Earlier today, my colleague Lina Lim outlined 2 crazy cheap ASX 200 shares that are still in the buy zone. With the S&P/ASX 200 Index (ASX: XJO) rallying yet again today, it’s becoming harder and harder to sniff out such bargains. But luckily, I’ve found 2 more. 

With many effects of the coronavirus pandemic on our economy still unclear, ASX bargain hunting these days can be fraught, in my view. Usually, the few shares that are ‘cheap’ are priced that way for a good reason.

But here are the 2 ASX 200 shares I think are still cheap enough today to warrant some bargain buying and why.

BHP Group Ltd (ASX: BHP)

BHP is the ASX 200’s largest miner and a truly global player on the commodities scene. Just to be clear, BHP shares are not as cheap as they were even just a few weeks ago. In fact, the BHP share price has climbed 50% since the lows we saw in March.

But here’s why I’m thinking of ‘The Big Australian’ as cheap today. The price of iron ore (BHP’s largest moneymaker) has exploded in recent weeks, even rising above US$100 per tonne last week.

We have seen BHP’s fellow iron ore miner Fortescue Metals Group Limited (ASX: FMG) make new all-time highs, yet the BHP share price is still substantially below the highs we saw last year. As such, I think there is still plenty of room for BHP to run from here – and shower its shareholders with dividend income along the way.

Brickworks Limited (ASX: BKW)

Brickworks has been hit hard by the coronavirus-led crash we saw in March and has yet to approach its pre-crash highs of above $20 per share.

On one level, this is somewhat justified. Brickworks’ primary source of earnings comes from the construction sector, which is one of the most cyclical industries out there. But Brickworks isn’t just a brick company. It has a ‘side hustle’ of renting out some of its lands for rental income in a joint venture with ASX 200 cohort, Goodman Group (ASX: GMG). It also owns a large stake in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

As such, I think this company is cheap as chips today. Its stake in Soul Patts alone is worth approximately $1.9 billion, which is pretty good considering the whole company has a market capitalisation of $2.4 billion. Brickworks also has a stellar dividend history and hasn’t cut its payouts since the 1970s. As such, I think this company is a top ASX 200 buy today.

More reading

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• Does the ASX 200 just follow the US markets?

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company 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 Here are another 2 insanely cheap ASX 200 shares to buy right now appeared first on Motley Fool Australia.

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With interest rates at record lows and likely to remain there for some time to come, I continue to believe the share market is the best place to put your money.

But where should you invest your funds? Here are two top ASX 200 shares I would invest $5,000 into right now:

CSL Limited (ASX: CSL)

The first ASX 200 share to consider buying with $5,000 is this biotherapeutics company. I believe a recent pullback in its share price has created a buying opportunity for investors. Especially those that are interested in making a long term investment. This share price weakness has been driven by concerns over its plasma collections during the pandemic and the impact this might have on future immunoglobulin and albumin production.

While this is certainly a risk to consider, I’m optimistic that collections will accelerate once the crisis passes. Especially given the higher unemployment levels, which traditionally leads to higher donations. Another positive is that the pandemic is expected to lead to a sharp increase in demand for flu vaccines in the near term. This increase in demand could offset any weakness experienced with immunoglobulin and albumin sales in FY 2021. Outside this, I believe CSL’s pipeline of lucrative therapies have the potential to drive significant sales and profit growth over the next decade. Overall, I think this makes CSL one of the best buy and hold options on the ASX 200 today.

Xero Limited (ASX: XRO)

Another ASX 200 share to consider buying is cloud-based business and accounting software provider Xero. It has really caught the eye in recent years thanks to its stellar recurring revenue growth and the emergence of its operating leverage. This was on display for all to see in FY 2020 when Xero delivered a 29% lift in annualised monthly recurring revenue (AMRR) to NZ$820.6 million and a 52% increase in EBITDA to NZ$139.17 million.

The key drivers of this have been strong growth in subscription numbers, its high retention rate, and a modest increase in average revenue per user. In respect to the former, Xero added 467,000 net subscribers during the 12 months to finish the period at 2.285 million. And while this is a large number, the company estimates that less than 20% of the global English-speaking target market is using cloud-based accounting software at present. Given how superior this type of software is to Excel spreadsheets and notebooks, I expect more businesses to shift to the technology in the coming years. I believe this will support solid subscription and sales growth over the next decade.

More reading

• Is the CSL share price in the buy zone?
• 3 companies with great intangible asset moats
• Why CSL, Harvey Norman, IPH, & Saracen shares are charging higher
• 5 things to watch on the ASX 200 on Wednesday
• How to become a millionaire before your parents with ASX shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Xero. 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 Where to invest $5,000 into ASX 200 shares immediately appeared first on Motley Fool Australia.

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High yield ASX dividend shares could be the answer to boost your income.

But you need to be careful. If you go for shares that have unsustainably high dividend yields you could see a dividend cut in the future.

I think the below shares offer the right combination of high yield and potentially a bit of growth:

Rural Funds Group (ASX: RFF)

Rural Funds is one of my favourite high yield ASX dividend shares.

The farmland real estate investment trust (REIT) currently has a FY21 distribution yield of 5.6%. It aims to increase its distribution by 4% each year. I think that’s a solid growth rate with how little inflation there is these days.

Contracted rental indexation is a big factor in growing the rental profit and distribution. It is also investing in productivity improvements at its farms for its tenants, unlocking more rental income.

The long-term weighted average lease expiry (WALE) of more than 10 years gives good income visibility for the ASX dividend share.

Arena REIT No 1 (ASX: ARF)

Arena is another REIT that I’m a fan of. It invests in social infrastructure properties like early learning centres and healthcare buildings.

Some of its largest tenants, by rental income, are big childcare providers like Goodstart and G8 Education Ltd (ASX: GEM).

Arena REIT has been steadily been growing its distributions for several years. The ASX dividend share recently guided that the FY20 distribution would be 13.9 cents to 14 cents per unit. This equates to a FY20 distribution yield of at least 5.8%.

Medibank Private Limited (ASX: MPL)

Medibank isn’t normally a high yield ASX dividend share I’d go for. But I have to give credit to Medibank as a potential income option.

The private health insurer currently has a grossed-up dividend yield of 7.5%. That’s an attractively high yield for an ASX dividend share.

The company recently updated the market to say that it doesn’t really see much of a change to its FY20 guidance despite COVID-19. This should translate into solid earnings for FY20, which should mean Medibank has the ability to maintain its dividend.

There has been a recent agreement for public hospitals to stop charging patients as private patients if they have health insurance. This should be helpful for Medibank’s earnings.

I’m not sure about the long-term direction of Medibank’s policyholder numbers, but there doesn’t need to be much growth for Medibank to continue being a good ASX dividend share during this period. Its good balance sheet also helps the company remain robust.

Foolish takeaway

All three of these ASX dividend shares have attractively high yields. The RBA interest rate is now very low. Of the three options I’m probably most attracted to Rural Funds because it is least affected by what’s going on with COVID-19.

More reading

• Not keen on Westpac? Then buy these top ASX dividend shares instead
• NIB Holdings and 1 other ASX share which I would consider buying for growth and income
• 2 strong ASX dividend shares to bolster your income
• How to replace your entire wage with dividends
• 3 ASX dividend shares for retirees

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. 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.

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