Share price gains have become something of a rarity during the course of 2015. After all, the ASX has fallen by 6% since the turn of the year and, with fears surrounding China dominating the global economic outlook, similar declines across a number of indices across the world have been registered.
However, capital gains are not extinct. It may feel as though no stocks have risen this calendar year but, surprisingly, a number of ASX-listed companies have had a rather outstanding year.
Chief among them is fast food company, Domino's Pizza Enterprises Ltd. (ASX: DMP). Its shares have stormed ahead this year, rising by 53% as the company continues to deliver on its ambitious growth plan. This includes expanding into Asia, diversifying its menu and also adopting simple but yet effective marketing tools which hold considerable appeal among its target teenage and twentysomething market.
For example, Domino's has embraced social media, with it making a major play of its 'create your own' pizza option. This does exactly what it says on the tin but, crucially, Domino's makes it easy for customers to share their recipe with friends on social media, thereby creating additional, free marketing for the company. Furthermore, with Domino's expanding its menu options via products such as desserts and chicken, it is keeping existing customers interested in its brand, which can be a challenge for fast food companies as customer tastes naturally change over time.
As a result of the above, Domino's is posting exceptional growth rates, with its earnings rising by 35% last financial year and being forecast to increase by almost 25% per annum during the next two years. Such high rates of growth are very unusual among ASX stocks, which makes Domino's price to sales (P/S) ratio of 5.3 appealing – especially when the reliability of the company's earnings is taken into account.
Similarly, Ramsay Health Care Limited (ASX: RHC) has posted positive capital gains this year. Its shares are up 5% despite challenges in its important French market, where the government made unfavourable changes to pricing in recent months. This may have dampened sentiment in the stock somewhat but, looking ahead, Ramsay is still expected to post a rise in its earnings of 21% in each of the next two years, which puts it on a forward price to earnings (P/E) ratio of 22.3.
This may be higher than the ASX's P/E ratio of 14.9 but, unlike the ASX, Ramsay offers huge stability and resilience in the face of a downbeat economic outlook. As such, a premium seems to be deserved and, while it currently yields just 1.9%, Ramsay is expected to increase dividends by 16% per annum during the next two years. This means that the company has a fast-growing yield which could reach as much as 2.3% next year.
Meanwhile, rail freight operator, Aurizon Holdings Ltd (ASX: AZJ), has also beaten the ASX with a share price gain of 10% since the turn of the year. And, with earnings growth of 8% per annum being forecast for the next two years, investor sentiment could pick up further.
Certainly, it has a rather rich price to earnings (P/E) ratio of 17.4 but, with a track record of double-digit bottom line growth in recent years, it appears as though it deserves to trade on a relatively high valuation. And, with its recent results highlighting how successful it has been at cutting costs and generating efficiencies, there is scope for margin improvements moving forward so that even if revenue growth is somewhat subdued, Aurizon seems set to record impressive financial performance.
