Spring Racing Carnival is a highlight of Melbournians’ calendars and certainly a key calendar entry for punters.
While there has been the occasional fortune produced from being a professional punter, there would be few who would advise a lifetime of punting to maximise your chances of a comfortable retirement.
In contrast, a lifetime of investing in the share market is a tried and true way to long-term wealth creation.
So, while a tipple on the horses to enter into the ‘spirit of things’ can be an enjoyable part of an outing to the races, history would suggest it’s a much better bet to invest in companies.
Here are a few stocks with attractive looking ‘odds’….
Despite the obvious benefits of channelling any disposable income into the share market rather than gambling, there is no denying the fact that Australians love to have a punt – in fact it has been said Aussies would even bet on two flies climbing up a wall! Given the popularity of gambling, leading provider Tabcorp Holdings Limited (ASX: TAH) looks a well-placed bet for a company with a predictable earnings stream. Admittedly, Tabcorp does face increased competition from online service providers. However, with a forecast FY 2015 price-to-earnings (PE) ratio of 19x and with a yield of 4.7% fully franked investors are arguably being compensated for the competitive and regulatory risks.
Gerry Harvey, the founder of furniture and electronics retailer Harvey Norman Holdings Limited (ASX: HVN) is possibly as well known for the retail chain that bears his name as for his love of the horses and his ownership of Magic Millions. No doubt the Magic Millions provide more flair than retailing however Harvey Norman shares might be more exciting for investors at present.
The company just provided a positive update for the three months of trading to September. With analysts forecasting earnings per share to rise to 22.1 cents per share in FY 2015, the stock looks quite appealing, trading on a forward PE ratio of 17.2x and a fully franked yield forecast at 4.2%.
Harvey’s good mate, advertising legend John Singleton is a major shareholder in radio broadcaster Macquarie Radio Network Limited (ASX: MRN). Like Harvey, Singleton is also a horse racing fanatic. However, once again investors could be better off focusing on the listed radio company which is selling on a FY 2014 PE and yield of 12x and 11.2% respectively, rather than taking an interest in where Singleton may be placing his bets for the Melbourne Cup.
A $160 billion tech revolution bet
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.