Telstra Corporation Ltd
Recent results released by Telstra Corporation Ltd (ASX: TLS) were very positive and showed that the company continues to make excellent progress. This has been represented in the performance of its share price, with it being up a very impressive 15.1% in the last three months. And, in future, there could be progress to come.
That’s because Telstra has momentum after being able to increase its bottom line by more than 20% in the last year alone. This momentum could help to push its shares higher – especially since many investors are somewhat concerned about the lack of visibility regarding the medium term future of the ASX and wider Aussie economy.
As such, companies that offer above average performance could continue to see their share prices bid up, which makes now the perfect time to buy a slice of Telstra.
Also offering superb performance in the last year has been Transurban Group (ASX: TCL), which has been able to increase its bottom line by 54.5% in the last 12 months. Of course, its acquisition programme has proved costly thus far, but is likely to provide it with strong growth prospects over the medium to long term.
In fact, Transurban is forecast to increase its bottom line at an annualised rate of 30.3% over the next two years, which is extremely impressive. And, even though it trades on a price to earnings (P/E) ratio of 40.9, its high forecast growth rate means that it has a price to earnings growth (PEG) ratio of just 1.35. This indicates that growth is on offer at a very reasonable price and, as such, Transurban’s share price could be set to soar.
While inflation is currently just 1.7%, lower interest rates could push it higher. As a result, stocks that offer strong dividend growth prospects could see investor sentiment pick up and one good example of such a company is AMP Limited (ASX: AMP).
For example, AMP is forecast to increase dividends per share at an annualised rate of 11.6% over the next two years, and this means that its current yield of 3.8% could improve at a brisk pace. It also means that AMP’s share price could be bid up as investors seek out fast-growing dividends and, either way, it would be good news for investors in AMP.
So, while AMP does have a rather rich price to book (P/B) ratio of 2.35 (while the ASX has a P/B ratio of 1.28), it could still prove to be a star performer over the medium term.
Of course, finding the best stocks for the long term is a tough task – especially when work and other commitments limit the amount of time you can spend trawling through the index for them.
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Motley Fool contributor Peter Stephens does not own shares in any of the companies mentioned.
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