Sometimes it’s difficult to decide which stocks to invest in when there are so many out there. Perhaps the best strategy is to split up your capital into three different businesses instead of one when making a purchase.
If I were investing $5,000 today, here are three businesses that would be on my short list:
Crown Resorts Ltd (ASX: CWN)
Crown is one of Australia’s leading luxury resort and entertainment businesses with a market capitalisation of $8.35 billion.
The share price was hit hard when news that some employees were arrested became known. The negativity was regarding the potential collapse of VIP gaming revenue that comes from Chinese nationals visiting Australia to gamble.
Crown has a pipeline of exciting projects in Australia including the new casino in Sydney’s Barangaroo and the new hotel in Melbourne. This could drive the profit and share price higher in future years.
The current price could be attractive because of short-term negativity, whilst there is long-term potential for the business to grow strongly.
Crown is trading at 20.8x FY17’s estimated earnings.
Hansen Technologies Limited (ASX: HSN)
Hansen is a global provider of billing software to utility companies, telecommunications and pay TV operators with around 200 clients in 40 countries. It currently has a market capitalisation of $622 million.
The share price has actually fallen by 28% since October 2016, I think this provides a good entry price for a growing, defensive business that can keep making acquisitions to boost its business.
Hansen is trading at 23.7x FY16’s earnings with a grossed-up dividend yield of 2.97%.
BWP Trust (ASX: BWP)
BWP is the real estate investment trust (REIT) that focuses on owning well-located Bunnings Warehouse properties and leases them to Wesfarmers Ltd’s (ASX: WES) Bunnings.
The recent closure of Woolworths Limited’s (ASX: WOW) Masters has meant some Bunnings will be relocated to Masters sites. Some of BWP’s properties will be left untenanted. It is for this reason (as well as the US Federal Reserve potentially raising interest rates) that the share price is declining.
This could be a good time to buy BWP whilst sentiment is negative and the dividend yield on offer is getting higher.
BWP is currently trading with a trailing unfranked dividend yield of 6.23%.
I think all three of these businesses are trading at attractive value. If had to decide my order of preference at the current prices it would be Crown, then Hansen, and finally BWP. If none of these businesses look attractive to you, then these three great blue chips could be exactly what you want.
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Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia owns shares of Hansen Technologies. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.