Broker says this ASX 200 share is a 'quality stock to put in your bottom drawer'

Ord Minnett has good things to say about this blue chip.

| More on:
A young man punches the air in delight as he reacts to great news on his mobile phone.

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

There are concerns over global economic growth due to a potential trade tariff war being instigated by US President Donald Trump.

In light of this, some investors may be looking for defensive ASX 200 shares to buy for their portfolio right now.

If that's you, then it could be worth checking out the share in this article that has been tipped as one to buy and hold.

Which ASX 200 share?

The share in question is Lottery Corporation Ltd (ASX: TLC). It provides gaming and lottery services in Australia through The Lott and Keno brands.

It was founded almost 150 years ago, which demonstrates just how defensive its business is. The company has operated through world wars, pandemics, stock market crashes, and countless other major events.

Clearly, the temptation to strike it rich with lottery tickets is not going away any time soon, putting this ASX 200 share in a strong position to benefit for many years to come.

Should you invest?

The team at Ord Minnett is positive on the company and was pleased with its first half results last month. The broker said:

The Lottery Corp recently posted first-half FY25 earnings that matched market expectations. The highlight of the result was full-year cost guidance that flagged a meaningful fall on a year ago.

And while it acknowledges that the second half will be softer year on year due to a particularly strong six months in the prior corresponding period, the broker is confident on its prospects in FY 2026. It adds:

The second half will see lottery revenue under pressure given the business will be cycling its strongest half-year period ever, but growth should return in FY26.

In light of this, Ord Minnett sees Lottery Corp as a quality ASX 200 share that investors should hold onto for the long term. It concludes:

We view Lottery Corp at its current share price levels as a quality stock to put in your bottom drawer and wait for growth. This leads us to reiterate our Buy recommendation on the stock and our target price of $5.70.

As mentioned above, Ord Minnett has a buy rating and $5.70 price target on its shares. Based on its current share price of $4.81, this implies potential upside of almost 19% for investors over the next 12 months.

In addition, a fully franked dividend yield in the region of 3.5% is expected over the next 12 months. This boosts the total potential return to approximately 22%.

To put that into context, if Ord Minnett is on the money with its recommendation, a $10,000 investment would turn into over $12,000 by this time next year. Here's hoping this is the case!

Should you invest $1,000 in The Lottery Corporation Limited right now?

Before you buy The Lottery Corporation Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and The Lottery Corporation Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

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

More on Broker Notes

Excited couple celebrating success while looking at smartphone.
Broker Notes

Bell Potter names the best ASX 200 stocks to buy in May

The broker is feeling bullish on these names this month. Let's find out why.

Read more »

Red buy button on an apple keyboard with a finger on it representing asx tech shares to buy today
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Share Market News

ASX shares in April: 8 key takeaways according to Macquarie

Here are eight key takeaways from April, according to a new note from the broker.

Read more »

A shocked man holding some documents in the living room.
Broker Notes

Macquarie's take on Judo Capital shares after suddenly falling 19% yesterday?

Judo Bank was the ASX's top-performing banking stock in 2024.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Broker Notes

5 top ASX stocks to buy in May

These stocks could be quality picks for investors this month according to analysts.

Read more »

Person pressing the sell button on a smartphone.
Broker Notes

Sell alert! 3 ASX shares the brokers are calling time on

Brokers say it's time to hit the sell button on these ASX shares.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Share Market News

What is next for ASX 200 shares after last month's upheaval?

Macquarie reveals its outlook for ASX 200 shares in May in a new research note published today.

Read more »