Why I would invest $10,000 into these ASX 200 shares right now

A woman holds a lightbulb in one hand and a wad of cash in the otherA woman holds a lightbulb in one hand and a wad of cash in the other

If I were fortunate enough to have $10,000 sitting idle in a savings account, I would look to put it to work in the share market.

After all, even with rates rising, the potential returns on offer are vastly superior to the interest rates most bank accounts offer right now.

In addition to this, with the market down materially from its recent high, there are a lot of high-quality companies trading at discounted prices.

But which shares could be buys? Here are two ASX 200 shares I would invest my funds into:

Goodman Group (ASX: GMG)

The first ASX 200 share that I would buy with these funds is Goodman Group. It is an integrated commercial and industrial property company that owns, develops, and manages industrial real estate across 14 countries.

Demand has been incredibly strong for its properties, which has underpinned stellar rental income growth for over a decade. The good news is that this looks set to continue in the coming years. This is being underpinned by long-term demand for industrial space from increasing e-commerce penetration and supply chain modernisation and its development work in progress of $12.7 billion. The latter comprises 81 projects with a forecast yield on cost of 6.7%.

And while Goodman’s shares trade at a premium to other property companies, I believe this is justified due to its quality and positive growth outlook. For example, Goldman Sachs estimates that Goodman will grow its earnings per share (EPS) by an average of 13% per annum from FY 2022 to FY 2024. This is well ahead of industry averages.

TechnologyOne Ltd (ASX: TNE)

Another ASX 200 share that I would invest $10,000 into is TechnologyOne. It is an enterprise resource planning (ERP) software company servicing the government, financial services, health, education, and utilities and managed services markets.

TechnologyOne has been growing at a solid rate for more than two decades and I believe it is well placed to continue this trend in the coming years. This is thanks to its leadership position in key verticals, the stickiness of its products, and its recent shift to a software-as-a-service (SaaS) focused business model.

Management expects the latter to underpin very strong high margin, recurring revenue growth in the coming years. For example, TechnologyOne is targeting SaaS annual recurring revenue (ARR) of $500 million by FY 2026. This will be more than double the $192.3 million it recorded in FY 2021 and represents a five-year compound annual growth rate of 21%.

In light of this strong growth outlook, I believe its shares are attractively priced at 30x estimated FY 2023 earnings.

The post Why I would invest $10,000 into these ASX 200 shares right now appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/6kC0YU7

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s