If you're looking for renowned brand names and big dividend yields, it's hard to go past National Australia Bank Ltd (ASX: NAB), Coca-Cola Amatil Ltd (ASX: CCL) and Wesfarmers Ltd (ASX: WES).
Indeed, shares of each company dominate the headlines and could easily make up the foundations of a strong share portfolio.
But do they deserve your investment dollars today? Let's take a quick look at each company to see which is right for your portfolio.
National Australia Bank
Compared to its major bank peers, NAB shares have fared quite well over the past six months in spite of huge amounts of volatility on the ASX. Indeed, so far in 2015, NAB has undertaken a record-breaking capital raising, announced the divestment of its troubled UK business, Clydesdale; and paid down billions of dollars of bad debts. After more than a decade of underperformance it seems investors are pinning their hopes on the new management team, led by CEO Andrew Thorburn. While investors may be right in holding the bank's new management team in high regard, I'd advise investors hold off buying shares in Australia's third largest bank, at least until the group reports its full-year results in late October.
Coca-Cola Amatil
Coca-Cola Amatil is Australia's and five neighbouring counties' bottler distributor of Coca-Cola products. It also has the exclusive right to distribute Beam products until 2023, in Australia. Coca-Cola Amatil's recent share price performance has been marred by intense price competition between the two supermarket giants and a price war with key rival Schweppes. Indonesia, Coca-Cola Amatil's flagship growth prospect has also proven to be a difficult market to crack. Nonetheless, the tide may again turn favourably for the company's share price if it can continue to growth profits per share against a backdrop of the growing health conscious consumer population.
Wesfarmers
Wesfarmers is a great Australian conglomerate. The owner of Coles, Bunnings Warehouse, Officeworks, Kmart and more is one of the ASX's premier blue chip companies having been in operation for more than 100 years. It has an excellent track record of paying dividends, is diversified, and boasts leading brands and a strong balance sheet. However, fears are growing that the supermarket war with Woolies is intensifying. While so far Wesfarmers' Coles has won the battle of lowest prices, an all-out price war does not bode well for above-average profit growth in the medium-term. Moreover, as I've said before, Wesfarmers' shares appear richly priced at their current level over $38. Therefore, I suggest investors wait for a more compelling entry point.
Buy, Hold or Sell
At today's prices, I think Coca-Cola Amatil shares are worthy of closer inspection. However, I think both NAB and Wesfarmers' shares are too richly priced given the uncertainty in the near term. Therefore, I'd hold off buying shares in either company, for now.
