10 Best Performing Stocks in Australia 2023
As the financial curtain draws to a close on 2023, investors are keen to reflect on the champions of the Australian Securities Exchange (ASX) that have defined resilience and growth in a year marked by dynamic economic challenges.
From innovative tech juggernauts to robust industrial players, the ASX has showcased a breadth of success stories. In this comprehensive review, we spotlight the 10 best-performing Australian stocks that not only soared in value but also exemplified strategic vision and market tenacity.
These top-tier contenders have outpaced their peers, delivering impressive returns and solidifying their stature in the portfolios of savvy investors. Below, we present an exclusive snapshot of those 10 market leaders, followed by an in-depth exploration of each company's performance, market capitalization, and fundamental ratios that underscore their investment allure.
10 Best Performing Stock in Australia 2023
1. James Hardie Industries plc (JHX)
Market Cap: AU$23.96B
PE Ratio (TTM): 31.7
PB Ratio: 9
YTD: +108.45%
Surging to the forefront as the top performer on the ASX in 2023, James Hardie, the prominent manufacturer of plasterboard and wall cladding materials, has achieved a remarkable 108% increase in its stock value as of December 21st. Following a period of downturn between August and October, the company's share price has experienced a notable recovery, climbing 40% since the beginning of November. This resurgence is tied to the recent dip in US mortgage rates, which have seen a reduction exceeding one percentage point over a span of eight weeks. In a recent development, the Federal Reserve indicated a halt to its series of interest rate hikes, with intentions to consider rate reductions in 2024. This anticipated move towards lower interest rates is projected to stimulate various segments of the US housing market, a sector from which James Hardie generates its principal earnings.
2. Seven Group Holdings Ltd (SVW)
Market Cap: AU$12.99B
PE Ratio (TTM): 21.6
PB Ratio: 3.3
YTD: +108.45%
The stock value of Seven Group has also exhibited a significant uptrend in recent months. As a diverse entity that operates and invests across various sectors, Seven Group has holdings in industrial services, media, and energy. A central component of Seven's industrial services division is Boral Ltd, which itself has made a notable impression on the ASX this year with an 81% increase in its share price. While Boral independently listed on the ASX, Seven Group holds a 72% majority of the issued shares, thereby asserting a dominant influence. Specializing in the provision of building materials such as cement, concrete, and asphalt, Boral is responsible for contributing 36% to SGH's overall revenue.
3. Rea Group Ltd (REA)
Market Cap: AU$23.71B
PE Ratio (TTM): 66.6
PB Ratio: 16.1
YTD: +57.71%
The stock price has jumped 62.01% since the beginning of the year. REA Group Ltd is a global online real estate advertising company headquartered in Melbourne, Australia. The company specializes in digital advertising services and operates various residential, commercial, and share property websites. The significant growth of REA Group Ltd's stock this year can be attributed to its strong financial performance. Despite facing challenges, REA Group's revenues have exceeded analyst expectations. Looking ahead, REA Group's revenue is forecast to grow by an average of 8.8% per annum over the next three years.
4. Xero (XRO)
Market Cap: AU$17.09B
PE Ratio (TTM): Loss
PB Ratio: 15.5
YTD: +57.71%
Xero is a New Zealand-based technology company that specializes in cloud-based accounting software for small and medium-sized businesses. According to Xero's FY 2023 financial results, the company experienced a 28% increase in operating revenue, reaching $1.4 billion. This growth in revenue contributed to a 45% increase in adjusted EBITDA compared to the previous fiscal year. Xero saw an increase in its total subscribers by 470,000, reaching 3.95 million. The annualised monthly recurring revenue (AMRR) also grew by 26%. This growth underscores the trust customers place in Xero's services.
5. Reece (REH)
Market Cap: AU$14.29B
PE Ratio (TTM): 36.8
PB Ratio: 3.9
YTD: +56.93%
Reece Limited specializes in the distribution of plumbing, waterworks, bathroom, heating, ventilation, air-conditioning, and refrigeration products. Reece's business model involves supplying a wide range of products and solutions for plumbing and bathroom fittings, as well as heating and cooling systems. Their product range caters to both the professional trade sector and retail customers, providing a variety of products for construction, renovation, and maintenance projects. Reece reported a significant increase in revenue for the full year 2023, with revenues reaching $8.86 billion, up 16% from the previous fiscal year. This growth exceeded analyst expectations, demonstrating the company's strong performance in its operational sectors.
6. Car Group Ltd (CAR)
Market Cap: AU$11.6B
PE Ratio (TTM): 17.0
PB Ratio: 3.7
YTD: +51.38%
CAR Group Limited, previously Carsales.Com Ltd, is an Australian online marketplace for automotive, motorcycle, and marine vehicles. Offering services for buying and selling vehicles, the company operates in Australia and has expanded internationally, including North America, Latin America, and Asia. In FY2023, CAR Group displayed impressive financial results with an 18% rise in revenue to $781 million and a 43% increase in adjusted net profit after tax to $278 million. They also completed the acquisitions of the Trader Interactive in the US and Webmotors in Brazil. The company has consistently paid increasing dividends, with the latest at $0.65 per share. Looking ahead, CAR Group anticipates further revenue and EBITDA growth in FY24 across all divisions. The company's success is not just limited to its dominant presence in Australia but is also reflected in its expanding global footprint, making it a key player in the online vehicle sales market worldwide.
7. Fortescue Ltd (FMG)
Market Cap: AU$87.9B
PE Ratio (TTM): 12.2
PB Ratio: 3.2
YTD: +50.47%
Fortescue Ltd, an Australian mining company, has seen its shares reach all-time high in 2023, driven by soaring iron ore prices. Fortescue specializes in the extraction and processing of iron ore and has expanded into exploring for other minerals like copper, gold, and lithium, operates major mining hubs and owns extensive rail and port infrastructure. Fortescue has recently shifted its branding from Fortescue Metals Group Limited and is also investing in green energy solutions. The market is optimistic about China's economic recovery and its property sector's resurgence, which had previously lagged in the post-pandemic period. This optimism is further fueled by reports of increased housing transactions and the prospect of steel mills restocking iron ore, leading industry analysts to predict a continued upward trend in iron ore prices.
8. NextDC Ltd(NXT)
Market Cap: AU$6.9B
PE Ratio (TTM): Loss
PB Ratio: 3.0
YTD: +47.25%
NEXTDC Ltd, established in 2010 and based in Brisbane, specializes in constructing and managing advanced, independent data centers across Australia. Serving as connectivity hubs, they offer businesses comprehensive colocation solutions, including eco-friendly data center operations and network services, with a focus on sustainable practices. NEXTDC reported a 25% revenue increase to $362.4 million and a 15% rise in EBITDA to A$193.7 million for FY23. The company saw a 47% surge in contracted utilization to 122.2 megawatts, highlighting strong demand in colocation and cloud services. Despite a net loss due to increased costs, NEXTDC's sales soared, particularly from key partners in the network and enterprise sectors. The company is poised for future growth, with $2.3 billion in liquidity and significant investments in AI-driven applications and cloud computing. NEXTDC expects revenues of $400 to $415 million and an EBITDA of $190 to $200 million for FY 2024, as it continues to expand both domestically and internationally.
9. WiseTech Global Ltd(WTC)
Market Cap: AU$25.1B
PE Ratio (TTM): 116.5
PB Ratio: 13.2
YTD: +46.50%
WiseTech Global Limited is an Australian company that provides cloud-based logistics software solutions globally, including the CargoWise platform, which streamlines storage and transaction processes for over 18,000 customers in over 170 countries. Its comprehensive software supports multiple languages and currencies and is delivered primarily through cloud-based data centers. In 2023, WiseTech Global achieved remarkable success, largely due to its CargoWise One platform's significant role in the global logistics industry. The platform's revenue soared by 50% to $289.2 million, accounting for a substantial part of the company's total revenue. The company's full-year results reveal a 29% increase in revenue and a 101% surge in underlying net profit after taxes, with dividends also rising by 31%. However, WiseTech's share price experienced a steep drop after its 2024 guidance disappointed investors, reflecting lower-than-expected EBITDA projections.
10. Cochlear Ltd(COH)
Market Cap: AU$19.6B
PE Ratio (TTM): 65.6
PB Ratio: 11.2
YTD: +46.37%
Based in Sydney, Cochlear Limited stands out as a premier provider of medical devices, notably excelling in the creation of innovative cochlear, electro-acoustic, and bone conduction implants. With a commanding 50% share of the cochlear implant market, the company has garnered recognition for its inventive contributions, earning accolades both domestically and internationally. The company's stock has witnessed a remarkable 46.37% increase year-to-date. This uptick is linked to Cochlear's robust financial performance, which includes a 10% rise in underlying net profit to $305 million for the fiscal year 2023, and the company anticipates a further 16% to 23% profit growth for the fiscal year 2024.