National Australia Bank Ltd. (ASX: NAB), BHP Billiton Limited (ASX: BHP) and Coca-Cola Amatil Ltd (ASX: CCL) are amongst Australia's most popular stocks and each offer a solid dividend yield. However, each of these blue chips are also facing strong headwinds in their respective industries. So are any of them worth your investment dollars today?
National Australia Bank
Investors could be forgiven for thinking that National Australia Bank is the most appealing buy of the big four banks. Although it has outperformed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) over the last five years, it has significantly lagged the returns made by its major rivals. It is now trading on a lower P/E ratio and price-book ratio, and offers a far superior fully franked dividend yield of 6%.
While it might appear to be a cheaper buy than its rivals, investors need to remember NAB's struggling UK divisions, which have acted as a drag on overall group earnings for years, as well as its disappointing returns from the local market (compared to its rivals). Until NAB can improve its game, I'm certainly steering clear of the stock.
BHP Billiton
Declining confidence in the mining sector, as well as plummeting iron ore and coal prices, have seen shares in Australia's largest diversified miner drop marginally this year. And while there are signs to suggest the two resources will continue to drop in price over the coming months, the short term could well remain a bumpy ride for shareholders.
Despite these headwinds, BHP Billiton has earned a position on my watchlist and, should it pull back in price even by a few dollars, I would strongly consider hitting the 'Buy' button. Aside from offering an attractive 3.4% fully franked dividend yield, its exposure to the coal and potash markets fares well for its ultra-long term prospects.
Coca-Cola Amatil
Shares in the beverage manufacturer have dropped substantially over the last 12 months or so and are now trading at just $9.40. The last time they were trading this low was back in 2009 as they were recovering from the GFC!
Although shareholders have every reason to be disappointed with the stock's recent performance, I believe this is a fantastic opportunity to either buy or add to an existing position in the stock. The problems facing the business appear to be short-term in nature and the long-term returns could reward those who choose to remain patient. I bought a stake recently and am strongly considering buying more in the near future.
