The S&P/ASX 50 index is home to 50 of the highest quality and well-known companies in Australia.
While I wouldn’t necessarily be buying all the shares on the index, I think there are some quality options for investors to consider.
Three ASX 50 shares I would buy today are listed below:
a2 Milk Company Ltd (ASX: A2M)
The first ASX 50 share to consider buying is this infant formula and fresh milk company I think a2 Milk Company is a great option due to its very positive long term growth outlook. This is due to the expansion of its fresh milk footprint, potential earnings accretive acquisitions, and the increasing demand for its infant formula in China. In respect to the latter, although a2 Milk Company is generating significant sales in the China, it still only has a modest consumption market share of 6.6%. I believe this gives it a long runway for growth in the country over the next decade.
BHP Group Ltd (ASX: BHP)
Another ASX 50 share to consider buying is BHP. I believe the Big Australian is the highest quality option in the resources sector thanks to its diverse and world class operations. In addition to this, BHP is currently benefiting greatly from favourable commodity prices. This is especially the case with iron ore prices, which are still trading above US$100 a tonne. This is materially higher than its operating costs and means its iron ore operations are generating huge free cash flows. And with its balance sheet in a very strong position, the majority of this is likely to be returned to shareholders through dividends.
Goodman Group (ASX: GMG)
A final ASX 50 share to consider buying is Goodman Group. It is an integrated commercial and industrial property group with a high quality portfolio of assets. I think it is one of the best long term options on the index due to the positive outlooks of its assets. This is due to their exposure to structural tailwinds such as ecommerce. I expect these assets to be in demand with their blue chip tenants for many years to come, which should underpin solid income and distribution growth over the next decade.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- Where to invest $1,000 into ASX shares immediately
- Why this fundie sees an ASX bank share recovery
- Top ASX dividend shares to buy in July 2020
- Should you buy Fortescue shares at an all-time high?
- Why I would buy BHP and CBA shares for dividends
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why I would buy a2 Milk and these fantastic ASX 50 shares appeared first on Motley Fool Australia.
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