Like the start of a new year when we make resolutions or goals, I wanted to offer several diversified portfolios at the beginning of this financial year for better financial success and track their progress along the way. Five stocks are enough to get a good mix of industries and stock types for diversification, as well as keeping it easy to follow.
This first portfolio of the series has some big name stocks that readers will know immediately and a couple that may not be household names, but still are working in and around your communities. These companies will probably be doing business – bigger business – over the next 10–20 years.
— Woolworths Limited (ASX: WOW) $36.46
The supermarket giant is the anchor and one of our income stocks of this group. It has a good earnings history and steady projected growth well into the future. The stock has tripled in share price over the past 10 years and offers an attractive 3.7% dividend yield fully franked. The brand retailer will expand across Australia as the population grows.
— Suncorp Group Ltd (ASX: SUN) $13.74
The well-known insurer is also the fifth largest bank just after the Big Four banks. It is restructuring itself now to realise an expected $265 million in cost savings by 2016, so it will be an income and part-turnaround stock in the group. It has a wonderful 5% yield fully franked.
— Brambles Limited (ASX: BXB) $9.36
The supply-chain logistics company known by its CHEP brand of containers and pallets will be our stalwart grower stock. Well established and involved with many shipping, warehousing and retail companies globally, it is regularly acquiring businesses to drive its growth and large economies of scale. Its yield is 2.9% partially franked.
— Carsales.com Ltd (ASX: CRZ) $11.40
This auto sales website is the fast grower of the bunch. Already the number one site for car buyers in Australia, it is expanding overseas in Asia and Brazil to take advantage of growing car markets in highly populated countries. Like a successful chain store, it can replicate its success in different regions and make itself a market leader. It offers a 2.7% yield fully franked, but its earnings growth rate is the real kicker.
— Transpacific Industries (ASX: TPI) $1.05
This is a turnaround story. The waste manager was once a high-flier, expanding quickly, but ran into high debt troubles during the GFC. It has sold off many of the businesses it acquired from that time and is building up an adequate cash position to strengthen its balance sheet and take back market share. It doesn't pay a dividend, but there is talk that could change in the near future.
