3 shares to benefit from the Asian middle-class boom

The Asian middle class is one of the fastest growing groups of people in the world. Asia has been the Earth’s manufacturing powerhouse for a while now and the owners of those businesses, as well as normal business owners, have really benefited.

The middle class now want to enjoy their money after a life of working, earning and saving.

This should benefit the countries and companies that they visit and use. Here are three ASX-listed companies that could benefit in the years ahead:

Treasury Wine Estates Ltd (ASX: TWE)

Treasury Wine is the company behind wine brands such as Penfolds and Yellowglen.

The Asian middle class wants to drink all of the quality wine that the western middle class do, which can be seen in Treasury Wine’s 38.7% growth of Asian net sales revenue in its report for the six months to 31 December 2016.

Treasury Wine could have a strong few years as it boosts exports. It’s currently trading at 35x FY17’s estimated earnings with an unfranked dividend yield of 1.84%.

Crown Resorts Ltd (ASX: CWN)

Crown is the owner and operator of the Crown resorts and casinos in Melbourne and Perth.

When Asian tourists come to Australia, some of them want to stay at the best hotels on offer and gamble in casinos. Crown is a clear beneficiary from this tailwind. It could benefit even more with its new casino project at Barangaroo in Sydney.

Crown is currently trading at 25x FY17’s estimated earnings with a committed forward partially franked dividend yield of 4.67%.

A2 Milk Company Ltd (Australia) (ASX: A2M)

A2 Milk is the company behind the milk, baby formula and ice cream of the same name.

The company has been rapidly growing its sales into China, in its six month report to 31 December 2016 it reported that China and other Asia revenue had grown by 348%.

A2 isn’t cheap trading at 34x FY17’s estimated earnings and doesn’t yet pay a dividend.

Foolish takeaway

I think all three companies are worthy of being in most portfolios due to their projected growth over the next decade. At the current prices, I think Crown looks like the best buy to me, it’s trading cheaper than the other two options and will also provide investors with a nice dividend return.

The best stock to benefit from the growth of the Asian middle class could be our number one dividend stock for 2017 as it is expanding in China.

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Motley Fool contributor Tristan Harrison has no position in any stocks mentioned. The Motley Fool Australia owns shares of A2 Milk and Crown Resorts Limited. 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.

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