We all want to be smart with our money. Finding a good bargain is one thing, but squeezing every drop of value and profit out of each dollar we spend is the goal of smart investors.
I recently wrote about 2 smart investing stock picks that could be money makers for Foolish investors. Today I want to follow up with three more that could round out a 5-stock portfolio to power your future returns.
Now, when I look for good income stocks, I want to see:
– a high yield, preferably fully franked to maximise tax benefits.
– good growth in earnings or dividend payments (both is optimum).
– some kind of change happening with the company that could drive future earnings and share price gains, making current share prices relatively cheap.
OrotonGroup Limited (ASX: ORL) is a handbag and accessories creator and retailer. It also has retail rights on well-known brands such as Brooks Brothers and The Gap in Australia. It is expanding into brand conscious locations like Singapore, Hong Kong and Dubai.
It offers a stunning 7.3% dividend yield fully franked. The company is restructuring, which should bring out better margins, but the kicker here is that as general retail trade improves, it could also become a takeover target for other fashion retailers, especially after the takeover of David Jones.
Woodside Petroleum Limited (ASX: WPL), the $34 billion oil and gas giant, is still bringing in substantial revenue from its operating LNG projects, but it is hungry for growth. It has been talking about business opportunities with companies such as Oil Search Limited (ASX: OSH), which has interests in the PNG LNG project.
Also, it will be exploring and developing potential oil resources in Africa with Beach Energy Limited (ASX: BPT), so there are at least two areas Woodside can possibly expand into. The share price has been rising steadily since mid-2012, but the yield is still a whopping 5.8% fully franked. This is the kind of blue-chip stock you tuck away in your portfolio and let slowly accumulate over time for satisfying long-term growth and income.
Lastly, Automotive Holdings Group Ltd (ASX: AHE) is forecast by a consensus of analyst views to have strong earnings growth over the next few years. It has the largest auto dealership network in Australia, as well as now being the operator of the biggest refrigerated transport and warehousing business nationwide. Low interest rates allow for cheaper vehicle financing, which should boost auto sales.
The stock offers a very healthy 5.4% yield, again, fully franked. Dividend payments are projected to rise along with earnings, so the initial income you could get right now will be even more rewarding over the near term.
