For investors who prioritize lower-risk opportunities yet seek potential for substantial returns, two ASX value stocks currently stand out as excellent choices. Both APA Group and Telstra Group Ltd offer stability and growth prospects that make them particularly attractive.
APA Group (ASX: APA) APA Group is a prominent player in the energy infrastructure sector, renowned for its diverse and extensive portfolio. The company owns and operates a $27 billion collection of assets, including gas, electricity, solar, and wind infrastructure. This broad portfolio not only provides a defensive shield against market volatility but also ensures predictable and consistent earnings. Over nearly two decades, APA Group has maintained a strong track record of steady earnings and reliable dividend growth.
The current analysis indicates that APA Group’s shares present a promising opportunity for investors. With the share price currently at $7.92, there is an anticipated upside potential of approximately 19% over the next year. Analysts project dividends of 56 cents per share for FY 2024, with an increase to 57.5 cents per share anticipated for FY 2025. These projections translate to attractive dividend yields of 7.1% and 7.25%, respectively. The company's stable and predictable earnings, coupled with its robust dividend payouts, make APA Group a noteworthy choice for risk-averse investors looking for dependable returns.
Telstra Group Ltd (ASX: TLS) Telstra Group Ltd is a leading telecommunications company with a solid reputation for stability and reliability. As a major entity in the defensive telecommunications sector, Telstra benefits from consistent demand for its services, contributing to stable earnings and dividend growth. The company's strategic moves, such as the potential monetization of its InfraCo Fixed assets, could unlock substantial value, with estimates suggesting these assets could be worth between A$22 billion and A$33 billion.
The outlook for Telstra’s shares is also positive. At the current share price of $3.95, there is a projected upside of about 9% over the coming year. Analysts forecast fully franked dividends of 18 cents per share for FY 2024, with a slight increase to 19 cents per share expected for FY 2025. These forecasts result in yields of 4.6% and 4.8%, respectively. The steady dividend payments and potential for value creation through asset monetization make Telstra a compelling option for investors seeking stability coupled with growth potential.
APA Group and Telstra Group Ltd emerge as standout choices for those seeking a lower-risk investment with the potential for attractive returns. APA Group’s extensive and diverse asset base ensures reliable income, while Telstra’s strategic initiatives and solid market position provide a stable foundation for future growth. Both stocks offer a blend of stability and potential upside, making them worthy of consideration for a well-rounded investment portfolio.