In investing, timing is everything. Indeed, even though the ASX has risen by 6% in the last month, now could prove to be the perfect time to buy shares in Woodside Petroleum Limited (ASX: WPL), Amcor Limited (ASX: AMC) and National Australia Bank Ltd. (ASX: NAB).
That’s because all three companies offer a potent mix of income potential, growth prospects and attractive valuations. As such, they could boost your portfolio returns in 2015 and beyond. Here’s how.
Woodside Petroleum Limited
With shares in Woodside Petroleum trading at a discount to the ASX, there could be substantial scope for an upward re-rating. Indeed, they currently have a P/E ratio of 12.5, versus 15.5 for the wider index, which is surprising given that Woodside is enjoying strong profit growth from its LNG projects.
Furthermore, such projects are a major reason why the company’s bottom line is due to rise at an annualised rate of 15.4% over the next two years. This is ahead of the wider index growth rate and puts Woodside on a PEG ratio of just 0.81, which highlights excellent value for money.
In addition, with a yield of 5.8% (fully franked), Woodside seems to offer supreme income potential, too. As such, now could be the right time to buy a slice of one of Australia’s biggest blue-chips.
Despite Amcor arguably not being the most exciting of stocks on the ASX, it is a superb long term performer. For example, over the last five years it has increased cash flow at an annualised rate of 7.2%, earnings at an annualised rate of 16.5%, and dividends at an annualised rate of 8.1%.
Certainly, the present time is something of a slow period for Amcor, with its bottom line due to fall by 17.6% this year. However, it has stunning long-term potential through expansion into emerging markets that the company feels will help to raise its long-term growth profile.
Furthermore, with investor sentiment having picked up in recent weeks (shares in Amcor are up 9% in the last month), this could continue and help the stock to make even higher all-time highs moving forward.
National Australia Bank Ltd.
Despite rising by 3% in the last month, shares in NAB are still down 5% in 2014. However, the plus side from a fall in share price is that the bank’s dividend yield is now a whopping (and fully franked) 6%.
Better still, NAB has impressive earnings and dividend growth prospects, with the bottom line due to rise at an annualised rate of 16.6% over the next two years and dividends set to increase at an annualised rate of 5.5% over the same time period. This means that it trades on a PEG ratio of just 0.9 and could be yielding 6.7% in 2016 assuming no change in its current share price.
So, while it recently reported a 10% fall in cash profit for the year, the future could prove to be much more appealing for NAB (and its investors) than the past. As such, now could be the perfect time to buy a slice of it.
5 stocks under $5
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*Extreme Opportunities returns as of June 5th 2020
Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
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