Are these 2 leading ASX 200 shares worth owning?

ASX 200 shares broker downgrade origami paper fortune teller with buy hold sell and dollar sign options

There are some market leaders of industry within the S&P/ASX 200 Index (ASX: XJO). The ASX 200 shares in this article could be compelling ideas to think about.

Businesses that have strong competitive positions may be good ideas to think about for an investor’s portfolio.

Companies can continually improve their business if they keep investing and focusing on their strengths.

Could these two top ASX 200 shares be worth owning?

JB Hi-Fi Limited (ASX: JBH)

This company is made up of three operating businesses – JB Hi-Fi Australia, The Good Guys and JB Hi-Fi New Zealand.

It sells a wide array of electronics like computers, phones, TVs, as well as other home items like fridges, cooking appliances, air conditioning and so on. Many of the products it sells are integral parts of our homes and lives.

JB Hi-Fi says that its group model is underpinned by five unique competitive advantages – scale, a low cost operating model, quality store locations, supplier partnerships and multichannel capability. Another aspect of its success is that its stores are very effective, with a high level of sales per square metre.

FY21 saw the ASX 200 share’s profitability significantly increase. Whilst total sales went up 12.6% to $8.9 billion, net profit after tax (NPAT) soared 67.4% to $506.1 million.

Analysts were impressed by the FY22 first quarter sales update. Despite restrictions, lockdowns and so on, JB Hi-Fi Australia sales only fell 7.5%, JB Hi-Fi New Zealand sales dropped 6.4% and The Good Guys sales dropped 5.6% in the first three months.

JB Hi-Fi also said that in October, the group had seen sales momentum continue and has benefited from the reopening of stores in NSW and changes to the timing of key product releases compared to prior years.

Credit Suisse rates JB Hi-Fi as a buy, with a price target of $55.86 and thinks it has a very strong position in the retail world.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is one of the oldest ASX 200 shares. It was listed over a century ago.

It has built an investment portfolio of different businesses in different sectors.

Soul Patts is in telecommunications with TPG Telecom Ltd (ASX: TPG) and Tuas Ltd (ASX: TUA), resources with substantial investments in New Hope Corporation Limited (ASX: NHC) and Round Oak, agriculture, property and so on. Brickworks Limited (ASX: BKW) is another major position. Soul Patts also has a large cap ASX share portfolio and a small cap ASX share portfolio.

This business has grown its dividend every year for the last two decades. It has achieved this by having a range of asset classes, with mostly defensive and contrarian investments that it picks for the long-term. The reliable cashflow it generates both funds the growing dividend and can be re-invested into more opportunities.

A recent merger with the listed investment company (LIC) Milton will allow the ASX 200 share to jump on investment opportunities in a number of different target asset classes and thematics. It’s looking at private equity, structured high yield, emerging companies, global equities, ‘real’ assets, property, health and ageing, energy transition, agriculture, financial services and education.

Whilst the Soul Patts share price has a 15% upside to the Morgans price target of $36.78, it’s only rated as a hold at the moment by that broker.

The post Are these 2 leading ASX 200 shares worth owning? appeared first on The Motley Fool Australia.

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Before you consider JB Hi-Fi, you’ll want to hear this.

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More reading

Motley Fool contributor Tristan Harrison owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Brickworks. The Motley Fool Australia owns and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia

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