2 ASX shares I have been buying in 2024!

I'm a believer in the long-term outlook of these stocks.

| More on:
Businessman using a digital tablet with a graphical chart, symbolising the stock market.

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

The last few months have been a busy period of investing for my ASX share portfolio. I'm going to talk about two names I decided to recently buy.

We can't control what the overall S&P/ASX 200 Index (ASX: XJO) is going to do – sometimes it will reach an all-time high. I believe we can always find value on the stock market if we look in the right places.

Duxton Water Ltd (ASX: D2O)

Duxton Water is a company that owns water entitlements and leases them out on short-term or long-term contracts to agricultural operators that want additional water.

Water is obviously a key component of farming, I view Duxton Water as an indirect investment in the Australian agricultural industry. In my opinion, Australia is one of the world leaders in farming.

In my eyes, water entitlements are a commodity that can be impacted by supply and demand. When there's a lot of rainfall, it reduces the demand and impacts water values. Less rainfall should translate into more demand for water entitlements. It also helps that, over time, more water-hungry plants are being planted such as almonds.

The recent La Nina weather pattern pushed down water prices and bumped up water storage levels. But water storage levels are now reducing.  

In the ASX share's latest monthly update for February, Duxton Water revealed Murray Darling Basin storage levels were at 81%, down from 92% compared to last year. Northern basin storages were at 66%, and southern basin storages were at 84%. Both of these levels are lower when compared to the previous year of 90% and 93% respectively.

I used the recent weakness of the Duxton Water share price to buy more shares. The ASX share has been paying an appealing dividend for several years, though that's not guaranteed to continue. It currently has a guided grossed-up dividend yield of 6.7%.

The Duxton Water share price is at a discount of roughly 10% to its pre-tax net asset value (NAV) of February 2024.

Johns Lyng Group Ltd (ASX: JLG)

I have invested multiple times this year in Johns Lyng shares – I recently decided to invest once more after seeing the FY24 first-half result and the subsequent decline of the Johns Lyng share price.

The ASX share's main offering is restoring building and contents after an insurable event, such as storms, flooding or fire.

It also has a sizeable catastrophe division which made $120.4 million in revenue in HY24, but this was 35% lower than last year. Work in this area is likely to be lumpy – catastrophes don't arrive like clockwork.

Johns Lyng reiterated that catastrophe events are "growing in size and duration". It's expecting this segment to continue to expand in future periods. The $120.4 million figure already represents more than 87% of the company's original FY24 forecast.

The ASX share reported its normalised business as usual (BAU) net profit after tax (NPAT) grew by 15.8% to $25 million. That's a good growth rate for its underlying business, in my opinion.

The company has also been making acquisitions in the strata services and essential home services space, which adds defensive earnings and can create synergies, according to the company.

I think the profit and dividend can keep growing for a long time to come, particularly if it can keep expanding in the US and other international markets.

Motley Fool contributor Tristan Harrison has positions in Duxton Water and Johns Lyng Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Man ponders a receipt as he looks at his laptop.
Opinions

3 reasons why the Xero share price could be a strong buy

This stock has all the hallmarks of a long-term winner.

Read more »

Happy miner giving ok sign in front of a mine.
Opinions

Which ASX 200 stock offers 'material upside' amid continuing uncertainty over US tariffs?

Blackwattle Investment has identified one ASX 200 large-cap stock that is thriving on the uncertainty.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

2 rising ASX financial shares with 'meaningful upside' still left: fundie

Financials outperformed every other sector in FY25, but there are still buying opportunities left, say these experts.

Read more »

A businessman hugs his computer and smiles.
Opinions

If I could only own one ASX 200 share for the rest of my life, it'd be this one

This is one stock I expect to own forever.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Brokers rerate 3 leading ASX 200 tech stocks

Experts reveal their ratings on the ASX 200 tech sector's three biggest companies.

Read more »

Person holding a blue chip.
Opinions

Buy alert! 2 ASX 200 blue-chip shares worth a look now: expert

Dylan Evans from Catapult Wealth has identified two blue-chip shares that he thinks are good buys today.

Read more »

Two happy woman on a couch looking at a tablet.
Opinions

Why I'm excited to see the results of these ASX 200 shares

These stocks could reveal very interesting insights.

Read more »

Young male investor smiling looking at laptop as the share price of ASX ETF CRYP goes higher today
Opinions

Why I just bought this 5.2%-yielding ASX dividend stock and plan to buy even more

This business is one of my favourites for dividends and total returns.

Read more »