If you’ve reached the point of peak frustration with the interest rates available on your term deposits, you may have decided to switch strategies and explore the Australian Stock Exchange.
If you’re ready to take 100% control of your own destiny on the share market, why not kickstart your portfolio with 3 iconic, historically reliable Australian companies. I’m talking about Qantas Airways Limited (ASX: QAN), Telstra Corporation Ltd (ASX: TLS) and Commonwealth Bank of Australia (ASX: CBA).
Buying Qantas shares today will cost you $7.20 and you’ll get a healthy fully franked dividend at 5.00%. If you think Qantas might be for right for your starter portfolio, you’ll need to consider the current environment and where any future growth may come from. Whilst business travel may stay relatively consistent, the holiday market can fluctuate and relies on disposable income.
At a recent Investor Day, Qantas announced future growth initiatives in the Asian market and a stable domestic market as key reasons to feel positive about the carrier heading into 2020.
Investors looking for green credentials should make a note of Qantas’ ambitious target of net zero carbon emissions by 2050.
Telstra bounced back in 2019 after a relatively disappointing 2018. To highlight this point, Telstra shares have increased 21% in value over the past year. Looking forward, there are some great growth opportunities ahead with the roll out of the new 5G network. Last week, Telstra held a 5G launch in regional Victoria where tests revealed speeds up to 728Mbps – that’s a whopping 7 times the current speed of the 4G network and a serious alternative to the NBN.
You can pick up some Telstra shares today for $3.73 and then look forward to a modest gross dividend yield of 3.86%.
The first thing you’ll notice when you study CBA’s fundamentals is a very attractive fully franked dividend yield of 7.79%. There’s no way of knowing if that rate will hold going forward but whilst others have adjusted dividends downwards in recent years, the Commonwealth Bank dividend has remained steady.
Current investors would have been disappointed in the 4.7% drop in net profit for FY19 but signs that the housing market is re-energising itself could point to some improvements in the credit market as home buyers look for good mortgage deals. Ideally, the RBA won’t drop interest rates any further.
You can purchase Commonwealth Bank shares today for $79.28. If you’re still hesitant, I’d highlight that despite some challenges the share value has risen more than 13% over the past 12 months. How does that compare to the interest rates offered on your term deposits?
If you’re a “first -timer” managing your own share portfolio, you could do well to add all 3 of these shares. You’d get instant portfolio diversity and some historically stable Australian companies, with plenty of opportunities for future growth. Do your own research and read widely, and if you do decide to purchase one or all these shares, hang on to them for the long haul.
Motley Fool contributor JWoodward has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 Scott Phillips.
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