The minutes released yesterday from the Reserve Bank's last meeting have indicated that the nation's official cash rate will remain at its record low of 2.5% for the foreseeable future until there is more promising evidence of job growth. Here are three companies which should continue to benefit from the low interest rate environment:
Brickworks Limited (ASX: BKW): One of the more obvious industries to continue benefiting from low interest rates is the housing construction industry. Brickworks, a clay and concrete building materials producer, is well positioned to profit from the cycle. The company recently advised that the strong growth momentum in its Building Products businesses should help the company deliver a "significant increase in earnings for the full year". Brickworks is 44% owned by conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Shares are currently trading for $13.62 and offer a 3% fully franked dividend yield.
Yellow Brick Road Holdings Ltd (ASX: YBR): There's plenty to be excited about for shareholders of the mortgage broker. The company recently announced it was in discussions regarding three potential acquisitions while it should also achieve its maiden profit next year. What's more, low rates and improving consumer confidence should see its services remain in high demand as customers looking to buy a home seek the best possible mortgage product to suit their individual needs. Shares are currently trading at just 61c.
NIB Holdings Limited (ASX: NHF): Despite recently increasing its premiums across most of its products, the insurance group still remains as one of Australia's most affordable health care funds which should keep attracting customers and boosting revenue. While it is benefiting from heavy population growth and concerns regarding the public hospital system, low interest rates will also help ensure higher demand. Priced at $2.74 and offering a fully franked 3.8% yield, there's plenty to like about this company.
Foolish takeaway
While the companies mentioned above should each continue benefiting from the current economic environment, you should also look to acquire companies which will blossom when interest rates inevitably rise. Debt collection group Collection House Limited (ASX: CLH) is a very good bet – when interest rates rise, so will bad debts which will see Collection House's services in higher demand.
