Brickworks Ltd (ASX: BKW) shares look like one of the best choices in the ASX 200 in 2025, in my opinion.
It’s not a high-flying technology business, but I think it’s great value and has a lot of potential to deliver returns for two reasons.
Eventual demand rebound
A lot of investor confidence (or pessimism) about Brickworks shares relates to its building product division which includes bricks, pavers, stone, roofing and more. I think this is a major part of why the Brickworks share price has fallen by 17% from March 2024.
Understandably, building product demand is weaker amid this period of high interest rates.
But, I believe at some point the cycle will turn, with a potential eventual interest rate cut or two. This could excite the market about the business.
Strong industrial property demand
A key reason why I like this ASX share is its large investment in land and property.
It owns a 50% stake of an industrial property trust alongside partner Goodman Group (ASX: GMG). This trust owns huge warehouses leased to major customers like supermarkets, e-commerce companies and logistics businesses. There is strong demand for these types of facilities and well-placed land is hard to find, boosting the rental and capital value.
Brickworks has earmarked more land for sale into the property trust. This can drive future rental growth and value creation for Brickworks when new warehouses are built on this land, improving how much the land is worth.
The industrial properties give a lot of valuation backing for Brickworks shares and also helps fund growing dividends.
I recently bought Brickworks shares and I’m planning to buy more.
I haven’t even mentioned the investment division, which also provides stability and dividend growth for Brickworks to fund its own dividend.
Final thoughts on Brickworks
Brickworks is an appealing option with a lot of room for growth and the ability to keep driving dividends higher. It hasn’t cut its dividend for almost 50 years, which sounds good for Aussies looking for secure income.
I think it’s one of the leading ASX dividend shares out there so it could work in a portfolio.
