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Are BHP, CBA, and CSL shares top buys?

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Investing Strategies

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  • BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and CSL Ltd (ASX: CSL) are three of the biggest shares on the ASX.
  • BHP would be the pick for long-term exposure to the resources sector.
  • Copper will be needed for electricity networks, renewable energy infrastructure, electric vehicles, data centres, and many other areas likely to attract investment over the coming decade.
  • BHP already owns assets and has the financial strength to continue investing, while weaker competitors may struggle.
  • BHP gives me exposure to resources that should remain important for decades, CBA is the Australian bank to most want to own, and CSL still has room to rebuild earnings after a period.

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BHP Group Ltd, Commonwealth Bank of Australia, and CSL Ltd are three of the biggest shares on the ASX.

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BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and CSL Ltd (ASX: CSL) are three of the biggest shares on the ASX.

All three have strong long-term investment cases, although for different reasons.

Here is why I would be happy to buy each of them today.

BHP would be the pick for long-term exposure to the resources sector.

The company already owns some of the world's largest mining operations, giving it a strong base from which to keep investing.

Iron ore remains a source of cash flow, but I am interested in where BHP's copper business could be heading.

Copper will be needed for electricity networks, renewable energy infrastructure, electric vehicles, data centres, and many other areas likely to attract investment over the coming decade.

Bringing new copper supply online can also take many years. BHP already owns assets and has the financial strength to continue investing, while weaker competitors may struggle.

Commodity prices can be volatile, so earnings will never be smooth. But I think BHP's scale and portfolio of long-life assets make it one of the ASX miners I would be most comfortable owning for years.

CBA is my preferred major Australian bank.

The company has built strong customer relationships across home lending, deposits, business banking, and everyday financial services.

I also think its technology gives it an advantage. The CommBank app has become central to how many customers manage their finances, making it easier for CBA to deepen those relationships and offer additional products.

That does not mean the bank will suddenly become a rapid-growth company. Australian banking is competitive, and CBA regularly trades at a premium valuation.

But the quality of the business can justify paying more than to for some of its rivals.

Add in the potential for fully-franked dividends, and I think CBA can offer investors a strong combination of income and capital growth.

CSL gives me a different opportunity.

The healthcare giant has been through a period, but the earnings outlook is improving.

CSL has positions in plasma therapies, vaccines, and specialist medicines, backed by a global collection network and operations that would be difficult to replicate.

The business also has opportunities to improve margins as productivity increases and some of the pressures that weighed on recent results ease.

CSL shares have already recovered from their lows, so the bargain available earlier this year has been missed. Even so, I still think the valuation leaves room for worthwhile returns if earnings continue growing over the next few years.

Yes, I think BHP, CBA, and CSL shares are all top buys today.

BHP gives me exposure to resources that should remain important for decades, CBA is the Australian bank to most want to own, and CSL still has room to rebuild earnings after a period.

I would be comfortable buying any of the three and giving the investment plenty of time to develop.

You are reading our version, not theirs. This is The Motley Fool Australia's report with its verdicts and loaded words taken out. Plain description stays, and so do adjectives that carry a fact, such as "former" or "federal". The reporting, the facts and the quotations are theirs — quotations are never edited — and the indicators beside it measure this version. Hover or tap Adjectives to see every one left in the text.

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Outlet Niral ScoreAdjectivesSentimentHappiness
The Motley Fool Australiaas they published this story 26.3 27 0.4 57.9
Mundane Readneutralized from The Motley Fool Australia 15.5 20 0.3 57.9

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