3 stocks to propel your returns into next year

Stick with winners and reap the reward.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In a few short months, this financial year will be coming to a close. This might be an opportunity to start going over the stocks you have in your portfolio, weeding out the ones that clearly have not gone according to plan and looking at the list with fresh eyes.

You will probably want to restock it with quality companies that have catalysts for further growth. If they offer a decent dividend, then all the better. To really get ahead with your returns, you need stocks that have a strong base of earnings.

Investment fund manager Perpetual Limited (ASX: PPT) would be a good choice as the financial markets and general economy improve. Its fees may depend on the investments they have in successful companies and it is very particular about which stocks make the grade for consideration.

It achieved a 24% return on investments in FY2013 and its share price is up about 9% in the last three months. It has a 3.2% dividend yield.

Looking for something familiar to invest in, you may not have to go much farther than Woolworths Limited (ASX: WOW). It has a long-term growth model that could be suitable for any portfolio. It is well managed and business performance is top class with return on equity and return on capital at 26% and 20% respectively.

Its share price has tripled over the past 10 years and its current dividend yield is about 3.8%. It hit an all-time high of $36.96 last month and is $36.15 currently. Could the next 6-12 months see it at new highs as it expands its supermarkets and Big W, Masters and Dan Murphy’s stores into new communities?

Another stock that could propel earnings is the energy producer Oil Search Ltd (ASX: OSH). Although the PE ratio is about 45, long-term investors should look further out into the future. Its PNG LNG project is almost complete and revenue from that should start flowing in. It has other projects in the region, so this may be a good mid or long-term growth story.

I remember when it used to be about $0.80c a share, but I didn’t buy any because it was still at earlier stages of its development. Not long after that it rose to $2 a share. That is now very cheap compared to its present $8.53 price.

Foolish takeaway

I think these three stocks would complement a portfolio because they have business growth, sizeable earnings and the ability to expand over a good number of years. Those are some of the key factors for better investment returns.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »