After a disappointing 2014 when the ASX posted a return of just 1%, many investors are seeking out stocks that could give their portfolios a welcome boost in 2015.
Certainly, there are a number of them out there, and with interest rates having the potential to be cut this year and stimulate the ASX, there could be share price gains on offer during the course of the year.
With this in mind, here are three stocks that could perform well this year and make a positive contribution to your returns.
Origin Energy Ltd
With Origin Energy Ltd (ASX: ORG) being in the headlines of late regarding changes to the way it bills customers, it's easy to overlook its investment potential. And, with the price of oil having fallen in recent months, the market appears to be lukewarm at best regarding its future prospects.
However, this situation creates an opportunity, since Origin offers excellent growth potential at a very reasonable price. For example, it has a price to earnings growth (PEG) ratio of just 0.63, which is appealing on an absolute basis and when compared to the ASX's 1.98, becomes even more so.
Origin also has a history of increasing dividends at a rapid rate (dividends per share have risen by 14.7% per annum over the last ten years), so it could prove to be a strong income, as well as growth, play in 2015.
Suncorp Group Ltd
The last five years have seen Suncorp Group Ltd's (ASX: SUN) cash flow improve significantly. In fact, it has increased at an annualised rate of 18.2% during the period, which has helped to put the company on a firmer financial footing for the long term.
In addition to this, Suncorp still offers excellent value for money. That's despite its share price having risen by an incredible 58% during the last five years, with it still trading on a lower valuation than the wider insurance sector. For example, Suncorp has a price to book (P/B) ratio of just 1.29, while the sector has a P/B ratio of 1.92. As such, Suncorp could be due an upward rerating during the course of the year.
Furthermore, Suncorp's strong growth in profitability also means that dividends are forecast to be covered by profit in the current year after a period when they were not. This makes its current shareholder payout more affordable and means that a yield of 6.1% should be relatively sustainable moving forward. As such, now could be a great time to buy a slice of Suncorp.
Wesfarmers Ltd
There is an understandable fear among many Aussie investors that the retail sector is not a great place to invest in at the moment. After all, the economy is enduring a challenging period and this could make the performance of retailers such as Wesfarmers Ltd (ASX: WES) disappoint moving forward.
However, Wesfarmers continues to have huge appeal, since the company offers robust growth prospects at a very reasonable price. For example, it has a PEG ratio of just 1.46, which is good value on an absolute basis, but is even more appealing when you consider that the wider market's PEG ratio is much higher at 1.98.
In addition to great value, Wesfarmers also offers investors an excellent defensive profile. For example, it has a beta of just 0.66 and this means that it should have less volatility than the wider index. Therefore, it could offer relative stability as well as share price upside and, as a result, it could be worth adding to your portfolio.
