Why I’d buy these 2 ASX 200 shares

There are a number of quality S&P/ASX 200 Index (ASX: XJO) shares that this writer thinks are worthwhile buys right now, particularly during this volatility.

In my opinion, it’s times of market declines that can end up being the most attractive time to buy because of the lower prices.

Who knows how long these prices will stay where they are? They could go lower, or higher, from here.

But, at the current levels, I think these two ASX 200 shares look like good options.

Goodman Group (ASX: GMG)

Goodman is one of the largest property businesses on the ASX. This ASX 200 share is a major developer, owner, and operator of industrial properties around the world.

The company is benefitting from the high level of demand for logistics and e-commerce properties. That’s why it’s working on such a large pipeline of potential opportunities. As at 31 March 2022, Goodman had $13.4 billion of development work in progress across 89 projects.

The customer demand is also helping the rental profit for the business. In the latest quarter it reported 3.7% like for like net property income (NPI) growth in its managed partnerships. As well as attractive rental income growth, it also has a high occupancy rate of 98.7% across its partnerships.

In a rising interest environment, I think it’s good that Goodman has a low level of debt. At 31 December 2021 its gearing was 7.2%, and it has over $2 billion of liquidity.

The ongoing work on projects and valuation gains of existing properties has helped its total assets under management (AUM) reach $68.7 billion. The company expects this to rise to above $70 billion by 30 June 2022.

The ASX 200 share is expecting to achieve FY22 operating earnings per security (EPS) growth of 23%.

I think the Goodman share price looks attractive after its 26% fall in 2022.

BHP Group Ltd (ASX: BHP)

I think that BHP is one of the highest-quality resource businesses on the ASX.

The diversified nature of BHP’s portfolio of commodities is attractive to me. In the near future, it will divest its petroleum business to Woodside Energy Group Ltd (ASX: WDS). It will be left with the following commodities: iron, metallurgical (steel-making) coal, copper, nickel and potash.

I’m particularly excited by the company’s plans for potash, which is a type of fertiliser. It’s an attractive growth area because it’s seen as “low emission, biosphere friendly and positively leveraged to decarbonisation”.

BHP says that strong fundamentals and a mature existing asset base offer an attractive entry opportunity with its Jansen potash asset in Canada.

The ASX 200 mining share says it will be able to achieve large-scale production at low cost, leading to an attractive profit margin with the commodity.

I think that BHP can continue to benefit from good commodity prices, leading to strong cash flow, which can mean juicy dividends.

As BHP becomes focused on greener commodities, like copper and potash, I think it will become more attractive to ESG-focused investors.

The post Why I’d buy these 2 ASX 200 shares appeared first on The Motley Fool Australia.

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• Top broker gives its verdict on the BHP share price post-demerger
• What’s the outlook for ASX 200 dividend shares in the second half of 2022?

Motley Fool contributor Tristan Harrison 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.

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