Investing success comes down to basically share price growth and dividend income.
You'll most likely get your biggest returns from high growth stocks, yet having only high powered stocks in your portfolio may leave you unprotected if the market tanks. Steady dividend income puts a base floor in portfolio returns that is always welcome.
To give yourself a better chance at making an above average return, shoot for 15% and be happy if it comes out at 12%. Anything above that is icing on the cake.
So in a five stock diversified portfolio, I'd have three fast growers and two dividend stocks. If you have space for a turnaround stock, that may give you unexpected returns as well.
With that in mind, here are five stocks that could give you a diversified returns, but leaning towards growth over income.
- SEEK Limited (ASX: SEK), the operator of the seek.com.au job search website has a very strong hold on the number one job placement service leader spot. It is on the road of expansion into South East Asia in highly populated countries with large workforces. Earnings regularly grow a little over 20% annually, so this reliable fast grower deserves a high spot in our list.
- Slater & Gordon Limited (ASX: SGH) is growing like a chain business across Australia as it keeps on acquiring law practices. This law firm network specialises in personal injury law, but also does property conveyancing. With 70 offices in Australia, there is still room to expand. In addition, it is adding to its office numbers in the UK through steady acquisitions. Analysts are looking for earnings to rise about 14% annually over the next two years and the stock pays a 1.4% yield fully franked.
- My Net Fone Limited (ASX: MNF) offers internet-based communications for voice, data and video transfers. This small-cap stock has risen from about $1.50 to $3.77 in the past year on steadily growing earnings. Still, there could be more to come because consensus forecasts are for annual earnings growth to be about 25% on average in the next two years. Helping people save money on phone and mobile usage powers the company's gains.
- National Australia Bank Ltd. (ASX: NAB) is offering the largest yield of the big four banks- a whopping 6.3% fully franked. It is planning to sell or spin off its underperforming UK businesses, which could give its earnings a boost from better margins. By buying the stock in advance, it may be possible to lock in a high yield now and enjoy a stronger share price when that takes place.
- Automotive Holdings Group Ltd (ASX: AHE), the largest auto retailer in Australia, has more than 150 car and truck dealerships. In addition, it is now the leader in refrigerated food transport after several recent acquisitions. Record low interest rates are making car financing more affordable, which should help sales revenue. The stock pays a big 5.6% yield fully franked. It plans to continue growing through acquisitions, strengthening its leading market share.
