So far, it hasn't been a pleasant start to the calendar year with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) losing 1.5% in the first 10 trading days. Of course that has no bearing on how the market will perform over the rest of the year. However with commodity prices – particularly oil, copper and iron ore – struggling to maintain their composure and given the significant weighting our domestic market has to resource stocks such as BHP Billiton Limited (ASX: BHP) the signs aren't too good…
Add to this a gloomy outlook for the European Union and a slower-than-expected economic growth rate from our major trading partner China and there really are few data points to get excited about that suggest a good year for stocks in general.
A stock picker's market
Despite the muted outlook there are definitely great investment opportunities out there if you know where to look. Consider the following stock…
Leading toll road operator Transurban Group (ASX: TCL) isn't being unduly affected by the global economic climate. The firm has just reported a 37% jump in proportional toll revenue for the December quarter to $385.4 million. The outlook for the group is solid too with analyst consensus forecasts predicting earnings per share to jump from an estimated 22.4 cents per share (cps) in the current financial year (FY) to 52.3 cps in FY 2017.
What's more, a dividend of 48 cps is forecast come FY 2017. This would place the infrastructure owner and operator on a partially franked dividend yield of 5.3%.
So, not only can an investor in Transurban receive a decent stream of dividend income but they also own a business with a defensive asset base which is diversified by geography, generates strong cash flows and boasts an impressive growth profile.
