When investors look at the ASX, it is not unusual to see very different types of companies sitting side by side. A defence technology specialist, a major bank, and a global mining giant can all appear attractive for completely different reasons.
So should you buy DroneShield Ltd (ASX: DRO), Westpac Banking Corp (ASX: WBC), and BHP Group Ltd (ASX: BHP) today?
Here is how I think about each one.
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DroneShield shares
DroneShield is the most speculative stock of the three, but also the one with potentially the most asymmetric upside.
The company operates in counter-drone technology, an area that has become increasingly important for defence, government, and the protection of critical infrastructure. As drones become cheaper, more capable, and more widely used, the need to detect and neutralise unauthorised drones continues to grow.
While its revenues are harder to predict due to the lumpy nature of its contracts, underlying demand drivers are structural rather than cyclical. I believe this means that the overall trajectory for revenue is up over the next decade.
For investors who can tolerate volatility and think long term, I believe DroneShield shares are a buy. However, this is with the understanding that patience will be required.
Westpac shares
Westpac is a very different proposition for investors.
As one of Australia's major banks, it offers scale, a strong deposit base, and a history of paying dividends. For income-focused investors, that alone can make its shares appealing.
However, Westpac's earnings growth has been more subdued than some of its peers, and its returns have been less consistent over time. While the bank is well capitalised and stable, it does not stand out as the most attractive opportunity in the sector right now.
For that reason, I would classify Westpac as a hold rather than a buy. It can continue to play a role in a diversified portfolio, but I would not be rushing to add to a position at current levels.
BHP shares
BHP sits at the opposite end of the spectrum to Westpac.
The company is a global resources leader with exposure to iron ore, copper, and other commodities that are central to long-term economic development. While commodity prices move in cycles, BHP's scale and asset quality allow it to generate strong cash flows through different conditions.
What makes BHP particularly attractive at the moment is its growing exposure to copper, which is increasingly important for electrification, infrastructure investment, and energy transition themes. That provides a longer-term growth angle alongside income.
On that basis, I see BHP shares as a buy for investors comfortable with commodity cycles.
Foolish takeaway
DroneShield, Westpac, and BHP each offer something different.
DroneShield provides exposure to a growing defence technology niche with higher risk and higher potential reward. BHP offers scale, income potential, and long-term relevance through its commodity exposure. Westpac, while stable, looks more like a hold than a buy at this point.
For me, DroneShield and BHP stand out as the more compelling options today, while Westpac is best approached with a more neutral stance.
