CSL Limited and Harvey Norman Holdings Limited: 2 solid growers for 2015

CSL Limited (ASX:CSL) and Harvey Norman Holdings Limited (ASX:HVN) may have more room to run over the next year.

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Although the news is filled with falling iron ore prices and an Aussie dollar that just won't weaken, the S&P/ASX 200 Index (ASX: XJO) (Index: ^XJO) has held up pretty well at just under 5,600, or about 3% up over the past month.

August wasn't so bad for the ASX, but we are approaching October, the month that many investors associate most with falling stocks. Below are two companies hitting new 52-week highs recently which I think both have the power to go higher due to the strengths of their respective markets.

1) CSL Limited (ASX: CSL)

The largest biopharmaceutical company listed on the ASX produces vital medical products for viral and bacterial diseases as well as blood disorders. Demand for its specialised products allow the company to keep net profit margins up. The majority of its revenues come from large healthcare markets overseas like the US and Europe.

Both full-year revenue and net earnings were up 8%, but thanks in part to a share buyback, earnings per share rose 11%. The company has been steadily buying back shares since 2009, which boosted the annual EPS along the way. The company has said that it may continue buying back stock in the near future.

The stock hit a 52-week high of $75.13 last week, with its current price at $72.10. Its dividend yield is 1.8% unfranked. Its 24 price-earnings ratio is near the top of its past PE range and analysts' consensus forecasts suggest an average 15% earnings growth annually for the next two years.

2) Harvey Norman Holdings Limited (ASX: HVN)

Even when domestic retail trade is soft, the electronics and home furnishings retailer had full-year underlying net profit booming 20% up from new store sales and stronger revenues in its overseas segments. To maintain better same-store sales and margins, the company plans to open stores at a slower rate in FY 2015.

One plus on its side is the ongoing rise of the housing market. Demand for home furnishings, whitegoods and appliances is firming up. While interest rates are low, this could continue for some time.

Already, the stock has more than doubled since December 2012, hitting a 52-week high of $3.79 last week. It has a decent 3.7% fully franked dividend and a price-earnings ratio of 18. Consensus forecasts by analysts are for earnings growth to be an average annual 6% for the next two years. That would be solid growth for the retailer while the economy is adjusting to the weak mining industry.

Overall, I would prefer CSL over Harvey Norman because of its specialised products and defensive qualities as a healthcare stock.

Considering the long-term prospects of a company is always important.  For example, there is one small company that has had reliable growth and good results recently.

The Motley Fool's analysts found its dividends and growth potential so attractive that they dubbed this company "The Top Stock of 2014 – 2015".

They have written a free report to share with all interested investors.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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