3 stocks I'd buy with $10k: Commonwealth Bank of Australia, Woodside Petroleum Limited and Woolworths Limited

These 3 stocks could be top performers this year: Commonwealth Bank of Australia (ASX:CBA), Woodside Petroleum Limited (ASX:WPL) and Woolworths Limited (ASX:WOW)

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With the ASX trading on a price to earnings (P/E) ratio of 15, it could be argued that there is a lack of value on offer in the stock market.

Certainly, the ASX's rating is not particularly low, but even if Aussie companies are not dirt cheap, it doesn't necessarily mean they're not worth buying. After all, as Warren Buffett famously said: 'I'd rather buy a great company at a reasonable price, than a reasonable company at a great price'.

With this in mind, here are three companies that could be worth buying if you have capital to invest right now.

Commonwealth Bank of Australia

With it having a P/E ratio of 15.7 and a price to book (P/B) ratio of 2.8, Commonwealth Bank of Australia (ASX: CBA) is not among the cheapest of stocks at the present time. For example, the wider banking sector is considerably cheaper, with it having a P/E ratio of 14 and a P/B ratio of 1.3.

However, CBA could still be worth buying because it has a relatively strong track record of earnings growth. For example, over the last 10 years it has been able to post annualised growth in its bottom line of 6.4%, with dividends per share rising by 8.2% per annum during the same time period.

And, with its yield of 4.8% being fully franked and well covered at 1.3 times by profit, CBA could still offer an appealing income return to go alongside a steady and impressive earnings growth profile.

Woodside Petroleum Limited

While many of its resource peers are currently on the back foot, Woodside Petroleum Limited (ASX: WPL) is very much on the front foot. Further evidence of this can be seen in its decision to partner up with India-based energy and industrial conglomerate, Adani. The deal, it is hoped, will open a new avenue for Woodside's liquefied natural gas (LNG) market and help to boost profitability over the medium to long term.

Clearly, investor sentiment in Woodside has been hurt by a falling oil price and, as a result, its shares trade on a P/E ratio of just 10.8 and yield a whopping 6.6%. However, with the price of oil set to move lower and having the potential to reduce Woodside's bottom line, investors may need such a wide margin of safety moving forward.

As a result, and while Woodside may not be dirt cheap, its focus on the long term and moves to set itself up for long-term growth mean that it could be worth buying right now.

Woolworths Limited

Although its move into DIY has not been particularly profitable thus far (its Masters brand has lost around $333 million in just two years), Woolworths Limited (ASX: WOW) still appears to be an excellent investment opportunity.

For example, it offers an excellent track record of earnings growth, with its bottom line having grown by 5.5% per annum over the last five years. And, with a dividend yield of 4.8%, a beta of 0.66 and a very stable and consistent business model, it offers investors an enticing defensive option while the ASX is still facing a period of uncertainty.

In fact, for a premium company, it could be argued that Woolworths deserves to trade at a larger premium to the ASX, with it having a very respectable P/E ratio of just 15.1. As such, it could be worth buying at the present time.

Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.

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