Here Are 4 ASX Stocks to Buy in 2025 for Strong Returns!

Let’s take a look at 4 ASX Stocks to Buy in 2025!

In our view, the ASX will be best served by five diversified, large-cap ASX stocks that provide income, quality, and upside: Commonwealth Bank of Australia (CBA), BHP Group (BHP), CSL (CSL), and REA Group (REA). Each of these companies dominates its space, whether it be banking, resources, biotech, consumer staples, or digital real estate, and combines resilience with growth potential in a way few smaller firms can match.

Here Are 5 ASX Stocks to Buy in 2025!

Commonwealth Bank of Australia (CBA)

Commonwealth Bank dominates Australia’s retail and business banking sector, with a market capitalisation of approximately A$309.92 billion as of June 2025. Its shares surged around 19% in 2025, cementing its place as the biggest company on the bourse. The bank currently offers a forward dividend yield of 2.57%, depending on the timing and calculation method, supported by its fully franked interim dividend of A$2.25, paid in March 2025. CBA delivers a robust return on equity of nearly 13%, although this lags behind global heavyweights such as JPMorgan.

Despite its high valuation—around four times book value and 28 times forward earnings—CBA benefits from strong net interest margins, a loyal deposit base, a higher-margin loan book and operational simplicity. We believe it has caught the attention of global investors reallocating from uncertain US equities and seeking stability and yield in Australian banks. However, the elevated valuation carries risks: any unexpected dip in mortgage lending, margin erosion, or broader market correction could impact the share price. While we view CBA as a premium play on the Australian home-lending market, especially if more RBA cuts unfold in the latter half of 2025, investors must understand the potential volatility that comes with paying a premium for quality.

BHP (BHP)

BHP is a global mining behemoth and a strong income generator, with an interim dividend yield of about 5.3%, thanks to its US$0.50 per‑share payout in March 2025 (50% payout ratio). In its first-half results, BHP reported a 23% drop in underlying profit to US$5.1 billion, amid softer commodity prices, but maintained the dividend. This decision underscored the board’s confidence in the company’s balance sheet and long-term outlook.

Under CEO Mike Henry’s leadership, BHP is making a strategic pivot, focusing on medium-term investments in copper, with a reported capital expenditure of around US$3.2 billion for FY25 and maintaining iron-ore output around 255–265 Mt. We believe this shift moves the company away from cyclical iron-ore reliance toward future-facing commodities like copper, which are essential for electrification and green infrastructure.

That said, earnings remain exposed to commodity cycles. Any delay in the Chinese stimulus could weigh on BHP. Still, its diversified portfolio and sizable dividend make it a reliable cornerstone in an ASX portfolio that is acutely sensitive to global macro dynamics.

CSL (CSL)

CSL stands out as Australia’s leading biotech company, best known for its flu vaccines and blood plasma products – but it distributes other medicines too. FY2024 revenue of US$14.8 billion (up 11%) and a profit of US$2.91 billion (up 15%). It pays an interim dividend of US$1.30 (≈A$2.08) per share, roughly a 1.8% forward yield, with consistent, full distributions. The company expects FY2025 constant-currency revenue growth between 5% and 7%, with net profit anticipated to rise 10–13% to US$3.2–3.3 billion. It has also promised ‘double digit growth’ for the rest of this decades.

CSL is advancing in treatments for hereditary angioedema and pandemic-response vaccines, alongside efficiency gains in plasma collection via RIKA devices. While vaccine division results have shown some weakness, especially in the US, demand for immunoglobulin and pandemic-driven contracts from CSL Behring has offset that headwind. Analysts at Goldman Sachs and Morningstar continue to rate CSL as a “buy,” citing its resilient, recurring cash flows, wide moat, and robust R&D pipeline. CSL remains an outstanding blend of defensive stability and biotech-driven growth, well-suited for long-term investors.

REA Group (REA)

REA uses technology and scale to lead the online real estate advertising market, delivering strong financial results. In H1 FY25, it posted a 26% increase in interim profit, taking net profit to A$441 million and revenues to A$873 million, all from core operations. The interim dividend was up 26% to A$1.10 per share, reflecting confidence in earnings sustainability and a fully franked payout.

Market analysts, including Citi and Barrenjoey, have emphasised that REA’s significant audience reach, considerably larger than Domain’s, continues to drive its pricing power. Citi’s recent upgrade raised the price target by 15% to A$221. Core platform revenues climbed 11% in Q2 FY25, and national listings grew 7%, even amid tighter consumer sentiment. Total shareholder returns have been robust, comprising yield plus 24% EPS growth in FY24.

When combined with tech investment, recurring revenue, and high margins, REA offers investors a rare blend of growth and reliable yield. In our assessment, it remains one of the most compelling digital growth stocks in the ASX20.

Conclusion

What defines this selection of stocks to buy is quality. These stocks are not speculative fringe plays, but ASX-20 stalwarts with strong cash flows, investor credibility, and long-term strategic direction. CBA offers a portal into Australia’s financial system; BHP connects to global commodity cycles; CSL anchors biotech defence; and REA brings tech-enhanced service dominance. Together, they form a compelling, balanced portfolio aimed at delivering both income and sustainable growth in 2025 and beyond.

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FAQ

• Are these stocks good for both growth and income investors?

  Yes. Stocks like BHP and CBA offer strong dividend yields, making them attractive to income-focused investors. Meanwhile, CSL and REA provide robust long-term growth prospects, especially with their exposure to healthcare innovation and digital real estate.

• Is it too late to buy Commonwealth Bank given its high valuation?

  While CBA is trading at historically high multiples, it continues to deliver consistent earnings and solid returns on equity. However, the upside may be limited unless earnings are upgraded or the Reserve Bank eases rates significantly. It’s best suited for long-term investors seeking quality and stability.

• How does BHP’s strategy benefit investors in the long run?

  BHP is actively diversifying into future-facing commodities like copper and potash, which are critical for global electrification and agriculture. This strategic shift positions the company for sustainable growth beyond the cyclical iron ore market, providing investors with both yield and capital appreciation potential.

• Why is REA Group considered a strong pick despite a modest dividend?

  REA’s strength lies in its market dominance and high-margin digital advertising business. Its recurring revenue model, growing property listings, and strong brand loyalty create long-term compounding value, which can often outweigh a lower initial dividend yield.

• What role does Woolworths play in a balanced portfolio?

  Woolworths offers defensive characteristics, especially during economic downturns. Its core grocery business provides reliable earnings, while digital expansion supports future growth. For investors looking to hedge against volatility, WOW offers dependable returns and lower beta exposure.