It should come as no surprise, the S&P/ASX 200 Index’s (ASX: XJO) (^AXJO) terrific run in 2013 has left some stocks overvalued. But the big banks aren’t the only ones trading above all-time highs.
In fact unless you’re willing to invest in the resources sector or look for smaller companies listed on the market, there’s not many well-priced companies left to choose. It means we have to work harder to discover where the value lies.
To make it a little easier for you, here are three top companies which are today trading at modest prices.
1. Resmed Inc. (CHESS) (ASX: RMD) is a biotechnology company involved in the manufacturing and distribution of innovative medical products for individuals with respiratory disorders such as sleep apnoea. Listed on both the Australian Stock Exchange (ASX) and New York Stock Exchange (NYSE), ResMed is a truly global company, servicing 100 countries worldwide. It believes around 20% of the adult population suffers from sleep-disordered breathing, but awareness of the issue remains low. ResMed trades on a forward price to earnings of 19 and a dividend yield of 1.9%.
2. Coca-Cola Amatil Ltd (ASX: CCL) has had a rough start to 2014, already falling nearly 22% on the back of poor results and bleak outlooks for near-term earnings. Despite losing share price, CCA is still the same company dealing in the same high quality products. If you believe the company will still be around in 10 years, now could be the time to capitalise on the setback. At current prices it has a forecast 5.4% dividend yield.
3. Telstra Corporation Ltd (ASX: TLS) is one of Australia’s best dividend stocks. Boasting a market capitalisation of around $65 billion, it is nearly 14 times bigger than its next biggest rival, TPG Telecom Ltd (ASX: TPM). With a 5.5% dividend yield and ongoing growth both domestically and overseas, it could find its way into any portfolio.
The above three companies are priced for long-term success and boast reputable brand names. In addition each have established markets with plenty of room to grow.