The Vanguard Diversified High Growth Index ETF (ASX: VDHG) is a popular exchange-traded fund (ETF) for the diversification that it offers. Is it the only investment we need?

Vanguard is one of the world leaders at providing extremely low-cost investment options. The owners of Vanguard are the investors themselves – it shares the profit by making the investment funds as cheap as possible.

While Vanguard offers numerous index funds, the VDHG ETF is a bit different. It’s invested across a number of funds, with a preference for growth-focused assets (shares) over defensive assets (bonds). There are a number of reasons to like it.

Extremely diversified

The VDHG ETF is invested across seven different funds. At the end of January 2023, these were the weightings for the growth funds:

Vanguard Australian Shares Index Fund (wholesale) (36.3%)

Vanguard International Shares Index Fund (wholesale) (26.6%)

Vanguard International Shares Index Fund (hedged) – AUD class (16.1%)

Vanguard International Small Companies Index Fund (wholesale) (6.4%)

Vanguard Emerging Markets Shares Index Fund (wholesale) (4.6%)

It’s also invested in two bond funds, those allocations are:

Vanguard Global Aggregate Bond Index Fund (hedged) (7%)

Vanguard Australian Fixed Interest Index Fund (wholesale) (3%)

If we were to look at all of the underlying businesses that the VDHG ETF is invested in, it would be a four-figure number, meaning in the thousands. That’s excellent diversification.

The addition of the bonds can provide the portfolio with some stability during global share market volatility.

Low fees

The VDHG ETF has very low costs considering how diversified it is. The lower the costs, the more the investment returns stay with the investor. This investment option has an annual fee of 0.27%.

Active fund managers typically charge at least 1% and sometimes outperformance fees as well. Fees can make a difference to our wealth to the tune of tens of thousands of dollars over 30 or 40 years.

Decent returns

Over the five years to January 2024, the VDHG ETF has made an average return per annum of 9.6%.

If someone invested $1,000, it would double to more than $2,000 in around eight years growing at that rate.

Of course, past performance is not a reliable indicator of future returns. The VDHG ETF could deliver better returns in the next five years (or it could do worse).

I think investing in shares gives it a good chance of returns over the long term, though that can come with more volatility.

Why I wouldn’t make it my only investment

I like the concept of the VDHG ETF, and it can make things very simple for some investors.

However, if I’m going to invest in an ETF for the purpose of gaining exposure to shares, it may as well have 100% exposure to shares. In my mind, the bond returns are likely to drag on the VDHG ETF’s return because they lack the potential to deliver strong capital growth.

It also has a very large allocation to the ASX share market, when the ASX only accounts for 2% of the global share market. I’d prefer a bigger allocation to global winners like Microsoft and Alphabet than what the VDHG ETF provides. I like Vanguard MSCI Index International Shares ETF (ASX: VGS), as an example that’s purely about shares.

The post Is Vanguard Diversified High Growth Index ETF (VDHG) the only investment you need? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet and Vanguard Msci Index International Shares ETF. 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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The S&P/ASX 200 Index (ASX: XJO) might have risen four months straight, but many experts are still bullish about the rest of 2024.

Shaw and Partners portfolio manager James Gerrish said in his newsletter that his team is “bullish equities through 2024/5”.

“The ASX is stronger than many probably give it credit for. 

“If/when the resources sector enjoys a bid, the ASX 200 will be knocking on the 8000 door. e.g. The index’s largest stock, BHP Group Ltd (ASX: BHP), is still trading over 13% below its 2024 high.”

So in this upbeat environment, which Australian shares are best set to elevate to the next level?

Here are four to consider:

When mining rises, so does this stock

Mader Group Ltd (ASX: MAD) is a maintenance contractor for clients in the mining industry.

Like Gerrish mentioned, the resources sector is in a low part of its cycle at the moment, so Mader shares are also down about 19% since September.

The stock even plunged after quarterly results that didn’t look that bad in January.

But that gives it a low base off which to jump in 2024.

This theory will apply especially if western economies start recovering as a result of interest rate relief, and China begins stimulus to fight deflation.

All five experts surveyed on broking platform CMC Invest reckon Mader Group is a buy.

Shrug off the short sellers

A short seller attack on Neuren Pharmaceuticals Ltd (ASX: NEU) has seen its share price plummet almost 21% so far this year.

Analysts at Elvest Fund, which holds the stock, explained it best in a memo to clients.

“A short report targeting Neuren’s US partner, Acadia Pharmaceuticals Inc (NASDAQ: ACAD), combined with unexpected holiday-period seasonality in sales for its flagship drug, Daybue, shook investor confidence.”

But investors with years to invest need not worry.

“Our thesis for Neuren Pharmaceuticals is unchanged. New CY24 Daybue sales guidance of US$370 to US$420 million (+120%) underpins another solid year of royalty and milestone revenue for NEU. 

“This will aid commercialisation of its exciting pipeline drug, NNZ-2591, which has the potential to grow Neuren’s addressable market five-fold in the coming years.”

These Aussie shares have been unstoppable

The resurgence of MMA Offshore Ltd (ASX: MRM) shares has been simply stunning.

Check out these figures: up 76% over the past 12 months, up 477% since the start of 2022, up 754% since September 2020.

It seems the marine services provider is supplying its clients with indispensable offerings, if the latest reporting season is anything to go by.

“The marine services provider reported a massive 339% jump in underlying net profit after tax (NPAT) to $39.5 million in 1H FY24,” reported The Motley Fool’s Bronwyn Allen.

“The company said there was stronger demand for its vessels and services.”

Tellingly, all five professional investors surveyed on CMC Invest rate the stock as a strong buy.

‘Double or triple the existing footprint’

Lovisa Holdings Ltd (ASX: LOV) is already on fire this year, enjoying a 24% increase in its stock price.

Elvest analysts loved the half-year report.

“EBIT [was] up 16% to $82 million, in part driven by a near record gross profit margin of 80.7%. Recent like-for-like sales turned positive, which bodes well for second half earnings.”

But I think it can reach even higher, with the business expanding rapidly around the world.

The Elvest team agrees with this thesis.

“Looking beyond FY24, we remain excited about the company’s aggressive global store roll[out] program, which could ultimately double or triple the existing footprint of 860 stores across over 40 markets.”

The post 4 Australian shares set to soar in 2024 appeared first on The Motley Fool Australia.

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• Key takeouts for ASX shares this earnings season: CBA analysis
• Why is the Lovisa share price sinking today?
• Leading brokers name 3 ASX shares to buy today
• Which ASX shares delivered the biggest profit jumps of the earnings season?

Motley Fool contributor Tony Yoo has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa and Mader Group. The Motley Fool Australia has positions in and has recommended Mader Group. The Motley Fool Australia has recommended Lovisa and Mma Offshore. 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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The good news for growth investors is that there are plenty of quality options to choose from on the Australian share market.

But which ones could be best buys in March?

Let’s take a look at three ASX growth stocks that brokers rate very highly:

IPD Group Ltd (ASX: IPG)

Bell Potter is a big fan of this distributor of electrical equipment and industrial digital technologies and sees it as an ASX growth stock to buy in March. It has the company on its preferred list with a buy rating and $5.90 price target.

Its analysts expect the company to benefit from the electrification megatrend. It said:

We view IPG as a high quality play on the electrification growth trend which is emerging as a dominant market narrative.

Treasury Wine Estates Ltd (ASX: TWE)

The team at Morgans thinks that Treasury Wine could be an ASX growth stock to buy right now. It has it on its best ideas list with an add rating and $14.03 price target on its shares.

The broker is feeling very positive about its recent acquisition of DAOU Vineyards (DAOU) for US$900 million (A$1.4 billion). It said:

While not without risk given the size of this transaction, if TWE delivers on its investment case, there is material upside to our valuation. The key near-term share price catalyst is if China removes the tariffs on Australian wine imports.

Xero Ltd (ASX: XRO)

Goldman Sachs added this cloud accounting platform provider’s shares to its Asia-Pacific conviction list this month. The broker has a buy rating and $152.00 price target on its shares.

Its analyst “is positive on the company’s outlook given accelerating product pipeline and strong management team to capture overseas market share while balancing profitability.”

The post Best ASX growth stocks to consider buying in March appeared first on The Motley Fool Australia.

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• 2 ASX 200 dividend shares that could be strong buys this month
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• Here’s how the ASX 200 market sectors stacked up this week
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Ipd Group, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Ipd Group and Treasury Wine Estates. 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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When some punters see the words “52-week high” they immediately think it’s too late to buy the stock.

But this is absolutely false logic. Shares don’t care about the past. Only the future outlook is what matters.

If anything, S&P/ASX 200 Index (ASX: XJO) stocks hitting new peaks have momentum from investors who obviously like what the business has to offer.

And the ultimate aim of the game is to own shares that other people want.

So in this spirit, Shaw and Partners portfolio manager James Gerrish recently named two stocks that his team are bullish on that have been smashing year-long records:

Turning the tables on foreign takeovers

Poker machine maker Aristocrat Leisure Limited (ASX: ALL) has gained more than 14% so far this year to not only make 52-week highs but is nearing its all-time peak.

“Following its report last November, this gaming company doesn’t confess its sins until May, but the markets are clearly voting with both feet that the news will be good,” Gerrish said in his Market Matters newsletter.

“Their FY23 results were solid, with revenue up 13% to $6.3 billion and segment [EBITDA] up 4% to $2,750 million, at the time both slightly ahead of expectations.”

Gerrish’s team is backing the ASX 200 stock to keep heading upwards in the medium term.

“We think Aristocrat can continue to grow earnings at mid-single digits, amplified by share buybacks (i.e. fewer shares on issue) while enjoying a net cash position, even after completing the $1.5 billion acquisition of Nasdaq-listed gaming software giant NeoGame SA (NASDAQ: NGMS).”

The move is an attempt to expand into US online lotteries, which is turning the tables on what usually happens with mergers and acquisitions.

“A pleasant change to see an ASX company ‘shopping’ overseas.”

‘Buy the dip until further notice’ on this ASX 200 stock

A poster example of how past performance has nothing to do with future is Audinate Group Ltd (ASX: AD8).

The share price for the audio networking technology provider has now rocketed 153% over the past year, but it remains a buy for many professionals.

This includes Gerrish’s team, which has ridden the rollercoaster all the way up.

“We are not planning on taking profit on Audinate, even though a 160% paper gain is eye-catching.”

The ASX 200 shares have been driven to all-time highs after last month’s half-year results labelled as “very strong” by Gerrish.

“Revenue grew 48% to US$30.4 million, with EBITDA US$10.1 million being a whopping ~70% ahead of expectations driven by strong revenues, plus margins improved ahead of consensus.

“While the first half was strong, the company left guidance unchanged, but the market thoroughly embraced the results.”

There could be some exciting corporate developments coming.

“They are looking at M&A opportunities with a strong cash balance of $117 million, which supports our view that this is a business going places.

“We can see a period of consolidation on the horizon, but we believe Audinate is a case of ‘buy the dip’ until further notice.”

The post 2 ASX 200 shares smashing 52-week highs that are STILL BUYS appeared first on The Motley Fool Australia.

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• Guess which 4 shares are being dumped from the ASX 200 index
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• Why Audinate, Beach Energy, Calix, and JB Hi-Fi shares are charging higher

Motley Fool contributor Tony Yoo has positions in Audinate Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Audinate Group. The Motley Fool Australia has positions in and has recommended Audinate Group. 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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No one buys ASX shares with the intention of losing money.

Yet it is the harsh reality that many of your investments will end up doing just that. 

It’s inevitable regardless of your experience or knowledge. It’s just what happens because no one in the world owns a working crystal ball.

But the great news is that with thorough research and diversification, a few — or even just one or two — massive winners can carry your entire portfolio into the black.

Let’s examine one such small-cap example that’s put a smile on many faces recently:

The ASX tech stock putting smiles on dials

DUG Technology Ltd (ASX: DUG) is a high-performance computing specialist in the technology sector.

Back just 20 months ago, in June 2022, the DUG share price hit the 40 cent mark.

Imagine that you were wise enough to buy $20,000 of the tech stock then.

DUG Technology, ever since listing on the ASX in August 2020, has consistently grown its revenue, operating margin and net profit since.

Combine this with a general revival in high-growth tech stocks in 2023, and you have yourself a prodigious winner.

That $20,000 would have now turned into $124,500.

This is why you don’t need every stock to be a winner

So to what extent could such an explosive stock wipe out the effects of other stocks in your portfolio that haven’t done as well?

Let’s go back to June 2022.

At the time you were buying DUG shares, let’s say you also bought up four other stocks for $20,000 each in order to construct a diversified portfolio.

As I mentioned earlier, no one buys stocks thinking they will sink. 

You bought all five companies because you deemed them to be quality businesses with bullish prospects.

However, let’s assume the other four picks other than DUG Technology flopped.

Take it to the extreme and say they’re now all worth $0.

Even then, thanks to DUG shares, your portfolio is now 30% up.

There’s the power of diversification, and a lesson that not every stock pick has to be a winner for you to build your wealth.

The post If you’d put $20,000 in this ASX tech stock 20 months ago, you’d have $125,000 now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Dug Technology. The Motley Fool Australia has recommended Dug Technology. 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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The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Newmont. 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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The Brickworks Limited (ASX: BKW) share price reset its all-time record high again on Tuesday.

Brickworks shares hit a new peak of $30.35 in intraday trading, up 1.2% on yesterday’s closing price.

The Brickworks share price finished the session at $30.27 on Tuesday, up 0.93%.

The building materials stock has been on a run lately, despite no news out of the company in 2024 as yet.

However, Brickworks is due to report its 1H FY24 earnings on 21 March, so watch this space.

In the meantime…

Why is the Brickworks share price at a record high?

The outlook on housing is positive, and this has lifted the share prices of many building materials stocks.

Over the past three months:

• The Brickworks share price is up by almost 20%
• The CSR Ltd (ASX: CSR) share price is up by almost 50%
• The Boral Ltd (ASX: BLD) share price is up by almost 25%
• The Adbri Ltd (ASX: ABC) share price is up by almost 50%
• The James Hardie Industries plc (ASX: JHX) share price is up by almost 25%
• The Reece Ltd (ASX: REH) share price is up by almost 45%

The Australian building industry had a very tough time after the world came out of COVID lockdowns.

New home approvals initially rebounded strongly, but then came a major disruption to global supply chains, significant inflation worldwide, and relentlessly rising interest rates.

In Australia, shipping costs went up, the price of materials went up, and building projects were delayed due to a lack of skilled labour.

Many small builders went under because they couldn’t afford to complete fixed-price projects amid rapidly rising costs.

Project delays and rising costs led to less demand for new homes, as shown below.

Source: Australian Bureau of Statistics

Things are settling down now.

Interest rates are likely to decrease soon, and there is plenty of building work in the pipeline as the world tries to catch up on pent-up demand for new housing and other infrastructure.

This means there is likely to be a strong demand for building materials over the next few years.

Investors are picking up on this and buying ASX shares with exposure to this trend, like Brickworks shares.

Overseas buyers snapping up ASX building materials companies

Three ASX building materials companies are currently under takeover, indicating confidence in the building sector at a global scale.

The prospective buyers of these ASX companies are offering a premium to shareholders, too.

CSR has entered into a binding scheme implementation deed with the French building giant Saint-Gobain (LSE: COD), which is offering a 33% premium.

Adbri has done the same with Irish supplier CRH PLC, which is offering a 41% premium.

Boral has received a takeover offer from major shareholder Seven Group Holdings Ltd (ASX: SVW).

Subject to conditions, Seven’s offer of up to $6.25 per share represents a near-7% premium on the closing Boral share price the day before the announcement.

The post Why did the Brickworks share price just smash another record? appeared first on The Motley Fool Australia.

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• Seeking retirement income from ASX bank shares at 52-week highs? What I’d buy instead
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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. 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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If you’re on the lookout for above-average dividend yields, then look no further.

Listed below are two ASX 200 dividend shares that have been named as buys and tipped to offer generous yields.

Here’s what you need to know:

QBE Insurance Group Ltd (ASX: QBE)

Goldman Sachs is a big fan of QBE and sees it as an ASX 200 dividend share to buy now.

QBE was formed in Townsville back in 1886 and is now an international insurer and reinsurer with a local presence in 27 countries.

Clearly, QBE has been through many cycles during its time. And right now, Goldman Sachs thinks the company is going through a very positive point in its current cycle thanks to premium increases.

It expects this to support the payment of dividends per share of 62 US cents in FY 2024 and 61 US cents in FY 2025. This equates to dividend yields of 5.5% and 5.45%, respectively.

The broker also sees room for its shares to continue climbing. It has a buy rating and $18.52 price target on them.

Transurban Group (ASX: TCL)

Another ASX 200 dividend share that could be a buy this month is toll road operator Transurban.

It operates 22 roads in Australia and North America, including CityLink, Cross City Tunnel, and the East Distributor. It also has four projects currently in development or delivery.

Due to population growth and urbanisation, Transurban has been tipped to continue its growth long into the future.

The team at Citi expects this to underpin the payment of dividends per share of 63 cents in FY 2024, 65 cents in FY 2025, and 68 cents in FY 2026. Based on the current Transurban share price of $13.36, this will mean yields of 4.7%, 4.85%, and 5.1%, respectively.

Citi has a buy rating and $15.60 price target on its shares.

The post 2 ASX 200 dividend shares that could be strong buys this month appeared first on The Motley Fool Australia.

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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 positions in and has recommended Goldman Sachs Group and Transurban Group. 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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Last week, we covered several ASX exchange-traded funds (ETFs) that had just hit fresh new all-time highs. Well, ETFs are back at it again today, with another round of record-breaking gains.

The four ETFs we covered last week were as follows:

• iShares S&P 500 ETF (ASX: IVV)
• Vanguard US Total Market Shares Index ETF (ASX: VTS)
• VanEck Morningstar Wide Moat ETF (ASX: MOAT)
• BetaShares Crypto Innovators ETF (ASX: CRYP)

This Tuesday, two of those four ETFs have clocked even higher record highs. Those are the VanEck Wide Moat ETF, which hit $127.42 this afternoon. As well as the iShares S&P 500 ETF, which reached up to $52.59 a unit soon after.

These two funds have also been joined in the ‘all-time high club’ today by:

• VanEck Gold Bullion ETF (ASX: NUGG) at a new high of $32.41 per unit
• Global X Seminconductor ETF (ASX: SEMI) at $17.18
• BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) at $14.90
• iShares Global Healthcare ETF (ASX: IXJ) at $140.60
• iShares MSCI Japan ETF (ASX: IJP) at $108.25
• Vanguard MSCI Index International Shares ETF (ASX: VGS) at $122.88
• VanEck MSCI International Quality ETF (ASX: QUAL) at $54.42

Plus many others.

Are these record-high ASX ETFs still a buy?

ETF investors who have money ready to plough into the share market might be feeling some apprehension at investing in any of these funds at new record highs today. And understandably so. After all, we’re often told that successful investing involves ‘buying low, selling high’, not the other way around.

So how does an investor handle this prickly problem?

Well, I think it depends on the ETF in question. For funds that track a commodity or a cyclical sector (for example, NUGG or perhaps SEMI), buying at new record highs might not be a prudent move.

Looking at the gold price, for instance, over long periods of time will tell you that new highs are often followed by periods of weakness.

If you want exposure to something like gold in your portfolio, I think it’s best to load up when other investors are sending the price down, rather than up.

But what about other ETFs?

Time in the market or timing the market?

I don’t think investors who want to buy into a fund like the VanEck Wide Moat ETF, the Vanguard International Shares ETF or the iShares Japan ETF should be dissuaded from investing today based on these record highs.

These ETFs are designed to enable investment into compounding assets that should, reasonably consistently, increase in value over time. Whether they do or not is a different matter.

But in an ideal world, an investor wants to see as many new record highs as possible from an ETF of this nature. So avoiding one of these funds because it is at a record high might mean you miss out on the next one.

But you won’t even have to worry about these sorts of issues if you use a dollar-cost averaging strategy.

I think this is the best way for most investors to invest in ASX ETFs. It involves buying a fund that you like consistently, regardless of what its unit price is doing.

That way, you can take the stress out of buying at moments like this, safe in the knowledge that you’ve bought for better prices in the past, but still might benefit from future highs.

The post Are these record-breaking ASX ETFs now too expensive to buy? appeared first on The Motley Fool Australia.

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More reading

• Why Vanguard MSCI Index International Shares ETF (VGS) is a great buy for almost anyone
• 3 excellent ASX ETFs to buy in March
• 4 hot ASX ETFs smashing all-time highs on Thursday
• How to build a second retirement fund outside of superannuation
• Should I buy the iShares S&P 500 ETF (IVV) at all-time highs or wait?

Motley Fool contributor Sebastian Bowen has positions in VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betashares Crypto Innovators ETF and iShares S&P 500 ETF. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. 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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Goodman Group (ASX: GMG) is an ASX stalwart stock that has delivered impressive growth and continues to have a strong outlook.

In the past year, the Goodman share price has risen 59% and it has risen over 130% in the last five years.

It describes itself as a global industrial property and digital infrastructure specialist group with operations across Australia, New Zealand, Asia, Europe, the UK, and the Americas. The business owns, develops and manages “high-quality sustainable properties” that are close to consumers in key cities around the world.

The property portfolio includes logistics and distribution centres, warehouses, light industrial, multi-storey industrial, business parks and data centres. It recently reported its FY24 half-year result, which I thought was impressive.

Continuing performance

The ASX stalwart stock is expecting to achieve FY24 full-year operating earnings per security (EPS) growth of 11%.

Businesses around the world need more, and increasingly advanced, logistics properties to fulfil their distribution network needs. Goodman owns some of the most impressive warehouses in Australia. Amazon is by far its biggest tenant by rental income.

The business has low gearing, of 9%. I think this puts it in a strong position in this high interest rate environment. Some property businesses have much higher debt levels, which is increasing their interest expenditure.

Its portfolio occupancy remains high at 98.4%, with like-for-like net property income (NPI) growth of 5%.

Strong outlook

Goodman said at its FY24 first-half result that significant progress has been made on advancing its data centre strategy, securing power and planning, commencing infrastructure and continuing to work with customers.

The business is “well-positioned to capture strong demand for new, high-value, high-tier data centre facilities in supply-constrained locations.” Data centres are expected to be a key area of growth for the group.

Data centres have “attractive development margins on existing and new projects”. Data centres under construction currently represent just over a third of the ASX stalwart stock’s WIP.

It has total WIP of $12.9 billion, which covers 85 projects in 12 countries. The development yield on cost is 6.7% for projects in WIP. The weighted average lease expiry (WALE) is 13.6 years for the projects in WIP.

All of these completed projects will contribute significantly to Goodman’s rental profits and operating EPS.

We can’t control what the Goodman share price will do, but it’s regularly reporting operating EPS growth of around 10% each year. Supply constraints in its locations are expected to continue to drive rental growth and maintain high occupancy rates across the portfolio.

It’s not cheap, but I think it’s one of the highest-quality ASX shares around. That’s why I’d called it an ASX stalwart stock.

The post If you don’t own this ASX stalwart stock, you’re missing some serious stability appeared first on The Motley Fool Australia.

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More reading

• 2 no-brainer ASX ‘beginner’ stocks I’d buy
• For $1,500 in monthly passive income, buy 1,400 shares of this ASX 200 stock
• Here are the top 10 ASX 200 shares today
• 2 ASX 200 real estate shares leaping higher on earnings news
• Why Altium, Goodman, Magellan, and Wesfarmers shares are storming higher today

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 positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group. 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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