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3 property shares to hammer investment property returns

The property market has done very well over the last few years, but there are beginning to be signs that the boom might be over.

However, that doesn’t mean you have to abandon all exposure to the property market, there are some great businesses on the ASX that are all about servicing property owners.

Here are three of the best in my opinion:

REA Group Limited (ASX: REA)

REA Group is the owner of a number of popular real estate websites including realestate.com.au, flatmates.com.au and realcommercial.com.au.

It also has stakes in property sites in South East Asia, India and the USA.

A property vendor would be making a mistake if they didn’t utilise one of REA Group’s services to sell. The company has grown the dividend and earnings per share significantly since it listed and could continue to do so.

REA Group is currently trading at 35x FY17’s estimated earnings with a grossed-up dividend yield of 1.97%. I think the share price is a little high at the moment, but I’ll be very interested if it goes under $50 again.

DuluxGroup Limited (ASX: DLX)

DuluxGroup is the owner of several leading house improvement brands including Dulux, British Paints, Selleys, Yates and Cabot’s.

Having just unveiled net profit after tax growth of 14.2% and dividend growth of 13% it shows how powerful the combination of improving margins and a strong brand can be.

DuluxGroup is currently trading at 19.5x FY17’s estimated earnings with a grossed-up dividend yield of 5.37%. The share price is fairly good value, even after its rise during 2017 so far.

Reece Ltd (ASX: REH)

Reece is Australia’s leading supplier of bathroom and accessory items.

The large growth of Australia’s population, the property market boom and our love for renovating have all been factors in Reece’s impressive 120% growth of the share price over the last five years.

Reece is currently trading at 21x FY16’s earnings with a grossed-up dividend yield of 3.34%. I think this is fairly reasonably priced considering how much the business has grown in recent years.

Foolish takeaway

I think all three of the above companies would make far better choices than an investment property at the current prices. Plus, you would receive a fully franked dividend compared to losing cash through negative gearing. Out of the three, I think DuluxGroup has the best chance of providing investors with the highest total shareholder return over the next 12 months.

For even more ideas on how to thrash the investment property market, you should read this report of our favourite growth stocks.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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