The 10 most-tipped large-cap stocks for 2023

The most-tipped large cap stocks return for the 8th year. Find out which stocks made your top 10 and which prodigals returned from hiatus.
Sara Allen

Livewire Markets

The results of the 2023 Outlook Series survey highlight a couple of important themes when it comes to your favourite large-caps. First and foremost, the great Australian love affair with mining companies is far from over. And why would it be? The likes of BHP Group (ASX: BHP) and Woodside Energy Group (ASX: WDS) had stellar years in 2022 and are consistent dividend payers.

This year’s results also saw some big names return to the list after a hiatus in 2022. Some new entrants from last year fell off the radar. And a new name, with big potential, surged into the Top 10. Outside of metals and mining, financials, healthcare and tech dominated in terms of sector representation, showing that as much as things change, they stay the same. 

In that vein, it's worth reiterating that Livewire readers are investors for the long term. Your choices have been broadly consistent over time - which is none more evident when it comes to the number one most-tipped large cap. 

This year, more than 3,000 readers participated in the survey - making you a part of one of Australia's most extensive and significant investor polls. I know you're keen to see the results, but before we dive in, please note the following disclaimer...

By publishing this list, we are sharing information from the Livewire readership. We hope it inspires ideas for your investment research. This information is not, nor is it intended to be, a set of recommendations. Please do your own research and seek advice from a professional.

Large caps at a glance

  • The average market capitalisation of the 10 companies is A$84.2 billion at the time of writing. This is up from A$72 billion last year.
  • The top three stocks received approximately 20% of the votes. By contrast, the top three represented 12% of votes last year.
  • Last year’s three new additions of Wesfarmers (ASX: WES), Aristocrat Leisure (ASX: ALL) and Westpac Banking Corporation (ASX: WBC) all dropped off the list this year.
  • Commonwealth Bank of Australia (ASX: CBA) and Xero (ASX: XRO) both returned after a 1-year hiatus and Allkem (ASX: AKE) is the new addition to the list.
  • Woodside offered the best returns of 2022, delivering 55.89%.
  • Half of the list had negative returns in 2022.

#10. Commonwealth Bank (ASX: CBA)

Market capitalisation: A$170.61 billion
Percentage of overall votes: 1%

1-year performance CBA v S&P/ASX200

Source: MarketIndex, 4 January 2023
The largest of Australia’s Big Four banks has returned to the fold this year.

It posted solid results in 2022, even if these were below analyst expectations. 

Sean Sequeira of Australia Eagle Asset Management ranks CBA as the highest quality of the big banks. He points to its size and retail market share as the key qualities to watch out for.

“CBA is the largest and most well-constructed of the big four banks. The systems and structures set in place by management have set the company up to be the best prepared of its peers to ride out the short term volatility that may result from the unpredictable external environment,” he says.

#9 Allkem (ASX: AKE)

Market capitalisation: A$7.04 billion
Percentage of overall votes: 1.04%

1-year performance AKE v S&P/ASX200

Source: MarketIndex, 4 January 2023

Allkem is a new addition to the Top 10, but this shouldn’t come as much of a surprise. After all, lithium has been an undeniable theme in recent times. Demand should continue to drive returns in coming years, given lithium’s essential place in the battery technology and electric car transition.

Allkem is a specialty lithium chemicals company headquartered in Argentina. Its portfolio includes lithium brine operations in Argentina, a hard-rock lithium operation in Australia, and a lithium hydroxide conversion facility in Japan. It recently added to its Argentina operations in December with the acquisition of the Maria Victoria Lithium tenement from Minera Santa Rita S.R.L.

Allkem was one of Macquarie’s six overweighted lithium stocks last year. You can read more here.

#8 Fortescue Metals Group (ASX: FMG)

Market capitalisation: A$62.81 billion
Percentage of votes: 1.27%

1-year performance FMG v S&P/ASX200

Source: MarketIndex, 4 January 2023
Low-cost iron-ore producer Fortescue ships over 180 million tonnes of iron ore annually and has three mining hubs in the Pilbara, WA. The coming year will also see Fortescue’s first production from its Iron Bridge Magnetite Project.

It is also actively turning towards green energy, focusing on green hydrogen via its subsidiary Fortescue Future Industries (FFI).

Late last year, FFI made several announcements on this front, including a partnership with ATCO to unveil Western Australia’s first green hydrogen refuelling station, a partnership with the Ministry of Energy of the Republic of Azerbaijan to study and develop green hydrogen and renewable energy projects in Azerbaijan, and a partnership with Puget Sound Energy to explore and develop green energy across the Pacific Northwest.

#7. Xero (ASX: XRO) (tie with Pilbara)

Market capitalisation: A$10.53 billion
Percentage of votes: 1.94%

1-year performance XRO v S&P/ASX200

Source: MarketIndex, 4 January 2023

Xero was another of the prodigals to return to the Top 10 this year. It’s the only company from the technology sector to be included in the list and perhaps a surprise inclusion given its struggles in 2022.

The New Zealand-based company offers online accounting software to small and medium-sized businesses in Australia, New Zealand, the US and the UK. A subscription-based model is expected to continue to support revenue in the future, along with a continued trend towards cloud adoption by businesses.

Xero was one of the nine most painful fundie calls in 2022 with its cost base a major problem. You can read more from our fundies on this here.

“We did sell down and now we're looking to add to it. Sukhinder Singh Cassidy is coming on. We've met her, the new CEO, and we like what we are hearing from her, but we want to see what her plan is before we push the lever in terms of buying more.” Catherine Allfrey, Wavestone Capital 

#6. Pilbara Minerals (ASX: PLS) (tie with Xero)

Market Capitalisation: A$10.85 billion
Percentage of votes: 1.94%

1-year performance PLS v S&P/ASX200

Source: MarketIndex, 4 January 2023
Another one for the lithium playbook, Pilbara Minerals is the largest lithium producer on the ASX. It also holds 100% of the world’s hard-rock lithium operations.

Kardinia Capital rated Pilbara Minerals as one of its stocks to hold for the next five years. Read here.

“Pilbara offers high-quality exposure to the green energy transition via its long life (26+ years) and low-cost lithium mines in Western Australia. The strong rally in lithium prices – as demand outweighs supply – has resulted in the company generating extraordinary cash flows…The company now sits on a cash balance of $1.4b and appears fully funded for all announced growth plans.” Kristiaan Rehder, Kardinia Capital.

#5. Woodside Energy Group (ASX: WDS)

Market Capitalisation: A$67.1 billion
Percentage of votes: 2.31%

1-year performance WDS v S&P/ASX200

Source: MarketIndex, 4 January 2023
Australia’s biggest oil and energy company had a stand-out year in 2022, returning the best 1-year performance of the Top 10, at 55.89%.

Several analysts cut their ratings for Woodside late last year, though Citi maintains a BUY rating.

Woodside’s performance may be threatened by the Australian Federal Government's proposal to introduce a new gas market code in February 2023. This is an effort to reduce cost of living pressures for Australians. It will continue to benefit from international partnerships however, such as those announced in December with Western Gas and Qenos.

#4. Mineral Resources (ASX: MIN)

Market Capitalisation: A$14.25 billion
Percentage of votes: 2.98%

1-year performance MIN v S&P/ASX200

Source: MarketIndex, 4 January 2023

The WA-based mining company operates across multiple commodities, with lithium and iron ore in the mix. The stage has been set for a big year, with Mineral Resources currently negotiating an off-market takeover of Norwest Energy (ASX: NWE).

In this particular company, Livewire readers share their convictions with one of our fund managers Romano Sala Tenna from Katana Asset Management. He ranks it as his top pick for 2023 and says the coming two years will be exciting for the business.

“It's a top-five lithium producer globally, but they're moving into hydroxide. And we think over the next two years they'll increase that by a factor of about 10, and that's the high-margin product, of course. They're also a top-five iron ore producer, and they're bringing on a 35 million tonne of per annum production at $40 FOB, which is profited through the cycle,” he says.

You can read the full story here: 

The #1 stock picks for 2023

#3. Macquarie Group (ASX: MQG) (tied with BHP Group)

Market Capitalisation: A$63.64 billion
Percentage of votes: 6.33%

1-year performance MQG v S&P/ASX200

Source: MarketIndex, 4 January 2023

The ‘millionaire factory’ has been popular with readers for some time now. It is usually popular with fund managers too. MarketMeter’s research saw it consistently ranked in the top 10 for categories including earnings quality, CEO effectiveness, investment desirability, companies with MOATs, sustainability reporting, and growth prospects.

Sean Sequeira has a high conviction BUY on Macquarie, with its infrastructure expertise a significant factor in his views.

Similarly, Dr Don Hamson, Plato Asset Management, has a positive view of Macquarie’s prospects (along with two other top-10 picks).

“We think a number of companies in the resources and financials sectors are likely to continue to be strong and sustainable dividend payers into 2023. Woodside Energy, BHP Group and Macquarie are three examples,” he said.

#2. BHP Group (ASX: BHP) (tied with Macquarie)

Market Capitalisation: A$299.48 billion
Percentage of votes: 6.33%

1-year performance BHP v S&P/ASX200

Source: MarketIndex, 4 January 2023
The Big Australian paid record dividends in 2022 and remained a strong performer off the back of high commodity prices.

It continues to position itself for the future, with a successful takeover bid for gold and copper miner Oz Minerals (ASX: OZL) in late December 2022. The bid has been approved by Oz Mineral’s board but is yet to be approved by shareholders.

While positioning itself in the green metals space, BHP continues to benefit from supply/demand dynamics in the iron ore space. China’s decision to reopen and end its zero-covid policy may also see a benefit to iron ore prices too.

Kingsley Jones, Jevons Global recently compared the iron ore miners listed on the ASX, ranking BHP as his core holding, despite some valuation opportunities in other players.

The Running of the Pilbara (Iron Ore) Bulls

And drumroll…. Your most-tipped stock for 2023…

#1. CSL (ASX: CSL)

Market Capitalisation: A$135.86 billion
Percentage of votes: 7.44%

1-year performance CSL v S&P/ASX200

Source: MarketIndex, 4 January 2023
Market darling CSL has topped the list for the fifth year running.

Healthcare stocks have had a challenging year and CSL’s share price has suffered, though it’s not a stretch to say that this is no reflection of the underlying fundamentals of the company. It is positioned for a big year ahead, with the successful acquisition of Vifor and the FDA approval of its haemophilia drug last year.

While its CEO of a decade, Paul Perreault, is set to step down in March, the planned six-month transition where he will continue to act as a consultant to CSL is expected to support incoming CEO Dr Paul McKenzie. McKenzie has also been COO for CSL since 2019.

CSL’s dominance in the flu vaccine and blood plasma space, along with continued research and innovation into other healthcare concerns, should be supportive of a strong 2023.
“Their plasma collections business usually benefits from an economic downturn as individuals will look to alternative income sources such as donating plasma for a payment,” says Tim Montague-Jones, ASR Wealth Advisers.

The full list

Did your call make the top 10 or were you surprised by the list?

Let us know in the comments below.

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Sara Allen
Content Editor
Livewire Markets

Sara is a Content Editor at Livewire Markets. She is a passionate writer and reader with more than a decade of experience specific to finance and investments. Sara's background has included working at ETF Securities, BT Financial Group and...

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