National Australia Bank Ltd.
With the RBA cutting interest rates by 0.25% recently, the prospects of the banking sector appear brighter. That's because it could have the effect of increasing demand for new loans, reducing defaults on current loans, and asset prices could rise as consumer and business confidence increases.
So, it is of little surprise that National Australia Bank Ltd. (ASX: NAB) is forecast to increase its bottom line at an annualised rate of 17% over the next two years. This is a stunning rate of growth and would be more than twice the growth rate of the wider index. So, while NAB is hardly cheap on a price to earnings (P/E) ratio of 15.9, it seems to offer value for money.
QBE Insurance Group Ltd
Of course, the rally that has taken place in the ASX since the start of the year is unlikely to continue indefinitely. High volatility could still be a prominent feature of the stock market as economic data has the potential to disappoint.
As such, QBE Insurance Group Ltd (ASX: QBE) could prove invaluable. That's because it has a beta of just 0.59, which means that its share price should move by just 0.59% for every 1% change in the level of the ASX, thereby providing a counterweight against a volatile index.
And, with QBE having a bright future as a result of a price to book (P/B) ratio of just 1.33 (versus an insurance sector P/B ratio of 2.18), it could see its share price move higher over the medium term.
Macquarie Group Ltd
Of course, one stock that does offer a significant margin of safety is Macquarie Group Ltd (ASX: MQG). That's because its shares offer very good value for money, since they currently trade on a price to earnings growth (PEG) ratio of just 1.11.
And, with Macquarie having posted an annualised total return of 15.6% over the last five years, it has an excellent track record of shareholder returns. Based on its outlook, Macquarie appears to be a stock that is worth buying at the present time.
