Although the ASX made impressive gains yesterday, the index is still down 2.5% for the year. Clearly, that's disappointing and even if a dividend yield of 4.6% is included, it still means that shares have failed to deliver a positive return in real terms during 2014.
However, 2015 could prove to be a better year for the index, with interest rate cuts being mooted and there being a number of stocks that seem to offer strong total return potential. In fact, here are three such stocks that could be worth buying this Christmas in anticipation of impressive performance in 2015 and beyond.
Woolworths Limited
Although there are rumours flying around at the moment regarding a potential downgrade to profit at Woolworths Limited (ASX: WOW), it still appears to be a strong long-term buy. Certainly, the market appears to believe that a downgrade is on the cards, with Woolworths' share price falling by 11% in the last month alone, as it apparently seeks payments from suppliers to 'margin backfill' the gap created by discounted prices.
However, looking at the company's longer term future, it seems to be relatively sound. For example, Woolworths is expanding into convenience stores, with several being opened in Melbourne and this move could stimulate its top and bottom lines over the medium term, just as it did with UK peers in years gone by. And, with Woolworths trading on a price to sales ratio of just 0.6 and having a fully franked yield of 4.8%, it seems to offer good value, sound income prospects and upbeat growth potential.
National Australia Bank Ltd.
In recent years, foreign assets have been a major drag on the performance of National Australia Bank Ltd. (ASX: NAB) and have contributed to the bank's bottom line growing at an annualised rate of just 2.5% over the last five years.
However, under a new management team, NAB is making real progress in divesting its non-Australian operations. This could make a significant impact on its bottom line and, looking ahead, the bank is all set to increase earnings at an annualised rate of 16.5% over the next two years.
This could stimulate investor interest in the stock and, with a PEG ratio of just 0.84, there seems to be substantial scope for capital gains over the medium term. This prospect, when combined with a fat, fully franked yield of 6.5%, means that NAB could be worth buying right now.
Brambles Limited
On the face of it, Brambles Limited (ASX: BXB) may lack appeal for many investors. That's because it trades on a relatively rich P/E ratio of 23.1, has a partially franked yield of 3% and, with its shares having risen by 61% over the last five years, could be due a fall.
However, at a time when there is considerable uncertainty among Aussie investors, Brambles seems to be just the stock that many investors' portfolios could really benefit from.
That's because Brambles is forecast to increase its bottom line at an annualised rate of 13.1% over the next two years and, in addition, dividends per share are set to follow suit and rise by 12.8% per annum over the same time period. Furthermore, with Brambles having a key position in the supply chains of many of its customers, it could be in a prime position to expand its margins over the medium to long term.
