2020 is only a few weeks away, so I think it's a good idea to think about the shares that we want to buy for our portfolios.
The investment environment is constantly changing. Sometimes it seems the trade war between the US and China will be sorted and then something puts a spanner in the works.
If I'm looking at 2020 and beyond I'd want to invest in these leading ASX shares:
Webjet Limited (ASX: WEB)
The share price of Webjet is down around 20% over the past six months, particularly because of the Thomas Cook problems.
However, the travel business announced this week that it expects to announce FY20 half year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) growth of at least 37% to at least $80 million, up from $58 million.
For the whole of FY19 Webjet is expecting to announce underlying EBITDA growth of 26% to 34% with organic EBITDA growth of 16% to 23%.
There aren't many mid-caps on the ASX that are trading at good value and also growing at double digits with more growth expected for many years. Webjet is trading at just 14x FY21's estimated earnings.
Duxton Water Ltd (ASX: D2O)
The value of water entitlements has risen significantly during 2019 as the drought conditions continue. The drought will eventually break, but for now Duxton Water is benefiting from the increase in water prices.
Duxton Water's net asset value (NAV) per share has risen to $1.72 (and pre-tax has gone up to $1.95). That means the share price is valued at 16.3% and 26.2% discount to the post-tax and pre-tax respective NAVs.
The Board of Duxton Water is targeting a 2.8 cents per share dividend in March 2020 and 2.9 cents per share dividend for September 2020, meaning its forward grossed-up dividend yield is 5.6%.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
The Soul Patts share price has dropped off since going ex-dividend, but its underlying assets haven't really fallen. So I think it's looking better value for investors at the moment, particularly as the dividend yield has been boosted to 3.9%.
The company has a diverse array of investments like TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), a small cap portfolio and a blue chip portfolio. The diversification is very useful.
It continues to invest in long-term growth areas like financial services and retirement villages that could support earnings and dividend growth for many years to come.
Foolish takeaway
At the current prices I'm most attracted to Soul Patts because of its diverse portfolio, but Webjet has a good chance of producing the biggest returns because of its growth rate. At some point there's going to be a wet period which would likely reduce water prices.
