Overseas markets like the U.S. and Asia are pulling themselves up, moving forward and hitting new highs while our domestic market is facing further headwinds. Interest rates have been low to spur on economic activity and it is possible they could be cut a little more. That doesn't speak of a recovery here soon.
A higher Aussie dollar is also keeping the pressure on the RBA to maintain low rates. The handover from the mining industry to the services sector to do the heavy lifting isn't occurring and even retail trade has been feeling the pinch.
So it is not surprising that Macquarie Group Ltd (ASX: MQG) issued a report showing Australian companies expanding overseas are looking towards much better earnings growth on average than their counterparts that stayed home. Even market leaders like Telstra Corporation Ltd (ASX: TLS) have big international expansion plans because they see the writing on the wall.
Within the report, Macquarie Bank highlighted the following companies it thinks will have significantly better earnings in the short to mid-term from higher growth abroad. Get your portfolio ready to take advantage of these stocks and follow the opportunities.
— Healthcare
Aussie medical company success stories headline the list. CSL Limited (ASX: CSL), the blood disorder and disease treatment developer is a perennial grower with analysts forecasting earnings up more than an average 10% annually over the next two years. Sirtex Medical Limited (ASX: SRX) develops liver cancer fighting treatments and is a great company I wrote about earlier for Foolish readers. Next, Sonic Healthcare Limited (ASX: SHL) provides medical diagnostic imaging and pathology services, generating about half of its revenue overseas. Both earnings and dividends are forecast to grow at a strong pace in the next two years.
Those by themselves are three strong stock picks I would regularly back, but to be well diversified here are three more.
— Flight Centre Travel Group Ltd (ASX: FLT): A well-known brand in Australia, it is making a name for itself in the UK, the US and now in Asia where the travel markets are much, much bigger. If offers an attractive 3.4% dividend yield and strong earnings prospects, yet is not priced sky-high right now.
— Domino's Pizza Enterprises Ltd (ASX: DMP): The takeaway restaurant is growing in Japan after acquiring a 75% stake in Domino's Pizza Japan. It projects it can more than double the existing 260 stores there over the next five years. Smell the dough – the earnings, that is. Chain restaurants in growth phases can be wonderful investments!
— SEEK Limited (ASX: SEK): Another wonderful company I sang the praises of previously, it is working its way into South East Asia and China by investing big in existing job search website companies. It can transplant its market-leading employment placement expertise and technology into these developing markets. The price/earnings ratio is 30, yet both earnings and dividends are forecast by analysts to grow an average 20% annually over the next two years. You will have to pay up for that kind of expected growth, but it could be well worth it.
