On the one hand, Aussie investors could be feeling rather excited at the moment.
That’s because the ASX has risen by 5% in the last month and there seems to be improving momentum that could push the index level higher over the near term.
However, capital gains during the last year have still been pretty dismal, with the ASX offering a lacklustre performance and being just 1% up on where it was one year ago.
Therefore if you’re feeling sick of the ASX at the moment, you may not be in the minority. However, you could overcome such feelings by taking a close look at these three stocks.
The export of LNG is quickly becoming big business. Indeed, the emerging markets of Asia appear to have an insatiable demand for energy and, with emissions also becoming a more important topic, LNG seems to fit the bill perfectly, due to it being less harmful to the environment than other fossil fuels.
So, it’s great news that Santos Ltd (ASX: STO) has exposure to the LNG market via the PNG-LNG project. This is expected to contribute to an increase in the company’s bottom line of 32.7% per annum over the next two years which, despite Santos having a relatively rich P/E ratio of 20.4, equates to a PEG ratio of just 0.62. As a result, Santos could deliver stunning share price gains in 2015 and beyond.
Having recently posted sales figures that caused an improvement in sentiment, Wesfarmers Ltd (ASX: WES) seems to be performing extremely well. Of course, it is set to continue to benefit from a low interest rate environment, with the RBA apparently happy to go lower with rates in order to keep the Aussie economy growing at a decent pace.
Loose monetary policy is also helping Wesfarmers to post excellent growth numbers. For example, over the next two years it is expected to increase its bottom line by 13.9% per annum. With a P/E ratio of 21.6, this equates to an enticing PEG ratio of 1.56, while a fully franked yield of 4.5% is also likely to appeal to investors moving forward. As such, Wesfarmers could post strong gains in 2015.
Australia and New Zealand Banking Group
While LNG is in high demand in Asia, so too are banking services. In fact, the growing middle class and the rise of consumerism (and demand for credit) means that banking could prove to be a high growth area over the long run.
One Aussie bank that is well placed to benefit is Australia and New Zealand Banking Group (ASX: ANZ). It is aiming to increase the proportion of revenue that it generates from Asia, Europe and the Americas from the current 24% to 30% within the next few years. As such, earnings growth could outperform many of its sector peers.
In addition, with a fully franked yield of 5.5%, ANZ seems to tick the income as well as growth boxes. As a result, it could prove to be a great holding over the medium to long term.
Of course, ANZ, Wesfarmers and Santos seem to have huge potential at the moment and could be well worth adding to your portfolio. However, there’s another ASX stock that the analysts at Motley Fool HQ think could prove to be an even better performer.
In fact, the company in question has recently been named as The Motley Fool’s Top Stock For 2015 and its mix of growth, income and value potential could make a real difference to your portfolio returns.
Click here to find out all about it – it’s completely FREE and without obligation to do so.
Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.