All around Australia New Year's resolutions have been made with the best intentions. Some Australian will have resolved to lose weight, pay off debt, or get out more, but there are a small group of us who have resolved to invest better, learn more, and get better returns than in 2013.
Personally, I was under invested towards the start of 2013 and missed the early gains in the banking and consumer sector, but I have resolved to start 2014 better by investing in a selection of high-quality growth stocks leveraged to the improving global economy. My favourites are:
BHP Billiton (ASX: BHP) has been in my portfolio for some time following a sell-off in mid-2012 and mid-2013 which offered prices I believed to be a no-brainer. While the price is higher now that it was then, BHP remains the best of Australia's big miners with a diversified asset base and exposure to improving demand from China and Asia as a whole.
Woolworths (ASX: WOW) has been criticised by the Australian investment and consumer community in the past 12 months more than any time I can remember. Industry groups complained about hard-line negotiations with local produce suppliers as a result of increased competition in the sector, while some investor groups frowned upon slow progress in its new Masters Hardware chain. Woolworths has challenges ahead of it, but its dominant position in the Australian consumer staples sector will allow its experienced management team to sail the company through to a better future.
NAB (ASX: NAB) was surprisingly one of the stocks that delivered the most share price growth for investors in 2013. Typically income plays, the nation's big four banks are continuing to find ways to reduce costs and drive mid-single digit earnings growth despite a weak lending market. NAB is poised to benefit from a recovery in the UK economy and improving demand for credit in Australia in 2014. This should deliver more earnings growth than its peers. NAB's management has made mistakes in the past, but now appear to be heading down the right track to deliver improved return on equity in 2014 and onwards.
Woodside Petroleum (ASX: WPL) has abandoned immediate plans to develop some of its huge Australian gas projects as a result of the high cost of working in Australia. In 2014 the company will deliver more of its earnings as dividends and is still pursuing new projects outside Australia to drive growth. Its Leviathan project in Israel is one such example which is expected to deliver earnings growth in the years to come. I believe the company's management, like that of BHP, were strong when they had to be by rejecting political pressure to develop resources in Australia while the costs remain high.
Finally, Amcor (ASX: AMC) is a company I'm very interested in. Following the demerger of its Australasian packaging division last year, the company is now poised to deliver on its significant growth potential by exploiting improving economies in the US, Europe and Asia. Amcor has a terrific track record, delivering terrific returns for investors over many years and the management team appear to understand the industry well.
Foolish takeaway
My plan for 2014 revolves around all of the Foolish investing principals – invest in high-quality companies, with excellent long-term management teams, at attractive prices for the long term. The five companies above all have long-term growth prospects and all have the added benefit of delivering dividends over 3%.
