MENU

3 stocks that could smash the ASX in 2015: QBE Insurance Group Ltd, Suncorp Group Ltd and Origin Energy Ltd

2014 has been a major disappointment for Aussie investors. Certainly, there were glimpses of a bull market, with the ASX being up as much as 6% during the course of the year. However, today it’s up less than 2% year-to-date, which is less than the interest rate and less than inflation.

Whether 2015 turns out to be a better year for the ASX or not, here are three stocks that could outperform the wider index by a wide margin. As a result, they could be well worth adding to your portfolio and have the potential to significantly boost your bottom line next year.

QBE Insurance Group Ltd

With shares in QBE Insurance Group Ltd (ASX: QBE) having fallen by 2% during the course of 2014, it seems as though the market is still focusing on the insurance company’s performance in 2013. That included a loss which, although disappointing, is set to turn into a strong profit in the current financial year.

More importantly, QBE is forecast to increase its bottom line by a whopping 29.6% in FY 2015 and, with shares in the company trading on a P/E ratio of 18.2, this equates to a PEG ratio of just 0.61. As a result of what appears to be a mispricing, QBE could see its share price move upwards and beat the performance of the wider index in 2015.

Suncorp Group Ltd

It’s been a different story at Suncorp Group Ltd (ASX: SUN) in 2014, with shares in the diversified financial services company rising by over 10% year-to-date. However, there could be more to come and sentiment could even strengthen over the course of 2015.

That’s because Suncorp’s fully franked yield of 5.8% remains hugely attractive. And, at a time when the RBA could cut rates further, such a strong yield may cause demand for the company’s shares to remain buoyant over the medium term.

In addition, Suncorp’s growth rate impresses. Its bottom line is set to be 75% higher in the current year and a further 8.2% higher next year. This means that on a PEG ratio of just 0.54, Suncorp could hit the sweet spot for growth and income investors alike.

Origin Energy Ltd

Although Origin Energy Ltd’s (ASX: ORG) earnings growth rate over the last ten years is nothing too spectacular, being an annualised rate of 7%, its future potential is much more appealing.

For example, the diversified energy play is expected to increase its bottom line at an annualised rate of 33% over the next two years, with the PEG ratio apparently confirming that such impressive growth potential is on offer at a very reasonable price. Indeed, Origin’s PEG ratio is considerably less than that of the ASX, at 0.65 versus 1.82 for the wider index.

As is often the case, strong earnings growth means dividends also rise at a rapid rate. In Origin’s case, it could be yielding as much as 4.9% (unfranked) in FY 2016, which highlights its appeal as an income, as well as growth play, and means that it could beat the ASX in 2015.

Of course, there is a fourth stock that the analysts at Motley Fool HQ believe could be the best investment opportunity for 2015.

In fact, they're so confident that they've named it The Motley Fool's Top Stock Of 2015. That's because it offers stunning growth potential, enticing dividend prospects and currently trades at a super-low valuation.

You can find out all about it by clicking here - it's completely free and without any further obligation to do so.

Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.