In this article, we discuss 5 best ASX stocks to buy heading into 2023. If you want to see more best ASX stocks to buy, the risk/reward, and methodology of this list, go directly to 10 Best ASX Stocks to Buy Heading into 2023.
5. Woolworths Group Limited (ASX:WOW.AX)
Market Capitalization as of 12/6 in Australian Dollars: 42.297 billion
Woolworths Group Limited (ASX:WOW.AX) is a leading food and general merchandise retailer in Australia with a market capitalization of A$42.297 billion as of 12/6. Although its shares have rallied from under A$25 in 2012 to A$34.23 now, the stock has declined 11.05% year to date given inflation and other headwinds. In the first quarter for financial year 2023, Woolworths Group Limited (ASX:WOW.AX)’s food business sales were below the prior year given COVID-related restrictions. E-commerce sales were also lower. In the long term, there’s still potential for growth if Woolworths Group Limited (ASX:WOW.AX) maintains its market share, however.
4. Wesfarmers Limited (ASX:WES.AX)
Market Capitalization as of 12/6 in Australian Dollars: 54.865 billion
Wesfarmers Limited (ASX:WES.AX) is an Australian conglomerate that’s the number one hardware chain in the country. Although shares of the stock have approximately doubled from 2012, Wesfarmers Limited (ASX:WES.AX) stock is down over 25% year to date given challenging inflation. Given the headwind, the company’s net profit for the year ended June declined 2.9% year over year to A$2.35 billion. If inflation normalizes, however, Wesfarmers Limited (ASX:WES.AX) has earnings growth potential in the long term. As of December 6, the company has a market capitalization of A$54.865 billion.
3. Macquarie Group Limited (ASX:MQG.AX)
Market Capitalization as of 12/6 in Australian Dollars: 68.322 billion
Macquarie Group Limited (ASX:MQG.AX) ranks #3 on our list of 10 Best ASX Stocks to Buy Heading into 2023 given its market capitalization of A$68.322 billion. Although there has been some volatility along the way, Macquarie Group Limited (ASX:MQG.AX) stock has done well in the long term and the financial services company is one of Australia’s most valuable companies as a result. Given the decline in many other financial stocks globally, Macquarie Group Limited (ASX:MQG.AX) stock is down 18% year to date. Nevertheless, the company still has potential if it maintains its market share in financial services.
2. National Australia Bank Limited (ASX:NAB.AX)
Market Capitalization as of 12/6 in Australian Dollars: 97.826 billion
National Australia Bank Limited (ASX:NAB.AX) is one of Australia’s largest banks whose shares haven’t rallied much since 2013. Nevertheless, the stock has a dividend yield of 4.95% at current prices and the company has attractive normalized earnings power in the long term given its scale and competitive advantages. If interest rates rise, the bank’s net interest income could potentially benefit. As of 12/6, National Australia Bank Limited (ASX:NAB.AX) ranks as one of Australia’s most valuable companies with a market capitalization of A$97.826 billion.
1. Commonwealth Bank of Australia (ASX:CBA.AX)
Market Capitalization as of 12/6 in Australian Dollars: 180.011 billion
Commonwealth Bank of Australia (ASX:CBA.AX) ranks #1 on our list of 10 Best ASX Stocks to Buy Heading into 2023 with a market capitalization of A$180.011 billion as of 12/6. Commonwealth Bank of Australia (ASX:CBA.AX) is one of the leading banks in Australia with substantial scale and competitive advantages. Although shares have not rallied much since 2013, the bank has a dividend yield of around 3.57% and the company could benefit from rising rates with more potential net interest income.
Commonwealth Bank of Australia (ASX:CBA.AX) CEO Matt Comyn said in a Q1 2023 trading update, “Consistent and disciplined execution of our strategy delivered strong financial and operational outcomes in the first quarter of FY23, highlighted by Cash NPAT of approximately $2.5 billion, 12% growth in operating performance and sound portfolio credit quality. In a competitive environment, we remained disciplined and achieved good volume growth in our core markets. Our capital position remained strong, with CET1 (Level 2) at 11.1%, following the payment of $3.6 billion in 2H22 dividends.”
You can also take a look at 15 Biggest Banks In The World and Ken Griffin Stock Portfolio: Top 10 Stock Picks.