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 sitting in a plane seat works on his laptop.
Opinions

Expert reveals 2 ASX stocks to sell — and 1 is a recent IPO

Toby Grimm from Baker Young shares his insights.

Read more »

An analyst wearing a dark blue shirt and glasses sits at his computer with his chin resting on his hands as he looks at the CBA share price movement today
Opinions

Expert's verdict on 3 ASX 200 shares (2 have doubled in value and the other has lost 29%)

Two of these stocks were the best performers of their sectors in FY25. Should you buy, hold, or sell?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Opinions

Where I'd invest in ASX shares ahead of the likely RBA rate cut

These stocks look too good to miss.

Read more »

Person pretends to types on laptop drawn in sand.
Opinions

I sold one of my oldest ASX 200 shares last week. Here's why

Why would I sell one of my longest-held stocks?

Read more »

Broker analysing the share price.
Materials Shares

Buy, hold, or sell? Broker's verdict on 3 ASX 200 materials shares

Materials was one of four market sectors that weakened in overall value in FY25.

Read more »

A person sitting at a desk smiling and looking at a computer.
Technology Shares

3 ASX 200 tech shares to buy in July: Experts

The ASX tech sector delivered outstanding returns for investors in FY25.

Read more »

A group of executives sit in front of computer screens in a darkened room while a colleague stands giving a presentation with a share price graphic lit up on the wall
Opinions

2 ASX 200 large-cap shares that this fundie is cashing in after phenomenal growth

Shaw and Partners portfolio manager James Gerrish says he knows this will be an 'unpopular call'.

Read more »

Woman and man calculating a dividend yield.
Opinions

Buy or bail? Fundie's verdict on 2 ASX 300 shares

Stuart Bromley of Medallion Financial Group provides his insights.

Read more »