If you are in the market for some new additions to your investment portfolio, then it could be worth hearing what Goldman Sachs is saying about the two ASX 200 shares in this article.
Let's see what the broker likes about these shares:
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QBE Insurance Group Ltd (ASX: QBE)
According to a note released this morning, Goldman Sachs has reaffirmed its buy rating on this insurance giant's shares with an improved price target of $22.50 (from $22.00).
The broker believes that the ASX 200 share's valuation is attractive compared to historical levels and global peers. Particularly given its positive outlook and improving profitability. It said:
QBE still has relative valuation appeal vs history, vs global peers and vs ROTE generated. We think FY25 guidance should continue to see an improving COR as QBE's CAT exposure and business mix is gradually repositioned toward improved profitability alongside underlying volume growth. Capital release opportunity remains.
Goldman is also expecting some decent dividend yields from its shares in the near term. It is forecasting partially franked dividends per share of 76.6 cents in FY 2024, 85.5 cents in FY 2025, and 89.7 cents in FY 2026. Based on the current QBE share price of $19.49, this will mean dividend yields of 3.9%, 4.4%, and 4.6%, respectively.
Suncorp Group Ltd (ASX: SUN)
Another ASX 200 share that Goldman Sachs is bullish on is fellow insurance giant Suncorp.
This morning, the broker has retained its buy rating on the company's shares with an improved price target of $20.00 (from $19.20).
Its analysts think that Suncorp is a better option than Insurance Australia Group Ltd (ASX: IAG) on valuation grounds. The broker has a neutral rating and $8.05 price target on IAG's shares. It explains:
IAG has outperformed SUN by ~13% on a 6 mth view with consensus 2 year forward P/E differential now at ~2.5x (IAG at 19x and SUN at 16.5x). We still think SUN offers reinsurance upside optionality if economic (supporting ROE/margin), better unit trends, margin consistency and risk retention (supporting NEP) while IAG offers greater margin protection (perils/ reserves) and a better ROTE.
As with QBE, some decent dividend yields are expected from this ASX 200 share in the near term. Goldman has pencilled in fully franked dividends per share of 75 cents in FY 2025 and 82 cents in FY 2026. Based on its current share price of $19.34, this equates to dividend yields of 3.9% and 4.2%, respectively.
