While it's true that elephants don't gallop and that mega-cap stocks find it more difficult than smaller peers to grow earnings, that doesn't mean sector leaders should be avoided.
In fact, with the ASX having fallen in recent months, now could be a great time to buy slices of some of the biggest names in the Aussie economy. Not only could they offer good value, they may be better able to weather the ups and downs that the ASX is currently experiencing.
So, here are three of Australia's biggest stocks; all of which seem to have bright futures and could be worth buying right now.
Westpac Banking Corp
One advantage of larger, more mature companies is their strong cash flow. Indeed, this often enables them to be more shareholder-friendly when it comes to the payment of dividends and, in this space, Westpac Banking Corp (ASX: WBC) excels.
That's because the blue-chip bank currently offers a fat, fully franked yield of 5.3% and, perhaps more importantly, Westpac has a positive track record of dividend increases. For example, over the last ten years they have risen at an annualised rate of 9.5%, which is over three times the current rate of inflation.
Although shares in Westpac currently trade on a P/E ratio of 14, their income potential could be enough to keep demand (and share price performance) positive in 2015.
BHP Billiton Limited
It's a similar story at BHP Billiton Limited (ASX: BHP), with it currently offering a fully franked yield of 4.1%. However, there's much more to BHP than just a strong yield. That's because the company has concentrated on becoming more efficient in recent years and has quite literally turned the disaster of falling commodity prices into an opportunity to refocus on its cost base and to put the company on a stronger financial footing.
As such, earnings are due to rise by almost 28% next year and, with shares in BHP having a P/E ratio of just 13.2, a PEG ratio of 0.5 shows that this mega cap could deliver strong gains in 2015.
Woodside Petroleum Limited
Although the declining oil price is making life tough for oil stocks such as Woodside Petroleum Limited (ASX: WPL), Australia's biggest oil and gas producer (by market cap) has seen its share price rise in-line with the ASX over the course of 2014, being up 2%.
However, there could be much more to come in 2015 as Woodside Petroleum is expected to continue with the strong earnings growth of the last decade (where the bottom line has risen at an annualised rate of 10.2%) to post earnings growth of 15.4% per annum over the next two years.
Furthermore, with a PEG ratio of 0.8, Woodside Petroleum seems to scream growth at a reasonable price, which means that its share price could easily beat the ASX next year. And, with a fully franked yield of 5.9%, demand from income investors could help to make that happen, too.
