Invest in Quality and Watch Your Money Grow: Morgan’s Prime Selections of ASX 100 Stocks

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Morgans meticulously handpicks the most lucrative ASX share investments with a favourable risk-reward ratio and an above-average level of trustworthiness for the next 12 months.

Aristocrat asx

Morgans enthusiastically recommend gaming technology giant Aristocrat Leisure as an outstanding buy for the first share in the ASX 100.

Highly appreciating the company’s robust balance sheet, superior leadership position, and potential actual money gaming opening, the broker has expressed enthusiasm for this venture.

ALL is a global market leader in the rapidly-growing land-based and mobile gaming industries. It has delivered revenue growth of 17% pa over the past five years, and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments.” Morgans explained.

Demand for its gaming machines and digital games is resilient to economic cycles, though it has slowed in recent months, leading the share price down. ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September.” Morgans further explained.

With $3.3bn of currently available liquidity, ALL has significant funding capacity for growth, even after the buyback. It has a stated ambition to build a meaningful presence in the rapidly-growing online real money gaming segment, which we believe may be achieved through organic investment and inorganic acquisitions.” Morgans added. 

Westpac, Australia’s oldest bank and part of the ASX 100 list, has been highlighted by a broker as an attractive option for both return-on-equity seekers and income investors. Furthermore, its fully franked dividend yield appeals to those chasing regular cash flow.

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful,” Morgans said.

“The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.” Morgans added.

Morgans anticipates Westpac to offer a robust 6%+ dividend yield in FY 2023, with an “add” rating and a $25.80 price target on its shares.

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