It's a fire sale of equities, with a once-in-a-lifetime opportunity to buy blue-chip shares at crazy prices. Here are 5 quality ASX shares investors could consider adding to their portfolio right now.
Gotta love Computershare's sticky customers and loyal clients
Computershare Limited (ASX: CPU) is the largest share registry business in the world. It delivers global exposure to investors, underpinned by sticky customers, thanks to the cost and hassle involved in switching providers if you're a listed business.
"Cost cutting and its growing mortgage services division will support growth over the long term," says Tyson Jonas, a senior financial adviser with Jonas Wealth.
Computershare is a capital-light business with strong, defensive recurring earnings.
"Its core registry services division has a 99 per cent client retention rate. Average client tenure is 20 years, making this business very appealing," Jonas adds.
Computershare shares could be for you if: you want exposure to a services business that will likely benefit from the post-coronavirus share market recovery.
All about Seek: other online jobs boards can go home
SEEK Limited (ASX: SEK) is the clear leader in the Australian jobs advertising space. The company captures 90% of all the time job seekers spend online looking for a position.
The business has invested in leading jobs' boards in fast-growing emerging markets like Brazil, China and Mexico. These countries also have rising internet penetration.
The performance of SEEK's education division is typically counter-cyclical to its jobs business. This part of the business will also help job seekers upskill while people are in lockdown.
"COVID-19 will probably impact short-term earnings. But there's the potential for impressive growth over the long term," says Jonas.
SEEK shares could be for you if: you want to diversify your portfolio by accessing a high-growth company with diverse international revenue sources.
Market darling Cochlear should continue to wow
Hearing aid company Cochlear Limited (ASX: COH) has around 60% market share and is a leader in its field. It's geographically diversified with exposure to the Americas, Europe, the Middle East and Asia Pacific, which will help support it through the COVID-19 recovery phase.
For the most part, Cochlear's dividend has increased each year, targeting a dividend payout ratio of around 70% of net profit. "We see no reason for this to change once the economy normalises mid next year," says AJ Financial Planning founder Alex Jamieson.
Cochlear recently raised $880 million through an institutional placement and a further $50 million through a share purchase plan. It also has a recently-approved $150 million bank facility.
"This will support it to weather the slowdown and also handle legacy legal disputes on a US patent infringement. This company is well capitalised to handle what lies ahead with the virus uncertainty," he adds.
Cochlear will benefit from the resumption of elective surgeries post-coronavirus. The aging baby boomer population globally should also deliver a bottomless pit of work for decades to come.
Cochlear shares could be for you if: you want exposure to the aging population and a global market leader in the health space.
Transurban: a dividend yield play with upside growth
Toll road operator Transurban Group (ASX: TCL) owns major assets in Melbourne, Sydney and Brisbane, plus infrastructure in Montreal, Canada and Washington, in the US.
Toll road traffic has dropped by up to 70% in some areas. But numbers are expected to rise steadily to pre-COVID-19 levels by mid next year. The company recently raised $815 million of non-recourse debt followed by a further facility of $1.3 billion.
"This should help over this period of disruption," says Jamieson, who says there's the potential for an ongoing yield of 4.73% based on today's share price.
Transurban has lifted its dividend by between 7% and 10% or more every year since 2010. "Notwithstanding a short-term disruption, we expect the dividend to go back to usual on normalising traffic numbers," he says.
The business is also likely to benefit as nervous travellers return to travelling in their cars before they feel safe taking public transport. The low oil price will also provide support before excess stockpiles abate and the market recovers.
Says Jamieson: "Ongoing congestion pressures with population growth in Australia will give this infrastructure provider an endless supply of work, with many new roads projects on the cards. This is one opportunity you don't want to drive past without taking a second look."
Transurban shares could be for you if: you want to ride the forthcoming infrastructure boom and benefit from the low oil price.
Challenger: addressing longevity risk with annuities
Challenger Ltd (ASX: CGF) is the market leader in annuities in Australia and the aging population is likely to support the business well into the future. It also distributes annuities in Japan, which has a similar demographic to the local market.
"Both countries need products like annuities to help mitigate longevity risk," says Jonas.
The company is well established across the local wealth management space, with good relationships with financial advisers, dealer groups and investment platforms. The Australian federal government's Retirement Income Framework should also create demand for annuities in retirees' portfolios.
Challenger shares could be for you if: you believe Aussie and Japanese retirees' appetites for annuities products will only grow as the population ages.
