With world stock markets in a state of flux, life as an investor is tough at the moment.
Indeed, it's all too easy to look at the next few months rather than the next few years when the future looks as uncertain as it does right now.
However, it's times like these when it's possible to buy high quality stocks at bargain prices; thereby setting yourself up for potentially strong long term gains. With this in mind, here are three stocks that you may have overlooked until now, but that could give your long-term finances a welcome boost.
Insurance Australia Group Ltd
Having fallen by just 0.5% over the last three months, Insurance Australia Group Ltd (ASX: IAG) is proving its worth as a relatively defensive stock. Indeed, with the ASX dropping by 6% over the same time period, IAG's beta of 0.5 has proven to be very useful.
However, IAG also has the potential to beat the ASX over a much longer time period. That's because it offers strong income and value potential. For example, IAG currently trades on a P/E ratio of just 11 which, although cheap on an absolute basis, appears to be even better value when viewed alongside the ASX's P/E ratio of 14.8.
Furthermore, with a fat, fully franked yield of 6.5%, IAG has top notch income prospects as well as the potential for an upward rerating to its P/E ratio.
Wesfarmers Ltd
With the RBA seemingly willing to drop interest rates even further to stave off a recession, Wesfarmers Ltd (ASX: WES) could prove to be a superb play moving forward thanks to its reliable dividend payouts.
Indeed, Wesfarmers is expected to grow its bottom line at an annualised rate of 12.8% over the next two years, which is hugely impressive. Further, with shares having fallen by 8.5% over the last month, they now trade on a price to earnings growth (PEG) ratio of 1.54.
When the company's track record of earnings growth is taken into account, this seems to offer growth at a reasonable price and makes Wesfarmers a sound long term option.
Australia and New Zealand Banking Group
When it comes to choosing balanced investments, Australia and New Zealand Banking Group (ASX: ANZ) takes some beating. That's because it offers a potent mix of value, income and growth potential.
For example, shares in the diversified financial services company currently trade on a P/E ratio of just 12.2, which compares favourably to the ASX's P/E ratio of 14.8. Furthermore, ANZ offers a fully franked yield of 5.5%, which is forecast to grow at around twice the current inflation rate over the next two years.
In addition, with earnings expected to grow by 10.7% per annum over the next two years, a PEG ratio of 1.14 highlights that ANZ could now offer growth at a reasonable price and prove to be a strong long-term performer.
