Top ASX 200 stocks to watch in 2021

Australian banks and miners are often the most popular stocks on the ASX 200, but there are a range of potential growth stocks that can slip under the radar. Discover the different sectors and stocks that you might want to consider when trading the ASX 200.

Australia

We’ll look at multiple factors to pique your interest in ASX 200 firms and hopefully provide a helpful guide if you’re considering taking the plunge on individual Aussie stocks. We’ll cover the following subjects:

The ASX 200 key metrics

The ASX 200 is Australia’s leading stock market index; the shares listed account for 82% of the Australian Stock Exchange market capitalisation. The top fifty quoted companies in the ASX 200 account for approximately 75% of the index’s market capitalisation, and the top ten firms for 40% of the total market cap.

The ASX 200 finally reclaimed the 7000 level during the week ending April 16, 2021 - the first time since the March 2020 pandemic equity market sell-off took place. The record high of 7162 was printed on February 20, 2020.

When you trade the ASX 200 with us, you'll be able to go long and short - finding opportunities on the index and individual shares whether they're rising or falling. 

Open a trading account today to get started trading ASX stocks today.

ASX Mining and banking stocks overview

Mining and banking stocks dominate trading on the ASX 200 index. The two most significant companies in the ASX 200 measured by market capitalisation are materials and metals (mining) firms. Rio Tinto is number one with a market cap of approximately $172b, with BHP second at $167b.

Banks then occupy five places out of the top ten. In order of market cap as of April 21, 2021, they are Commonwealth Bank of Australia, Westpac, National Australian Bank, ANZ, and Macquarie.

With mining and banking share activity occupying such a considerable proportion of the market and index, no ASX 200 stocks to watch list and analysis can avoid including these two sectors.

  • If you’re a trader, the tighter spreads and reliable trading conditions can be a compelling reason to trade the most popular mining and banking stocks
  • If you’re an investor, you could enjoy dividends combined with blue-chip investment security

The globe needs the primary commodities Australian mining firms quarry and export. Copper, iron ore, coal, and gold are critical for manufacturing and production. According to the 2020 Brookings Institute report, China is the epicentre of global industrial growth, accounting for 20% in 2020, twice that of Japan.

The link between mining and banking in Australia is steadfast. It’s a crude analysis, but the Aussie economy relies on overseas income from clients such as China, who buy millions of tonnes of minerals carved out of the landscape each year. If trade is brisk, interest rates stay low, and commodity prices are still high, then (in theory) the stock price of miners should rise.

If China’s insatiable appetite for growth is maintained, then the Aus economy should continue to grow, and the banking sector will symbiotically thrive alongside mining. In summary, the Australian economy suffers when the Chinese economy stalls or finds reverse gear.

ASX 200 mining stocks in 2021

Iron ore traded at $178 on April 21, 2021, close to a 100% rise since March 2019. This stellar price rise suggests that leading industrial and manufacturing nations in Asia and beyond are stoking their fires with raw materials and producing finished products at pace.

Similarly, the price of copper has experienced a significant rise – from $2 an ounce in March 2020 to $4.27 on April 19, 2021. Often referred to as ‘Doctor Copper’ for its ability to illustrate the overall health of the global economy, copper is used extensively in the industrial process and manufacturing cycle.

The leading mining firms on the ASX have risen due to the price rise and demand for iron ore, copper, and other minerals. Several firms also extract fine earth minerals, used extensively in the manufacture of batteries for electric cars, computers, and mobile phones.

We’re listing three leading mining firms whose share price has risen sharply year-on-year and whose future looks promising for the remainder of 2021 and beyond. However, you can find opportunities whether the shares rise or fall in value when you trade with us. 

The BHP Group Ltd (ASX: BHP)

Founded in 1885, BHP’s headquarters are in Melbourne, Australia. The group engages in the exploration, production and processing of iron ore, coal, and copper.

Its petroleum activities include the exploration, development and production of oil and gas.

The firm mines copper, lead, zinc, uranium, silver, gold, and iron ore. Its coal activity focuses on both metallurgical and energy coal.

BHP key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

240.54b

Annual share price rise

57.10%

Year to date share price rise

9.67%

Dividend

4.34%

Share price

47.21

52-week range

28.76-50.93

P/E ratio

23.89

Rio Tinto Limited (ASX: RIO)

Headquartered in Melbourne, the firm traces its roots back to 1959. Rio Tinto Ltd. excavates and processes minerals like iron ore, aluminium, copper, and diamonds.

It exports iron ore pellets and high-grade concentrate. Its aluminium activity concentrates on bauxite mining and alumina refineries.

The copper and diamonds division produces gold, silver, and various by-products. The energy and minerals segment concentrates on uranium, salt, feedstock, and coal operations.

Rio Tinto key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

195.44

Annual share price rise

31.35%

Year to date share price rise

4.20%

Dividend

5.08%

Share price

120.09

52-week range

80.01 – 130.03

P/E ratio

14.00

Fortescue Metals Group Limited (ASX: FMG)

Fortescue develops and refines iron ore deposits. Fortescue is the fourth largest iron ore producer globally after BHP Billiton, Rio Tinto, and Vale.

The company has more than 87,000 km² of land in the Pilbara region of Western Australia, more extensive than both BHP Billiton and Rio Tinto.

John Andrew Henry Forrest founded the company in April 2003, and its headquarters are in East Perth, Australia.

Fortescue key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

65.24b

Annual share price rise

90.31%

Year to date share price change

-12.91%

Dividend yield

11.65%

Share price

21.60

52-week range

10.61-26.40

P/E ratio

7.31

ASX 200 banking stocks 2021

As mentioned above, the performance of the mining industry and the performance of the banking industry is inextricably linked. However, there’s more to the Aus economy than carving out vast chunks of minerals.

The Aus economy is as sophisticated as many G7 economies, and the banking sector has bounced back well from the seismic shocks the CV-9 pandemic caused from March 2020 onwards.

New Zealand and many Asian countries replicated the country’s excellent management of the pandemic, and the big four banks in Australia have navigated the crisis equally well.

With China recently publishing record quarterly growth figures, the future performance of the Aus banking sector looks secure.

Here are three banking stocks worth putting on your watch list for 2021. Whether they rise or fall in value, you'll be able to take advantage of their price movements with us. 

National Australia Bank Ltd. (ASX: NAB)

National Australia Bank is one of Australia’s four most prominent financial institutions measured by market capitalisation, earnings, and customers. Founded in October 1858, the headquarters are in Melbourne, Australia.

The company operates five divisions: consumer banking & wealth, business & private banking, corporate & institutional banking, NZ (New Zealand) banking, and corporate functions.

NAB key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

87.58b

Annual share price rise

67.58%

Year to date share price change

14.30%

Dividend yield

2.25%

Share price

26.21

52-week range

15-27.1

P/E ratio

33.04

Westpac Banking Corp. (ASX: WBC)

Westpac Banking Corporation, known simply as Westpac, is headquartered in Sydney, Australia. Established in 1817 as the Bank of New South Wales, it acquired the Commercial Bank of Australia in 1982. Its name is an amalgamation of ‘Western’ and ‘Pacific’.

The corporation is one of Australia’s big four banks and the first and oldest banking institution.

Westpac key metrics as of April 21, 2021 (figures quoted in (AUD)

Market cap

92.91

Annual share price rise

64.67%

Year to date share price change

27.25%

Dividend yield

1.22%

Share price

24.98

52-week range

14.53-25.52

P/E ratio

33.04

Bank of Queensland (ASX: BOQ)

Founded in 1874, Bank of Queensland is an Australian retail bank with headquarters in Brisbane, Queensland. The bank began as a building society and is one of the oldest financial institutions in Queensland, and it has 160 branches throughout Australia.

Bank of Queensland key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

5.68b

Annual share price rise

96.89%

Year to date share price change

20.78%

Dividend yield

0.00%

Share price

9.10

52-week range

4.37-9.44

P/E ratio

26.67

ASX 200 growth stocks in 2021

When we think of e-commerce, our first thoughts turn to the FAANG stocks or engorged FAATMAN stocks listed on the tech NASDAQ 100 index.

However, Australia has a burgeoning, disruptive e-commerce sector with many pioneering firms at the frontline of innovation.

  • Afterpay is exploiting the buy now pay later space where firms such as Klarna have blazed a trail
  • Zip is a payments service provider offering online and in-store payment facilities, which are cheaper and more efficient for merchants than the established firms.
  • NEXTDC operates data centres, a business and sector that grows in line with the two previously mentioned firms and all other industries requiring data storage

We go into more detail on the three firms here; none are paying out dividends yet. You can speculate on whether these shares will rise or fall in value with us. 

Afterpay Ltd. (ASX: APT)

The company was founded by Nicholas David Molnar and Anthony Mathew Eisen in July 2017 and is headquartered in Melbourne, Australia.

Afterpay Ltd. provides technology payments solutions. It operates through the following divisions: After Pay AU, After Pay U.S., After Pay Other, Pay Now, and Corporate. The Pay Now service offers mobility, health, and e-services.

Afterpay key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

36.51b

Annual share price rise

347.9%

Year to date share price change

3.24%

Dividend yield

0.00%

Share price

121.9

52-week range

25.67-160.0

P/E ratio

26.67

Zip Co Ltd. (Z1P: ASX)

The company was founded in June 2013 and is headquartered in Sydney, Australia.

Zip Co. Ltd. provides integrated payment solutions for online and in-store merchants across numerous industries.

It offers point-of-sale credit and digital payment services to consumers and merchants.

The ZIP AU division offers consumers a line of credit in a wallet, including the consolidated entity’s Pocketbook operations.

The SpotCap division provides unsecured loans to small and medium-sized businesses.

Zip key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

4.94b

Annual share price rise

351%

Year to date share price change

56.53%

Dividend yield

0.00%

Share price

8.75

52-week range

1.81-14.53

P/E ratio

N/A

NEXTDC Ltd. (NXT: ASX)

Founded by Bevan Andrew Slattery in May 2010, the firm’s headquarters are in Brisbane, Australia.

NextDC Ltd. develops and operates secure and scalable datacentres. The firm enables business transformation through data centre outsourcing solutions, connectivity services and infrastructure software. It provides services such as confidential data suites, blocks and racks.

NEXTDC Ltd. key metrics as of April 21, 2021 (figures quoted in AUD)

Market cap

5.41b

Annual share price rise

38.69%

Year to date share price change

-4.37%

Dividend yield

0.00%

Share price

11.83

52-week range

8.1-14.1

P/E ratio

N/A

The highest dividend-paying stocks in the ASX 50

Investors and traders buy shares in companies for two reasons; to make a profit selling at a higher price at a future date and to get dividends.

Dividends can make up a sizeable proportion of the returns you can get from investing in companies. For that reason, dividends get regarded by many investors as a critical reason for owning stock.

If you buy a share using a CFD (Contract for Difference) the position may get adjusted due to dividends. As a trader, it’s still worth assessing the dividends that a company is due to give out to shareholders, as they can provide vital insights into the company’s outlook.

Although value stocks are more likely to pay dividends, you shouldn’t rule out high growth stocks if you’re after these annual payments, there are many high growth stocks that also pay dividends.

Here is a list of quoted firms in Australia paying the highest dividends. The table shows the ten highest dividend-yielding stocks in the ASX 50 based on gross dividends.

Ticker

Stock name

Sector

Dividend

2020-2021

Dividend yield

FMG

Fortescue Metals Group Ltd

Materials

$3.53

11.47%

AGL

AGL Energy Ltd

Utilities

$1.09

10.06%

AZJ

Aurizon Holdings Ltd

Industrials

$0.37

7.27%

RIO

Rio Tinto Ltd

Materials

$10.48

6.11%

ORG

           

Origin Energy Ltd

Energy

$0.22

5.49%

DXS

Dexus

Real Estate

$0.54

5.09%

APA

APA Group

Utilities

$0.55

5.08%

GBT

GPT Group

Real Estate

$0.22

4.92%

SGP

Stockland

Real Estate

$0.22

4.87%

TLS

Telstra Corp Ltd

Communication Services

$0.23

4.73%

Conclusion

Whether you’re a trader or investor, the companies mentioned above might offer up contrasting opportunities to consider.

Growth stocks are inherently riskier than the value stocks such as miners and banks. Many investors consider spreading their risk by apportioning a weighted percentage to their portfolio, less in riskier assets like the growth stocks and a higher percentage rate in safer investments that pay regular dividends. In doing so, they believe their risk versus reward is balanced.

Many traders look for trading volume leading to increased volatility from which price action patterns can develop. They also look for tight spreads, and the most traded securities typically have the tightest market spreads.

Our best buy suggestions are just that, and they’re not recommendations. All the typical caveats apply when you’re investing and trading, including the advice to DYOR (do your own research).

Open a trading account today to get started trading ASX stocks today.


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