means the business can increase its annual payout by 1.8% to 58 cents per security.
