Recently, equity analysts from financial advisory firm E.L. & C. Baillieu released a report sharing their pick of ASX shares that are built to last through most market environments.
The stocks mentioned by analysts all share similar characteristics of having a solid financial position and the ability to generate strong returns on capital.
Amcor PLC (ASX: AMC)
Amcor is a dual-listed packaging giant that makes around 80% of its revenue from the sale of packaging for defensive consumer products such as food, beverages, hygiene and healthcare equipment.
Amcor has maintained a strong balance sheet on the back of strong and consistent cashflow. Analysts view Amcor as a beneficiary of the changing operating environment that has resulted from the COVID-19 pandemic.
Key drivers include the increase in demand for fast moving consumer goods and healthcare products. In addition, the record low oil price could see a reduction in the price of raw material used in the company's plastic packaging.
Commonwealth Bank of Australia (ASX: CBA)
According to analysts, the Commonwealth Bank share price is trading at a discount as a result of the recent market correction. Although the COVID-19 pandemic has led to wide disruptions, analysts view Commonwealth Bank as a premium franchise in the banking sector. According to the research, a range of initiatives from regulators will protect Commonwealth Bank from the current crisis.
Coles Group Ltd (ASX: COL)
The COVID-19 pandemic has seen Coles experience a significant surge in sales momentum on the back of consumer panic buying. Analysts predict that the renewed sales momentum could see the company boost operating margins and earnings.
Earlier this year, Coles reported its 49th consecutive quarter of comparable sales growth in its supermarket division. In addition, management also identified $1 billion in cost savings that could be achieved by FY23.
Telstra Corporation Ltd (ASX: TLS)
Last month, Telstra informed the market that the COVID-19 pandemic will negatively impact the company's full-year performance. With a large portion of the workforce working from home, demand for telecommunications has become more urgent. As a result, Telstra has looked to expand its workforce and waive late payment fees.
Telstra informed shareholders to expect free cash flow and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be at the bottom end of its forecasted range. In addition, the company expects underlying EBITDA growth to be in a range of $0 to $500 million for FY20.
Analysts view the Telstra share price as a buy, citing the companies strong balance sheet, high yield and underlying business as remaining relatively unaffected by the pandemic.
Woodside Petroleum Limited (ASX: WPL)
Woodside is the largest operator of oil and gas production in Australia. Analysts see Woodside as the most resilient to the plunging oil price in comparison to its peers and believe it is well poised to capture opportunities in the distressed sector.
The company's strong balance sheet and cost base were cited as factors that could allow Woodside to defer growth until market conditions improve. Analysts estimate that without any further changes to business, Woodside could post a loss of US$178 million in 2021, with a healthy EBITDA of US$1.8 billion.
Foolish takeaway
According to E.L. & C. Baillieu analysts, the COVID-19 pandemic has created great opportunities with many of the stocks listed trading at discounted levels.
Although the firm's research is highly regarded, investors shouldn't jump the gun and buy all the stocks listed. I think a prudent strategy would be to start a watchlist of similar companies that you could build a portfolio around.
