With 2014 having been a far more uncertain year for Aussie investors, it would be of little surprise if we saw historically reliable stocks gain in popularity in 2015.
After all, when the outlook for the stock market look uncertain, it’s logical to seek out relatively consistent companies that have strong track records of growth.
Indeed, such companies can prove to be top performers in such a climate and, with that in mind, here are three stocks that could have a strong 2015 due to their status as ‘safer stocks’.
Ramsay Health Care Limited
Looking back at the last 10 years, Ramsay Health Care Limited (ASX: RHC) has delivered excellent performance as a business. For example, its bottom line has risen at an annualised rate of 20.9%, which means that earnings were 6.7 times greater last year than they were 10 years ago.
That’s an incredible rate of growth and, encouragingly, Ramsay has shared such performance with investors through dividends per share having risen at an annualised rate of 17.4% during the same period.
Looking ahead, Ramsay is expected to continue its excellent growth rate, with earnings and dividends per share set to rise by 17.3% and 15.3% per annum (respectively) over the next two years. And, with Ramsay trading on a PEG ratio of 1.69, it still seems to offer good value for money when its consistent and stable growth is taken into account. As such, it could have an impressive 2015.
While the GFC had a major impact upon a number of companies, Woolworths Limited (ASX: WOW) has still been able to deliver exceptional cash flow and earnings growth over the last 10 years.
Indeed, cash flow has increased at an annualised rate of 10.1% over the period, while earnings are up 11.2% per annum during the same period. This means that, while Woolworths is not unknown to have a disappointing quarter (as was recently the case when sales growth of 3% disappointed the market somewhat), over the longer term it has the potential to deliver relatively reliable and upbeat growth.
With shares in the company also offering a fully franked yield of 4.5% and having a price to sales ratio of just 0.6, they seem to offer excellent income and value prospects too, which could make them a strong performer in 2015.
Australia and New Zealand Banking Group
While the performance of the banking sector has been somewhat mixed in recent years, owing at least partly to the GFC, Australia and New Zealand Banking Group (ASX: ANZ) has delivered remarkably impressive results.
For example, its bottom line has grown at an annualised rate of 5.7% over the last 10 years, with dividends per share increasing by 5.5% per annum over the same time period.
Looking ahead, the bank’s new strategy under CEO, Mike Smith, could help to boost this growth rate in future. With a combination of efficiencies and a pivot to Asia, ANZ’s medium-term outlook holds considerable promise for investors in the stock.
This potential, alongside an encouraging track record and a P/E ratio of just 12.1, could mean that shares in ANZ shine in 2015, thereby overcoming a disappointing 2014 that has seen their price fall by 1% over the course of the year.
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Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
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