I'm always on the lookout for ways to diversify my portfolio whilst maintaining strong returns. If you can mitigate risk whilst also beating the market then that's a powerful combination.
Diversification usually means investing into different industries and perhaps businesses that offer geographical diversification away from Australia.
Here are three shares that I think would offer good diversification:
National Veterinary Care Ltd (ASX: NVL)
National Veterinary Care is a fast-growing veterinary business that is steadily acquiring more clinics to grow its business.
I believe that the pet industry is a good one to be invested in due to the regular and growing revenue. Organic growth for National Vet Care's vet business was around 3% for the half-year to 31 December 2017.
National Vet Care also has a best-of-practice business that works with other independent vets. This is a good source of extra revenue and it also allows National Vet Care to implement in its own business.
TPG Telecom Ltd (ASX: TPM)
TPG has grown to be one of Australia's largest telecommunications businesses after acquiring iiNet a couple of years ago.
It's not an industry offering explosive growth any more because most of the potential acquisition targets have been bought. However, TPG could still grow a lot in the coming years because it will be launching mobile networks in Australia and Singapore. I think this is a key move because 5G could replace wired broadband as the main choice of most households for their internet needs.
DuluxGroup Limited (ASX: DLX)
DuluxGroup, as the name suggests, is the business that owns the paint brand Dulux. It also owns British Paints, Selleys, Cabot's and Yates.
It has quite defensive earnings because most of its products are low-cost and shouldn't suffer much in a downturn because a cheap product like paint shouldn't see much of a reduction in volume sales.
It also has a decent grossed-up dividend yield of 4.97%.
Foolish takeaway
All three shares look interesting to me. If I had to pick one I'd buy National Veterinary Care because I think its future acquisitions will grow profit strongly for a while to come.
