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NAB, Westfield Corp & BHP Billiton Limited: Buy, Sell or Hold?

As I wrote in this article, the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) will rely on some of Australia’s most widely held stocks to boost it above its current multi-year high of 5,554 points.

While the returns from various blue-chip stocks look like slowing down in the near-future, others will need to stand tall to drive the local market to new heights. Do National Australia Bank Ltd.  (ASX: NAB), Westfield Corp (ASX: WFD) and BHP Billiton Limited (ASX: BHP) have what it takes?

National Australia Bank

Compared to the other big four banks, National Australia Bank has been a serial underperformer. While it has returned 13% in the last 12 months, it has risen only 7% in the last 10 years. Those figures aren’t including dividends, but it doesn’t take a genius to realise those returns are extremely disappointing.

NAB remains the cheapest bank based on its forecast P/E ratio (12.5) and 6.1% fully franked dividend yield – in this low interest rate environment, that yield is looking extremely attractive. Despite appearing to be cheaper than its rivals, the bank’s shares remain overpriced and while its UK divisions are still acting as a drag on NAB’s overall earnings, the stock would be best avoided for the time being.

Westfield Corp

The creation of Westfield Corp from the restructure of Westfield Group and Westfield Retail Trust has unlocked significant shareholder value for the long term. Westfield Corp now owns and manages all of Westfield’s international operations (with the exception of New Zealand) and is in an extremely strong position to benefit from the US and UK economic recoveries.

The shopping centre giant will benefit from the developments of malls such as the World Trade Centre in New York and Westfield London. As the economies recover, rents and sales should increase strongly and Westfield Corp is in the box seat to benefit. Westfield Corp presents as a buy at today’s price of $7.30.

BHP Billiton

While BHP Billiton generates most of its revenues from iron ore operations, the stock has suffered as the commodity has dropped in price this year. However, the company continues to focus on improving productivity and heavily reducing costs which will help boost margins in the long run.

Although BHP is looking like a compelling buy for long-term focused investors (it’s trading on a forecast P/E ratio of 13.4 and a 3.5% fully franked dividend yield), I believe the headwinds facing the industry could see shares fall below today’s price of $37.23. Investors may want to sit on their hands and wait for a more attractive entry point before making their move.

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I own the stock, and I think you should too.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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