'Exceeds expectations': 3 ASX 200 shares to buy for 'diversified earnings'

Experts name one stock each from mining, retail and property sectors to sink your teeth into.

| More on:
a man with a wide, eager smile on his face holds up three fingers.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Punters are always told diversification is the only free lunch in investing.

Well, there is no better manifestation of that idea than picking three shares from the S&P/ASX 200 Index (ASX: XJO) involved in mining, retail and real estate.

Let's take a look at these buy recommendations:

The unanimous pick

Both Shaw and Partners senior investment advisor Jed Richards and Morgans investment advisor Jabin Hallihan are bullish on conglomerate Wesfarmers Ltd (ASX: WES).

The ASX 200 share is currently in a dip, down just under 6% since 26 April.

Richards thinks it's a buying opportunity as the company "posted strong first half 2023 results".

"Statutory net profit after tax of $1.384 billion was up 14.1% on the prior corresponding period," Richards told The Bull.

"A key quality is the company's diversified earnings streams."

Indeed both experts like how hardware chain Bunnings is performing, as well as stationery retailer Officeworks. Department store Kmart has some work to do, especially with the economy slowing down.

"Kmart is improving more rapidly than first expected," said Richards.

"Earnings should remain solid during the expected tougher economic environment."

Hallihan said his analysts continued to back Wesfarmers' "proven management team" and noted that retail was not its only game.

"The company has diversified via its lithium and health divisions."

Copper miner and warehouse manager both going places

A mining stock that Richards currently loves is copper producer Sandfire Resources Ltd (ASX: SFR).

The share price has rallied an impressive 13.3% since 26 May, but that still leaves it more than 11% short of its 19 April high.

"This copper producer is getting stronger as it delivers on its mine development plan," said Richards.

"We applaud when management meets or exceeds expectations."

Outside of the company, copper demand could be on the way up.

"We also expect copper prices to improve during the next 12 months, which paints a bright outlook."

Many of Richards' peers agree with his bullishness on Sandfire.

According to CMC Markets, eight out of 14 analysts currently rate the stock as a buy.

Hallihan likes the look of industrial property manager Goodman Group (ASX: GMG).

After an 18.6% rally so far this year, his team has "initiated research" on this company that boasts $80.7 billion of global assets under management.

"Goodman operates in 14 countries across the Asia Pacific, Europe and the Americas," he said.

"It can grow assets under management and add value from an active buy, build and manage strategy."

In the short term, Hallihan's team reckons there's an 18% upside from the current share price.

Again, the wider professional community is in sync with our expert.

A whopping nine out of 12 analysts that currently cover Goodman currently think it's a buy, as surveyed by CMC Markets.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Investing Strategies

Woman on a swing at a beach, symbolising passive income.
Dividend Investing

Overinvested in Fortescue shares? Here are two alternative ASX dividend stocks

Let’s unearth some other passive income opportunities.

Read more »

A person stands still with a virtual reality technology headset on and arms outstretched, surrounded by frozen ice and snow.
Dividend Investing

I'd make my money stretch further with these 3 ASX passive income shares

I think these three ASX passive income stocks can keep delivering for years to come.

Read more »

Person with a handful of Australian dollar notes, symbolising dividends.
Investing Strategies

Want cash like Warren? How to stack paper without ditching ASX shares

Life is about trade offs.

Read more »

A business woman flexes her muscles overlooking a city scape below.
Blue Chip Shares

Brokers name 2 strong ASX 200 shares to buy now

These shares are among the top picks on the benchmark ASX 200 index according to analysts.

Read more »

Different Australian dollar notes in the palm of two hands, symbolising dividends.
Dividend Investing

3 high-yield ASX dividend stocks named as buys

Analysts think big returns could be on offer with these buy-rated stocks.

Read more »

A happy boy with his dad dabs like a hero while his father checks his phone.
Small Cap Shares

Buy these small cap ASX shares for big juicy returns

Analysts have good things to say about these buy-rated stocks.

Read more »

Rail worker in hard hat kneels over train tracks inspecting tracks
Dividend Investing

A fund manager is backing this fallen ASX 200 dividend giant as a turnaround buy

This ASX 200 stock could be on track for a turnaround.

Read more »

Young woman using computer laptop smiling in love showing heart symbol and shape with hands. as she switches from a big telco to Aussie Broadband which is capturing more market share
Growth Shares

Goldman Sachs loves these ASX 200 growth shares: Do you own them?

Why is the broker bullish on them? Let's find out.

Read more »