Shipping pallets are pretty boring – unless you have 470 million of them and rent them out to virtually every manufacturing supply chain.

Brambles Limited (ASX: BXB) is the company behind CHEP pallets, and as long as manufacturers rely on forklifts and standardised shelving to transport goods from the factory floor to the retail outlets, Brambles will be ringing the cash register.

My first exposure to the Brambles' business model came when I was working part-time at Mitre 10 while still at school.

Every few weeks management would get their knickers in a knot about how many blue CHEP pallets were sitting idle in the loading yard and docks, and it would usually be left to one of us juniors to stack them up ready to be transferred back to the CHEP depot.

The reason that the managers would see red every time they spotted an empty blue pallet had me baffled. It wasn't until they explained that each pallet was charged out at a rate of a few cents a day that I understood how the CHEP business could make extraordinary profits.

Even at my local Mitre 10 store, I would regularly gather up 50-odd pallets to be returned on the next semi-trailer. Not to mention the few hundred sitting on the racks still holding stock.

Multiply that by every loading yard, supermarket dock and warehouse in Australia and you are starting to see how 470 million pallets charged out at a few cents a day can add up to a company worth $17.3 billion.

The fact that Brambles provides logistics equipment to such a diverse range of industries, give it steady earnings no matter what challenges may be facing any one particular industry.

Although its business is very simple, the provision of standardised pallets is crucial to the way supply chains operate.

The ability for any forklift to load any truck with the pallets, and for the reverse to happen at the other end, means that huge investments have been made by all supply chains based on the size and specification of CHEP pallets.

That gives Brambles a huge moat for potential competitors to cross, and game-changing innovation in this field would rely on whole supply chains replacing their infrastructure.

Foolish takeaway

Brambles may look a pretty boring blue-chip, and with a dividend of 2.54% franked at 30%, you can see why many ASX thrill-seekers would turn their nose up at the humble pallet maker.

But when it comes to dominant companies with a strong record of growing profits, it is usually hard to buy them at bargain prices.

Investors who have been compounding their Brambles returns for years simply don't let that happen.

The post Why this ASX blue chip is a company to buy today and hold forever  appeared first on The Motley Fool Australia.

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The float of Medibank Private Ltd (ASX: MPL) late last year was fortuitiously timed for early investors, with the ASX 200 surging in early 2015 and lifting its share price 20% to a high of $2.56.

Medibank is now trading close to its original listing price at $2.08, but this is one company I am happy to leave off my watch list.

I may be proven wrong in time, but I cannot see the value in holding private health cover for my own family – and therefore cannot see the value in investing in Medibank Private.

We live in regional New South Wales and have access to a local public hospital. I am 30, my wife is 28, and our two boys are under 3.

Last month I received a letter from the federal government reminding me that unless I start forking out for private healthcare before June 30, I will face a 2% increase in premiums for each year that I delay in taking up health cover.

We had already made the conscious decision to not join a private health fund, but it was cause for me to again investigate exactly what the government was asking me to sign up for.

According to the Medibank Private website quotes, the best match for my family would be the "New Families Comprehensive" cover at $72.37 a week.

For just $3,763.24 each year I could have the luxury of an extra plastic card in my wallet and the option for a free dental check-up and optometrist visit.

Sorry Tony Abbott and Joe Hockey, but I think I'll stick to the Medicare-funded public services that I pay for each time I fill out a tax return.

Given that my wife and I are reasonably fit and active, young, and non-smokers, the risks of us having to attend the hospital for anything other than an emergency situation are low.

If (heaven forbid) we do have a serious accident, there is only one hospital that the ambulance will be rushing us to, and it is the very same public hospital that would treat us if we were private healthcare members.

We do hold ambulance cover for a small fee each year, but we'd much rather invest the $3,763 private healthcare fee we are not paying in strong, dividend-paying companies that will return far more than the punitive 2% surcharge for "defaulters" like us who refuse to pay extra for private health cover.

Foolish takeaway

Everyone's situation is different, but in uncertain economic times with historically high unemployment and low wage growth, many young families like my own are likely skipping the optional expense of private healthcare.

From the perspective of a potential investor, policy holders who do think private health cover is good value are likely to be those with higher healthcare needs, who in turn will be a drain on Medibank Private's profits.

Of course I must note that those who live in our major cities have access to better private hospitals or extra benefits from their memberships, but if I am ever lying in a hospital bed after an accident, having my own room with a blu-ray player will be the least of my worries.

Until I see a better value offering for young families, or those in regional Australia, I simply won't be investing in Medibank Private.

The post Why I'm avoiding private health insurers like Medibank Private Ltd appeared first on The Motley Fool Australia.

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Have you ever stopped to think how your family could be affected when the next financial crash occurs? The good news is that there are ways to position your portfolio now to defend against the inevitable bad times.

High quality, dividend-paying stocks in essential industries will typically perform well across all stages of an economic cycle, and the best value of these may be staring you in the face.

Woolworths Limited 

Woolworths Limited (ASX: WOW) has traditionally been a great defensive stock with an ever-increasing dividend and capital growth to match.

The owners of Australia's largest supermarket chain, Woolies has a prime location in almost every town in Australia, and along with Coles (owned by Wesfarmers Ltd (ASX: WES)) enjoys significant market share.

Even better, the near 30% fall in share price in the past year, which sees Woolworths trading on a very enticing price-to-earnings ratio of 14.2, with a fully franked dividend of 5.1%, means that this is an investment to make now and enjoy in all parts of economic cycles for the next 50 years.

There are plenty of voices out there shouting that the Masters hardware venture has been a flop, but I believe those concerns are overplayed and that eventually Masters will be one of the great growth drivers for Woolworths.

The bottom of the share price for Woolworths may not have been reached yet, but I'm not waiting to snap up the 5.1% fully franked dividend in today's low interest environment.

Collins Foods Ltd.

High priced restaurants may take a hit in a recession, but fast food companies like Domino's Pizza Enterprises Ltd. (ASX: DMP) should remain solid performers throughout the economic cycle.

People still eat out when times are tough, and a trip to the local take-away is a small luxury that can be enjoyed by almost all members of society no matter what the markets are doing.

Domino's enormous share price rally in recent times has pushed its price-to-earnings ratio to 57.4 and makes it fully valued – and the 1.25% dividend it is paying to investors is not as tasty as its stuffed crust meat-lover's pie.

A great alternative at current prices is Collins Foods Ltd (ASX: CKF), Australia's largest owner and operator of KFC franchises, Sizzler Restaurants and the newly created Snag Stand.

It is trading on more conservative price-to-earnings ratio of 13.7 and is paying out a 4.3% fully franked dividend.

If the hot chips at its Snag Stand franchise are anything to go by, this is a company that has the potential to really accelerate dividend growth as its new chain expands.

Collection House Limited

Following a market crash, it's not uncommon to see borrowers defaulting on debt at a higher rate than usual.

Listed debt collection companies like Collection House Limited (ASX: CLH) generate revenues by buying debt ledgers from other companies unwilling or unable to chase up their own accounts, usually at a deeply discounted rate.

Collection House buys these debts at cents on the dollar and pays an ever-growing dividend to investors yielding 3.8% fully franked.

A recently announced partnership trust with Balbec Capital to buy even bigger books of debt adds another revenue stream, and any market squeeze is sure to generate more customers for Collection House to chase up and steer into its debt repayment plans.

Foolish takeaway

Fortune favours the prepared, and you can take steps now to ensure your investment portfolio is ready for whatever the global markets throw at you in coming years.

Better yet, if the sky does not fall, these companies will have no trouble continuing to do what they do best – paying out juicy dividends to investors!

The post  3 defensive stocks to own if the market crashes  appeared first on The Motley Fool Australia.

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James Packer-led Crown Resorts Ltd. (ASX: CWN) is trading only slightly above 52-week lows reached in January after disappointing results from the company's Macau partnership led investors to sell down the stock late last year.

Worried traders cut their stake in the luxury resorts and gaming company as concern over reduced income from Macau threatened to hurt the bottom line. But the share price enjoyed a subsequent 30% surge into February and had investors cheering louder than a table full of craps players at Melbourne's Crown Casino.

That rally was supported by a weaker Australian dollar and hopes that the Queensland government would announce Crown as the winner of the tender for the Queens Wharf Casino in Brisbane.

The Queensland state election at the end of January put the brakes on the Queens Wharf announcement (which was loosely scheduled to be made "in early 2015") but with the Aussie dollar sinking lower in recent days, the same catalysts again exist to propel the share price higher.

Crown Resorts' share price has since slid back below the $13 mark, sitting at a price-to-earnings ratio of 18.5. Some investors will no doubt be tempted to try and pick the bottom of the market and get in before a potential windfall if Crown were to be awarded the opportunity to develop the Brisbane precinct.

At the current valuation, a 2.8% dividend franked at 50% gives buyers some reassurance to ride out any further share price falls in the short term should Queensland choose rival casino operator Echo Entertainment Group Ltd. (ASX: EGP).

Long-term holders of Crown Resorts are sitting on a very tasty share price increase since 2012 and can continue to look forward to further gains as it realises many of the other projects already approved and in the pipeline.

Just this week the company reported to investors that it has entered into agreements with the Barangaroo Delivery Authority and Lend Lease that give it the opportunity to further develop the Crown Sydney site at Barangaroo South, subject to receipt of New South Wales planning approval.

Crown Resorts also has current projects in Las Vegas, Manila and Macau as it extends its luxury resorts brand to distant shores.

Closer to home, the recent partnership with BetEasy to form sports bookmaker CrownBet in December last year looks to have bedded down well and will continue to diversify Crown Resorts' domestic wagering operations.

Foolish takeaway

The growth opportunity that Crown offers is tantalising, but investors need to have an appetite for risk as the share price is in a constant state of flux and any adverse announcements can send its traders into overdrive.

The company is poised to cash in long term on the burgeoning Asian middle class with resorts catered directly to that ever-growing tourism market.

Picking the bottom of the stock cycle is a dangerous game, but those willing to roll the dice on Crown Resorts can do so knowing they are buying a solid, long-term earner trading at a reasonable price.

The post Is now the time to stack your chips on Crown Resorts Ltd.?  appeared first on The Motley Fool Australia.

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There has been plenty of support for retailers JB Hi–Fi Limited (ASX: JBH) and Harvey Norman Limited (ASX: HVN) since Joe Hockey spruiked his "have-a-go budget" to small business owners with a $20,000 tax incentive.

But after the dust settles and every small business owner in Australia has had their fill of new LCDs and laptops, very few traditional retailers have the capacity to turn the budget splash into long-term cash.

Enter quiet achiever Automotive Holdings Group Ltd. (ASX: AHG), Australia's largest motoring group.

While the share price has crept back up to 52-week highs on the back of the budget news, there is still plenty of reason to be a buyer at today's price, especially when a 4.8% fully franked dividend is thrown in.

Now that a small business can write off any expense under $20,000 automatically (think new hatchbacks, used trucks and tradies' utes) it is natural to be bullish about Automotive Holdings' dealership arm.

And with 100 dealerships spread across the country, that arm is a strong one.

Automotive Holdings is Australia's largest aggregator of what remains a hugely fragmented sector – with many dealerships still being run as individual or family businesses.

So while the company keeps its showroom floors ticking with new car sales, the cash register only really begins to sing once those customers sign on for the finance deals, purchase the extended warranties and return for dealership services.

Automotive Holdings will even make a quid selling spare parts back to the very same customers as their cars age!

Therin lies the beauty of the business for investors.

Automotive Holdings is uniquely positioned in the consumer discretionary space, not only for a short-term boost from the government's largesse, but also to turn it into meaningful earnings over the longer term.

Automotive Holdings has been a real momentum stock over the past five years as increased efficiencies across its car operations and the astute acquisition of privately owned retailers have snowballed it into the ASX 200.

But management has been carefully spreading its wings into other aspects of road transport as well.

Automotive Holdings now boasts a number of logistics businesses across Australia, including Rand Transport, Harris Refrigerated Transport, Scott's Refrigerated Freightways and JAT Refrigerated Road Services.

This leaves the company positioned as the largest cold storage logistics business in the country, and last year alone it shipped 8.2 million pallets of frozen, chilled and fresh goods.

Foolish takeaway

While the new car industry can be cyclical and follow general trends in the wider consumer discretionary space, the opportunities presented to Automotive Holding Group by the recently announced budget measures are a pointed reminder of what makes Automotive Holdings stand above the crowd.

While the current price sits at the peak of historical graphs, there is a long road ahead for Automotive Holdings. But its ability to pay strong fully franked dividends that grow year on year makes this stock one that won't depreciate as soon as you drive it off the lot!

The post Is this the best stock to capitalise on the budget stimulus?  appeared first on The Motley Fool Australia.

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