Commonwealth Bank of Australia’s (ASX: CBA) shares have provided a lot of answers for investors’ portfolios in recent years. At the same time as offering relative safety, a solid dividend yield (fully franked) and record profits, the stock has also handily outperformed the broader S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO), delivering investors some outstanding capital gains.
But with the stock now trading at $81.00, it is no longer an appealing prospect. Its dividend yield has shrunk, the company has limited growth prospects in the years ahead and, with a number of strong headwinds facing the industry and the economy as a whole, it by no means offers the same level of safety that it used to.
As such, investors may want to start looking at some other alternatives on the ASX to replace their Commonwealth Bank holdings in 2015. Here are three companies that would fill the void perfectly…
1. Coca-Cola Amatil Ltd (ASX: CCL)
The beverage manufacturer’s shares are sitting at roughly the same level they were back in 2009. While 2013 and 2014 have proven disastrous for shareholders, there are many reasons to believe the worst is now behind the company with Coca-Cola Amatil set to return to the winner’s list in 2015. Trading at $9.12, the stock is trading on a forecast yield of 4.6%, franked to 75%, and that should grow as the company’s earnings strengthen.
2. ResMed Inc. (CHESS) (ASX: RMD)
ResMed develops and manufactures medical devices for the treatment of various respiratory conditions, with a particular focus on sleep apnea. Although ResMed has built an incredible track record for revenue and earnings growth, sleep apnea is still a hugely under-recognised medical condition. With roughly 100 million sufferers worldwide, an estimated 80% still remain undiagnosed, leaving an enormous untapped market for the company. ResMed’s shares are currently trading at $6.25 and offer a 2% dividend.
3. Westfield Corp Ltd (ASX: WFD)
Created as part of the global Westfield Group shakeup, the shopping centre behemoth owns and manages all of Westfield’s assets in the US and UK, with substantial growth prospects across Europe and South America. The company is well positioned to benefit from improving consumer confidence as the global economy continues its rapid recovery. It’s trading at $8.38 per share and is forecast to distribute roughly 27.1 cents per share in FY15, putting it on a yield of 3.2%.
These 3 stocks could be the next big movers in 2020
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Motley Fool contributor Ryan Newman (@ASXvalueinvest) owns shares in Coca-Cola Amatil Ltd.
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