Choosing ASX shares to buy can be a daunting task for new investors looking to kickstart their portfolio. The ASX has a huge selection of companies out there, and with so many choices available, one might not know where to start.
Below, I have selected my best 3 ASX shares to buy for any new investor who is seeking a diversified portfolio of safe but growing companies that also offer reliable dividends.
Washington H. Soul Pattinson and Co. Limited (ASX: SOL)
Listed for more than 107 years, Soul Patts (as it is commonly referred to) is the second oldest company on the ASX. The Australian investment house has a portfolio of ASX shares in industries such pharmaceuticals, mining, building materials, property investment, telecommunications, financial services and other equity investments.
Major share holdings include TPG Telecom Limited (ASX: TPG), Brickworks Limited (ASX: BKW), and New Hope Corporation Limited (ASX: NHC).
Soul Patts' broad asset diversification has made it resilient to economic crises. The company has consistently paid dividends to shareholders for the last 40 years and has increased its dividend payout policy since 2000.
The Soul Patts share price is trading for (at the time of writing) $21.35, and is 8.5% below its 52-week high. I think that Soul Patts is an excellent choice for first-time investors as it has a solid track record of outperforming the S&P/ASX 200 Index (ASX: XJO).
Appen Ltd (ASX: APX)
Appen is a global leader focused on collecting and labelling data for machine learning and artificial intelligence (AI) systems. In layman's terms, the company breaks down language barriers using its annotation platform for developing client's products and services. This includes digital assistants and chat boxes, recommenders on search engines, and fraud protection systems.
Some of Appen's customers include Apple, Amazon, Google, Microsoft, as well as government agencies.
Demand for AI is expected to grow strongly over the next few years, with forecasts of $97.9 billion by 2023. The addressable market is potentially enormous for Appen's future revenues.
Last week, Appen released its half-year results and although it delivered solid earnings, shareholders were not satisfied. The Appen share price has since fallen from an all-time high of $43.66 to (at the time of writing) $34.90. I believe this 20% drop has created a buying opportunity for new investors who want exposure to a quality growth share.
Coles Group Ltd (ASX: COL)
Last but not least in my pick of the best ASX shares is Coles. The leading Australian retailer has over 2,500 retail outlets nationally and services over 21 million customers each week.
The supermarket giant has performed well since its demerger from Wesfarmers Ltd (ASX: WES) in late 2018. The Coles share price has been on an upward trend, debuting at $12.49 to (at the time of writing) now sit at $17.78, up 42%.
A part of Coles' recent share price rise was attributed to the pantry stocking during COVID-19. However, the company boasts defensive qualities through its strong market position – no matter how bad the economic climate is, people still need to buy food.
Last month, Coles released its FY20 results, reporting bumper profits and increasing its final dividend to by 14.6% to 27.5 cents. In the company's first 6 weeks of FY21, supermarket sales were comparable with the levels achieved in the second half.
I think Coles is good company to have in your portfolio. Its large store network and online platforms provide accessibility for all consumers, and thus support stability for strong revenues going forward. In light of this, I would recommend Coles to 'mum and dad' investors.
