Not every well-known ASX share looks equally attractive to me right now.
Some have a clear path to stronger earnings over the coming years, while others face a more challenging environment.
With that in mind, here is how I would rate three popular ASX shares today.
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BHP Group Ltd (ASX: BHP)
BHP is a buy for me, largely because of how I expect its business to develop over the next decade.
The mining giant already has an enormous copper business, and I think that commodity could become an increasingly important source of earnings.
Demand for copper is expected to grow as countries invest in electricity networks, renewable energy, electric vehicles, and the infrastructure needed to support artificial intelligence (AI).
BHP is positioning itself for that demand through its existing operations and a pipeline of projects across several countries.
I also like that its iron ore business provides substantial cash flow to help fund those ambitions.
Iron ore prices will inevitably fluctuate, particularly given China's importance to the global steel market. But BHP's scale and low-cost operations put it in a strong position to navigate those cycles.
The development of its Jansen potash project in Canada should also provide another earnings stream as production ramps up.
For me, BHP offers an attractive combination of established operations, long-term growth opportunities, and the potential for healthy dividends.
Westpac Banking Corp (ASX: WBC)
Westpac is a hold in my view.
There is plenty to like about the bank. It has an established position in Australian mortgages and deposits, a large customer base, and the ability to generate substantial profits through different economic conditions.
It also remains an important dividend payer, which makes it a reasonable option for investors seeking income.
My hesitation comes from the outlook for growth. Higher interest rates can support banking margins, but they also place greater pressure on borrowers and reduce demand for new loans.
With Australia's housing market facing a more difficult period, I think Westpac could find it challenging to deliver particularly strong earnings growth.
There is also competition to consider. Banks are constantly competing for mortgage customers and deposits, which can limit how much benefit they receive from higher rates.
None of this makes Westpac a poor business. If I already owned the shares, I would be comfortable continuing to collect the dividends and giving management time to deliver.
But for fresh investment, I think there are more compelling opportunities elsewhere on the ASX.
Zip Co Ltd (ASX: ZIP)
Zip is my second buy, although it comes with considerably more risk than BHP shares.
The buy now, pay later company has spent recent years improving its financial position and building a platform for more profitable growth.
I think the opportunity in the United States is particularly exciting. There is still room for Zip to expand its merchant relationships, attract more customers, and capture a larger share of consumer spending.
As transaction volumes increase, the company has an opportunity to spread its operating costs across a larger business. I think that could translate into strong earnings growth over the coming years.
But I would be watching credit quality closely. Zip needs to demonstrate that it can continue to grow without taking on excessive lending risk, particularly as higher interest rates put pressure on household finances.
If management continues balancing growth with disciplined lending, I think the company could become substantially more profitable by the end of the decade.
And with the shares still trading well below their previous highs, I believe there could be significant upside if that happens.
Foolish takeaway
BHP and Zip would both be on my buy list today, although for quite different reasons.
BHP offers exposure to long-term commodity demand, while Zip has the potential to deliver much faster earnings growth.
Westpac remains a solid business, but I would be happy holding rather than buying at this stage.
