A number of large-cap stocks have risen more than the 3.8% gain of the S&P/ASX All Ordinaries Index (Index: ^AORD) (ASX: XAO) in the past six months. Since mid-February the index has pretty much gone sideways with recent concern of a possible market correction.
However, I have found three companies that not only beat the index’s return, but absolutely crushed it more than four times.
Each stock had some new developments during that time that drove share price gains. Still, those developments have much longer stories and more benefits in the short and mid-term to come, so I believe they could be promising portfolio additions for you.
1) Suncorp Group Ltd (ASX: SUN), the general insurer and Australia’s fifth largest bank, is up about 16% over the last six months. Thanks to improvements in its banking business earnings and smaller volumes of claims from natural disasters, full year earnings expectations are up. Life insurance could be weak for several more years, but it is less than 10% of total group operational earnings.
In addition, its business restructuring is producing cost savings, which may come to about $265 million by 2016. Suncorp raised its interim dividend, so it could follow suit with a higher final dividend or even a special dividend.
2) Transurban Group (ASX: TCL) is the operator and owner of a number of toll roads and tunnels in Sydney and Melbourne. In addition, it will now be buying five of the six toll roads in Brisbane, creating an extensive 3-city portfolio of toll assets. It is up about 18% in the last six months.
With regular lease agreements for toll road management and toll collection lasting decades, it can generate a stable income source that has “protective moats” against competitors. Shareholders can benefit from potential stable dividends over many years, so this could be a good long-term pick for your portfolio.
3) Leighton Holdings Limited (ASX: LEI) is the well-known engineering and construction company. It is going through a restructuring to streamline its business and improve margins. Since a partial takeover from its majority shareholder, Germany-based Hochtief, and a change in management, the stock is up about a whopping 34%.
The company is getting more contract work from the LNG export industry. Also, it could benefit directly from the Federal infrastructure spending plan that may entail around $50 billion in road, rail and other social infrastructure projects over the next six years.