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Buy these 3 stocks to instantly diversify your portfolio

Don't put all your eggs in one basket...

I believe that diversification is important to achieve satisfactory returns in the short-term and the long-term.

Diversification doesn’t just mean spreading your money among Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and Telstra Corporation Ltd (ASX: TLS).

I think it’s important that investors spread their money across different industries and different businesses that have good growth prospects.

Here are three I think fit the bill:

Capilano Honey Ltd (ASX: CZZ)

Capilano is a small cap business but a huge player in the honey industry. I’m sure we’ve all seen the honey products in the supermarket.

The main reason why I think Capilano could be a decent growth share is that it’s growing its export sales, which could grow the bottom line nicely over time as we’ve seen with other Australian-made exporters to Asia in recent years. Capilano has recently hired a marketing team specifically to sell into China.

In its recent half-year report it delivered revenue growth of 5.7% and underlying operating profit grew by 10.8% in what was meant to be difficult trading conditions.

National Veterinary Care Ltd (ASX: NVL)

National Veterinary Care is the second largest veterinary clinic business in Australia and New Zealand.

I believe it has a defensive set of earnings because people are more willing to spend what it takes to keep their pet alive due to the ‘humanisation’ of pets effect.

National Vet Care has been steadily adding vets to its network which should hopefully improve margins. It certainly adds revenue and profit quickly to the business.

Around two thirds of cats and three quarters of dogs go to a vet each year, which provides a nice source of recurring revenue.

MNF Group Ltd (ASX: MNF)

MNF is a large voice over internet protocol (VoIP) provider that has many large clients including Skype and Uber.

The business has done very well at growing organic revenue and has recently announced two more growth initiatives that could drive MNF further. The first is that it’s launching over-50 telco brand, Pennytel, and it also just acquired a business in Singapore that could make it a sizeable operator in the Asian city-state over time.

Foolish takeaway

All three businesses have been growing at compelling rates in recent years and they have all set plans in motion to continue that growth over the next few years. The bonus is that they’re all trading at reasonable valuations, particularly MNF and National Vet Care.

Want some more diversification ideas? You should read about these growth shares.

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Motley Fool contributor Tristan Harrison owns shares of NATVETCARE FPO. The Motley Fool Australia owns shares of and has recommended MNF Group Limited and Telstra Limited. The Motley Fool Australia owns shares of Capilano Honey Limited, National Australia Bank Limited, and NATVETCARE FPO. 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 Scott Phillips.

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