• This article will look at our top two stock picks.
• A diversified international miner and retailer riding high on Australian markets
• South32 and Harvey Norman’s outcomes are intrinsically tied to the strength of the Australian and regional markets.
Harvey Norman Holdings Ltd ASX:HVN (HVN) and South32 Limited ASX:S32 (S32) are two listed Australian companies poised to benefit from the strong Australian consumer and a resurgent China.
With the Reserve Bank of Australia forecasting positive GDP growth through 2024 before picking up again in 2025, we have considered two stocks well positioned to benefit from such an economic outlook.
Harvey Norman Holdings Ltd ASX:HVN (HVN)
HVN is an Australian-based multinational retailer specialising in property, retail franchise and digital enterprise. Despite the recent drop in first-half profits, HVN represents a good investment opportunity due to its significant property portfolio, which is currently undervalued by the market.
The company’s assets include freehold properties, shopping centres, and warehouses in various locations globally.
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HVN has a strong brand reputation and a loyal customer base. The company’s recent sales during the pandemic have been high, which could indicate a strong demand for its products.
The company has also recently expanded its operations in Europe, which could further increase its earnings in the future.
Additionally, HVN offers a solid, fully franked dividend yield, making it an attractive option for income-seeking investors. The company’s dividend payout ratio is generally in line with its earnings, indicating a sustainable dividend policy.
HVN has a diversified business model, a strong brand reputation, and an undervalued property portfolio. These factors, combined with the company’s solid dividend yield, make it a compelling investment opportunity for investors looking for a long-term investment.
Source: Yahoo! Finance
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South32 Limited ASX:S32 (S32)
S32 is a diversified mining company with a strong presence in the mining industry. Despite the recent drop in the company’s share price, TheBull.com.au has a buy rating on S32. The analysis suggests a good investment opportunity due to its solid fundamentals and future growth prospects.
The current market conditions present a buying opportunity for investors looking to take advantage of the discounted share price.
A critical factor that makes S32 attractive is the low inventories of base metals, which could lead to a price spike. The increasing demand for base metals in 2023 is expected to support this price trend further.
The company has a diversified range of base metal operations, including aluminium, manganese, and nickel, which provide a hedge against volatility in any single commodity.
S32 has also shown resilience in its operations during the pandemic. The company has a strong balance sheet, and its cost-cutting measures have helped improve profitability.
S32’s commitment to sustainability and its efforts to reduce its carbon footprint could help it to capitalise on the growing demand for sustainable mining practices.
South32’s strong fundamentals, diversified base metal operations, and future growth prospects make it a compelling investment opportunity. Investors who take advantage of the discounted share price could potentially benefit from the expected price spike in base metals and the company’s long-term growth prospects.
Source: Yahoo! Finance
