Origin Energy Ltd
Second quarter results released by Origin Energy Ltd (ASX: ORG) last week showed that output for the period declined by 4% versus the previous quarter, and by 10% compared to the same quarter last year. This contributed to revenues being 16% lower year-on-year, with declining commodity prices also being a major factor as well as lower-than-expected output at the Otway and Kupe projects.
On the plus side, though, Origin confirmed that the Australia-Pacific liquefied natural gas (LNG) project is 88% complete and remains on-track for first LNG in the middle of this year. This could stimulate investor sentiment in the company and, with it trading on a price to earnings growth (PEG) ratio of just 0.65, it appears to be well-placed to deliver strong share price growth moving forward.
BHP Billiton Limited
As a direct consequence of lower commodity prices, BHP Billiton Limited (ASX: BHP) has announced that it will be cutting jobs at its operations in South Australia in a bid to reduce costs and improve the company’s medium-term profitability. The job losses are reported to be in the vicinity of 300, although no final figures have yet been confirmed and, looking ahead, it could be the case that further cost reduction strategies are employed so as to put BHP on a firmer financial footing.
Of course, BHP remains highly diversified and financially sound, with it due to report improved profitability numbers next year after a tough current year. In fact, although the company’s bottom line is forecast to fall by 30% this year, it is due to rise by 9% next year, which could prove to be a good relative result, given the challenging trading conditions currently being experienced.
And, with BHP having a price to earnings (P/E) ratio of 13.3, it seems to be reasonably priced and could prove to be a sound long-term investment.
Shares in AMP Limited (ASX: AMP) have delivered an exceptional total return to shareholders in the last three years, with them posting an annualised growth rate of 16.5%. This rate of growth could continue in future, since AMP has a relatively high beta of 1.7. This means that its share price should move by 1.7% for every 1% change in the level of the ASX and, while the short term may be somewhat uncertain for the Aussie economy and for the wider index, its medium to long-term future still seems to be very bright.
In addition, AMP also trades on a valuation that indicates growth potential is on offer at a very reasonable price. For example, it has a price to earnings growth (PEG) ratio of just 0.53 and this could mean that its shares deliver excellent gains in 2015 and beyond.
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Motley Fool contributor Peter Stephens owns shares in BHP Billiton.
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