2 high-yielding bargains to snap up for income and growth

WorleyParsons Limited (ASX:WOR) and IOOF Holdings Limited (ASX:IFL) are cheap looking and have big yields you just can't ignore.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The gains of the S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO) since late June have pretty much been flat, not leaving much to cheer about. After the September sell-off and the partial recovery in October, we're back to where we started this financial year.

But that still gives nimble investors an opportunity to snap up some high-yield stocks in bargain territory. That allows you to lock in a better yield while you wait for the share price to rise.

Below are two quality companies with high yields that look attractively priced.

1)   The engineering and professional services company WorleyParsons Limited (ASX: WOR) has trailed down in share price since early July, from about $19 to close to $12. Due to its mining services business, the company has been pulled down by the weakening iron ore and coal markets.

However, the company actually gets a large part of its revenue from its hydrocarbon segment covering oil and gas. As mining work has trailed off, it is increasing its gas and petroleum business. Also, WorleyParsons is geographically diverse around the world, so it isn't locked in to any one market or country's economy.

The stock pays a whopping 6.9% yield partially franked. The company has completed a restructure and is looking toward higher operating cash flows. It may take some time to turn things around, but at these low prices, it could be worth it.

2)   IOOF Holdings Limited (ASX: IFL), the investment portfolio administration and financial services provider is trading sideways similar to the ASX recently.

However, superannuation and SMSFs are driving demand for managed funds, with people preparing for retirement trying to squeeze out every last drop of returns for the future. Already since the start of this financial year, its funds under management and administration (FUMA) climbed 21% to $116.4 billion by the end of September.

Net cash flows to its platforms have been positive for the last seven quarters. That illustrates why analysts are forecasting a consensus earnings growth rate of an average 12% annually in the next two years. Dividends are expected to rise about 10% annually over the same time as well. That's great news since the stock is already yielding a hefty 5.5% fully franked. It may be good to pick up some IOOF Holdings stock before stronger earnings results possibly push up the share price.

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »