The Australian Securities Exchanges (ASX) and the US stock markets can be the best destination for Australian traders. The appeal of the ASX lies in its numerous advantages, including easy access, low trading costs, high dividends, and stable growth. Meanwhile, the movements on Wall Street serve as a crucial indicator for global financial markets, influencing broad sentiment, particularly in the technology sector. Here are my picks of the best stocks for Australian investors to trade.
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BHP Group Limited (ASX: BHP)
BHP is one of my favourite stocks in the ASX as it is a multinational mining company that offers a generous dividend payout and consistent growth. The stock has a high dividend yield of nearly 6% and a price-to-earnings ratio of 20, indicating very healthy operating conditions.
BHP is the largest market cap company in Australia, duel listed on both the Australian and London Stock Exchanges. BHP’s diverse mining sectors, encompassing iron ore, copper-nickel, and coal, contribute to its ability to mitigate production risks through strategic diversification.
Commonwealth Bank of Australia (ASX: CBA)
I include CBA on the list due to its sizable business, being the biggest bank in the Australian Big Four. It is also the second largest market cap company in the ASX.
Additionally, it holds the position of the second-largest company by market capitalization on the ASX.
The bank offers an attractive dividend payout and provides investors with favourable returns through its share buybacks.
CBA has a sustainable net interest margin of around 2%, given its dominance in its lending business.
CSL (ASX: CSL)
I favour CSL as it is the only healthcare company among the top market cap companies in the Australian stock markets. Healthcare is often seen as a defensive sector to diversify your portfolio risk.
Notably, CSL’s stocks exhibit more volatility compared to other large market capitalization companies, presenting potential trading opportunities in the short term.
Meanwhile, it has a high P/E ratio of 37 and an Earning Per Share (EPS) growth of 14% year on year, making it a potential value stock for long-term investors as well.
Microsoft (Nasdaq: MSFT)
I like Microsoft because the company holds huge potential in the prevailing AI race. Thanks to the AI boom, Microsoft has surpassed Apple to become the world’s largest company by market capitalization, topping US$3 trillion in January 2024.
The tech giant was investing more than US$10 billion in OpenAI to develop the generative AI-backed chatbot, ChatGPT, leading to a revolutionary impact on internet search tools.
Microsoft introduced Copilot in November 2023, which can be seen as a further strategic move to solidify Microsoft’s position as a frontrunner in the AI landscape.
Apple (Nasdaq: AAPL)
I like Apple’s stock as the company has a sustainable dividend payout policy. It values investors while dedicating itself to stable growth.
Apple is considered a classic value stock and holds a significant position in the portfolio of Berkshire Hathaway, owned by Warren Buffett, comprising 50% of the portfolio.
In addition to its advancements in hardware, Apple’s service division has witnessed substantial growth in recent years.
NVIDIA (Nasdaq: NVDA)
I cannot avoid talking about Nvidia as the company presents the strongest sales growth among the US big tech companies.
NVIDIA eclipsed Alphabet and Amazon, becoming the third-largest US company in February 2024. Well-known for producing the world’s most advanced Graphics Processing Units (GPUs), Nvidia supplies leading tech giants with its cutting-edge AI chips.
The ongoing AI race will likely support Nvidia’s chips, crucial for supporting generative AI training, to remain in high demand.
Disclaimer: This is not investment advice and should be read as general information.
Tina was a Market Analyst at CMC Markets from 2015 to 2024, providing client education, market commentary, and media presentations. She specializes in technical analysis and market fundamentals. Tina believes financial markets comprise a vast area reflecting economies, politics, history, psychology, and philosophy. As a result, her analysis is based on her interpretation of a specific country’s economic and historical background, alongside investor sentiment and behaviour.
Tina’s expertise has garnered recognition, with her commentary frequently quoted by reputable sources like Bloomberg, CNBC, Routers, WSJ, and AFR. Her insights span a diverse spectrum, covering various financial domains, including stock markets, foreign exchange, commodities, and cryptocurrencies. Previously, she also spent significant time with China Central Television. This experience allowed her to develop a deep understanding and insight into China’s economics and business.