With the ASX continuing to fall, it may seem as though generating a decent return from your investments is impossible. After all, the index has fallen by 6.7% in the last month alone and is now trading at its lowest point since February.
However, there are still a number of high quality companies that could not only beat the ASX moving forward, but which could help you retire early, pay off the mortgage, or simply increase your net worth.
Here are three prime examples that could help restore your faith in the beleaguered ASX.
CSL Limited
Shares in CSL Limited (ASX: CSL) have vastly outperformed the ASX over the last month, being down just 1% versus the ASX's fall of 6.7%. Of course, demand for drugs is pretty consistent and, as a result, pharmaceutical stocks such as CSL are often viewed as attractive defensive plays during periods of high uncertainty.
However, CSL also has strong growth prospects, with its bottom line due to rise at an annualised rate of 14.7% over the next two years. While its P/E ratio of 24.1 is rather high, its PEG ratio of 1.64 looks relatively attractive given its strong growth prospects and equally appealing defensive properties. As a result, it could continue to beat the ASX moving forward.
BHP Billiton Limited
Although much more diversified than sector peers such as Rio Tinto, BHP Billiton Limited (ASX: BHP) is still heavily reliant upon the price of iron ore. So, with it being at a five-year low, it's of little surprise that the company's share price is taking a hit.
However, after a forecast profit fall of 12.2% in the current year, BHP is expected to increase profits by 22.4% next year. This means that its current P/E ratio of 12.5 could be in-line for an uplift, with BHP's fully franked yield of 4.2% also likely to prove attractive to investors if the RBA does move interest rates lower. As such, BHP could beat the ASX over the medium term.
Telstra Corporation Ltd
When it comes to stability, Telstra Corporation Ltd (ASX: TLS) is tough to beat. For example, it has a beta of just 0.5 (meaning its share price should move by half as much as the wider index) and it has a fully franked yield of 5.6%, which could prove very useful if interest rates remain at 2.5% or below.
Telstra, though, has more to offer than just defensive qualities. It continues to dominate the Aussie mobile market and has huge potential in Asia, with the company aiming to generate 30%+ of profits from the continent by 2020.
Furthermore, with shares in Telstra trading on a P/E ratio of 14.4 versus 14.9 for the ASX, there could be an upward rating revision on the cards, too.
