ASX 200 energy shares have been hit hard in 2020. First, there were concerns surrounding coronavirus which sent the S&P/ASX 200 Index (ASX: XJO) tumbling lower in late February. Then came an oil price war between Saudi Arabia and Russia which spooked investors even more and eventually sent the oil price into negative territory last month.

You might be looking at the markets and thinking now is not a good time to buy ASX 200 energy shares. However, I think it could be quite the opposite. Here are a couple of my top picks for energy companies that could be in the buy zone in 2020.

2 ASX 200 energy shares to buy today

I like the prospects for AGL Energy Limited (ASX: AGL) shares. AGL is one of the largest energy producers in Australia and I believe it’s in a strong competitive position.

The Aussie electricity market is largely dominated by AGL, EnergyAustralia and Origin Energy Ltd (ASX: ORG). The AGL share price has plummeted 21.28% lower this year but I feel it may have been oversold.

Sure, the oil price war has hurt most ASX 200 energy shares. However, east coast electricity prices remain high, despite the ACCC recommending further intervention. These ongoing high prices could help stabilise FY20 earnings despite potentially lower volumes.

Another issue affecting the sector is less commercial energy use. COVID-19 restrictions have forced many employers towards a remote working model which means less energy consumption by businesses in our cities. However, this also means higher residential energy use which could help to balance things out for AGL.

Aside from AGL, I also like the look of Origin Energy. Given what’s happening to oil prices and the supply-demand dynamics, I think investing in the ASX 200 oil producers is a risky bet. There’s a lot of uncertainty surrounding oil and, as such, I feel Aussie utility companies could be a better option right now. As a long-term investor, I’m happy to trade some potential upside for the defensive qualities I see in energy ‘gentailers’ like AGL and Origin.

I think Origin is in a similar position to AGL right now. Given we’re investing for the long-term, I also think both AGL and Origin could benefit from an increase in renewable energy investment. That means, moving forward, AGL and Origin could tick all the boxes as strong dividend shares with solid medium and long-term outlooks.

Foolish takeaway

Investing in ASX 200 energy shares is certainly not for everyone. Diversification is key, which means that AGL and/or Origin shares could form part of your broader portfolio construction. I would say it’s still a relatively speculative play right now which means I wouldn’t be going all in. However, I do feel there are long-term rewards on offer for investors willing to roll the dice with ASX 200 energy shares in 2020.

More reading

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Got $2,000? Here are 2 ASX 200 energy shares to buy today appeared first on Motley Fool Australia.

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The head of research services at broker Bell Potter recently released 10 ASX 200 shares that analysts tip for a post-coronavirus recovery. All the stocks mentioned have a market capitalisation of more than $1 billion and boast strong balance sheets that could see them recover from the pandemic.  

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat is a gambling machine manufacturer that has a strong recurring revenue stream from leasing machines to its customers. The company also makes revenue through outright sales of gaming machines and monetisation of online casinos and gaming.

Analysts are optimistic on the medium-term growth of Aristocrat’s land-based operations, with the company having a strong presence in the US gaming industry. In addition, the company’s online operations are a growing market that provides Aristocrat with flexibility during the pandemic.

ANZ Banking Group (ASX: ANZ)

Analysts expect that economic growth post-pandemic should provide ANZ with a solid lift in profitability. The bank is currently providing financial assistance packages for its small business and retail customers.

BHP Group Ltd (ASX: BHP)

BHP boasts a strong balance sheet and low-cost operations with earnings coming from iron ore, copper and coal. Analysts are optimistic that BHP is well positioned during the pandemic, with improving commodity prices expected to benefit the company in the future.

Flight Centre Travel Group Ltd (ASX: FLT)

The pandemic has created an unprecedented challenge for travel and leisure companies like Flight Centre. The company has completed a $700 million equity raising and reduced its annualised operating expenses by $1.9 billion. As a result, analysts estimate that the company can survive for 15 months without revenue and post a recovery following the pandemic.  

Macquarie Group Ltd (ASX: MQG)

Analysts are also optimistic on Macquarie Group to recover strongly post-pandemic. The investment bank has the ability to switch between market-facing and annuity-style operations, which makes it an attractive investment during and after the coronavirus pandemic.

Mirvac Group (ASX: MGR)

Mirvac owns and operates a commercial property portfolio that is exposed to office, retail and industrial properties, which account for 59% of group earnings. The coronavirus pandemic is expected to impact retail and other commercial rental incomes for the next 2 years. Despite this, analysts believe that Mirvac will recover post-pandemic with a secure income stream.

Origin Energy Limited (ASX: ORG)

Origin’s 2 main areas of operation are the energy markets and integrated gas, which contribute 44% and 56%, respectively, to group earnings. The energy market is expected to recover post-pandemic and analysts are optimistic that Origin energy will see a strong resurgence in energy and fuel demand.

Premier Investments Limited (ASX: PMV)

Premier Investments is the owner of prominent retail brands such as Smiggle, Peter Alexander and Just Jeans. Despite the pandemic causing havoc among retailers, Premier Investments is tipped to recover strongly. Analysts cited the company’s stance to pay adjusted rent and strong retail presence as factors that will help Premier Investments emerge stronger, post-pandemic.

Qantas Airways Limited (ASX: QAN)

With the pandemic bringing domestic and international travel to a grinding halt, airlines like Qantas have been some of the most adversely impacted companies. Despite the toll the pandemic has had on the company, analysts think that Qantas could see a protracted recovery. Analysts believe that Qantas can survive for up to 12 months with cost reductions and available liquidity of $4 billion.

Worley Ltd (ASX: WOR)

Worley is a global provider of engineering and project management services for the energy, chemicals and resource sectors. The pandemic has presented the company with a challenging operating environment, especially given the collapse in oil price. Analysts believe that the company will recover post-pandemic as activity levels improve.

Foolish takeaway

In my opinion, Bell Potter provides high quality research and analysis, However, just because analysts think these shares could recover doesn’t mean that investors should jump the gun and start buying. As we have seen, the coronavirus pandemic is an evolving situation and nothing is certain.

I think a prudent strategy would be to compile your own watchlist of champion stocks and wait for positive price action before making an investment decision.

More reading

• Got $2,000? Here are 2 ASX 200 energy shares to buy today
• 4 top ASX 200 shares for blue chip investors
• Got $5,000 to spend? Here are 5 ASX shares you can buy today
• Goldman Sachs names 5 reasons iron ore prices won’t crash
• Looking for dividend income? Try these 3 ASX shares

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Premier Investments Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. 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 Broker tips 10 ASX 200 shares for a post-coronavirus recovery appeared first on Motley Fool Australia.

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Some ASX shares can provide a good mixture of growth and income for your portfolio.

In this era of ultra-low interest rates it’s hard to find good sources of income. And with the coronavirus there are few shares that cab provide good growth right now.

Here are three ideas to consider:

Ansell Limited (ASX: ANN)

Ansell is one of the businesses involved in fighting the spread of the coronavirus. It makes a number of products like gloves, masks and protective suits.

However, despite the coronavirus impacts, the company recently reaffirmed its FY20 guidance for earnings per share (EPS) to be in a range of US$1.12 to US$1.22.

Even before the coronavirus Ansell was predicting solid mid-single digit growth so I think that Ansell is well placed to grow whatever happens next. I think it’s a good, defensive ASX share to provide growth and income.

In terms of dividend income it has a trailing dividend yield of 2.3%.

Magellan Global Trust (ASX: MGG)

Magellan Global Trust is a listed investment trust (LIT) which invests in some of the best shares in the world. You get indirect exposure to shares you just don’t find on the ASX. Some examples are Microsoft, Alphabet, Visa, Mastercard, Tencent, Alibaba and Facebook.

Many of its holdings are quality growth shares with great balance sheets. If you owned them yourself you wouldn’t get much income. But Magellan Global Trust can target a 4% distribution yield by paying out a portion of the long-term capital growth each year.

As the net asset value (NAV) of Magellan Global Trust grows, the distribution will rise over time with it. This is an attractive combination of growth and income from an ASX share.

Kogan.com Ltd (ASX: KGN)

Kogan.com is an online retailer that also has a third party marketplace. It also distributes cheap services like telecommunications, superannuation, insurance and so on.

With everyone limiting their exposure to the outside world it’s eCommerce businesses like Kogan.com that are getting a lot of the pent up demand. In April 2020 Kogan.com saw revenue growth of over 100%. ‘Adjusted’ earnings before interest, tax, depreciation and amortisation (EBITDA) grew over 200%.

It also announced this morning that it has acquired Matt Blatt, a furniture and homewares retailer which generated around 20% to 25% of its $46.5 million revenue online in FY19. It will be an online only retailer under Kogan.com’s leadership.

Kogan.com has grown its dividend each year over the past few years and currently has a grossed-up dividend yield of 2.6%.

Are all of these ASX shares buys for income and growth?

Kogan.com and Ansell have both performed strongly after the initial market selloff as investors realised the strength of those businesses. I don’t think they’re not cheap any more. But my ASX share pick for income and growth is Magellan Global Trust – it’s diversified, has the biggest yield and gives exposure to many of the best businesses in the world.

More reading

• Kogan.com share price on watch following acquisition news
• ASX small-cap sector rallies strongly during April
• These ASX shares are set to dominate the post-COVID-19 economy
• This ASX growth share has rocketed 150% higher since March. Is it too late to invest?
• With Aussie wages set to fall, could ASX 200 shares follow?

Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Ansell Ltd. 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 3 ASX shares to buy for growth and income appeared first on Motley Fool Australia.

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