With the ASX having fallen by 4% in the last month alone, it may seem as though investing in shares is not the best way to make money.
However, with interest rates set to stay at 2.5% for the foreseeable future, alternative assets may struggle to match the long-term gains of stocks. Indeed, even if the ASX doesn't deliver vast returns moving forward, there will inevitably be some companies that easily beat the returns of the wider index. Here are three that could do just that..
- Scentre Group Ltd
Despite coming under pressure in recent weeks, 2014 has been a positive year for shares in Scentre Group Ltd (ASX: SCG). That's because the property portfolio company has delivered share price gains of 8% since the turn of the year and there could be more to come.
Scentre has an unfranked yield of 6% and growth potential as well. Earnings are forecast to increase at an annualised rate of 5.1% over the next two years and low interest rates could give Aussie consumers a boost. This would clearly be good news for a shopping centre owner such as Scentre and could help to further improve its bottom line.
- Origin Energy Ltd
The most important reason why Origin Energy Ltd (ASX: ORG) could shoot the lights out is its outstanding growth potential. Earnings at the energy exploration company and producer are expected to increase by 32.2% per annum over the next two years, which is well ahead of the wider index's growth rate.
Despite this, Origin trades at a reasonable valuation. Shares in the company have a price to earnings growth (PEG) ratio of just 0.71 and with an unfranked yield of 3.3%, they offer income potential as well as good value and growth prospects.
- Macquarie Group Ltd
Macquarie Group Ltd (ASX: MQG) offers an attractive mix of income and growth potential. For example, shares in the financial holding company currently yield a partially franked 4.7% and earnings growth of 7.8% per annum is pencilled in for the next two years.
Shares in Macquarie are down 3.3% over the last three months. However, with a relatively attractive P/E ratio of 15.3 (versus 15.6 for the ASX), they could have a very bright future.
