Individuals approach the stock market with different goals. Some want growth in the form of capital gains. Others want income from dividends and some just want to diversify away from other asset classes. But why not have it all?
There are many stocks inside and out of the S&P/ASX 200 (ASX: XJO) (^AXJO) index which offer a consistent dividend, value and growing earnings per share.
One of the most obvious examples is Australia’s biggest investment bank, Macquarie Group Ltd (ASX: MQG). It draws a majority of its revenues from world markets, pays a strong 4.7% dividend and its shares are currently well-priced. With its Funds Management and Corporate and Asset Finance divisions providing a solid foundation in the form of strong revenues and earnings, Macquarie will look to leverage growth from its smaller niche market services in coming years.
Although smaller in size, Cash Converters International Ltd (ASX: CCV) boasts a reputation of industry leading service and successful international expansion. It has a big presence in the UK and growing exposure throughout New Zealand and South America. Its shares trade cheaply thanks to a recent setback, but its long-term prospects remain intact. It has a number of rapidly growing businesses including online lending and the all-in-one car finance business, Carboodle. It is forecast to pay a fully franked 3.2% dividend in 2014.
Australia’s leading personal injury law firm, Slater & Gordon Limited (ASX: SGH), is another iconic Australian business with global reach. Currently its acquisitive expansion into the UK has enabled it to control around 5% of the PI market. The expansion, whilst not void of risk, provides the company with exposure to a market which is five times larger than ours. In the next year it is expected to pay a fully franked dividend equivalent to 1.4%.
The best buy of all
Each of these three companies are a good long-term buy at current prices, despite rallying strongly in the past two years. Of the three, I believe Cash Converters represents the best value and is a standout buy.