Rio Tinto Limited
Despite 2014 being a very challenging year for Rio Tinto Limited (ASX: RIO), the company seems to be doing all of the right things. For example, even though the price of iron ore has collapsed, it has increased production in an attempt to grow its market share and has also focused on keeping its cost curve as low as possible. This means that, while profitability is likely to fall over the next couple of years (by 22.2% per annum according to latest forecasts), Rio Tinto could emerge a stronger business relative to its peers.
And, with the company trading on a price to sales (P/S) ratio of just 1.85, it seems to offer good value at a time when the wider materials sector has a P/S ratio of 2.7. As a result, now good be a great time to buy a slice of Rio Tinto.
Wesfarmers Ltd
With interest rates being just 2.5% and having the potential to move lower this year, many investors are placing even more emphasis on dividends at the present time. While Wesfarmers Ltd (ASX: WES) has a great yield of 4.6% (fully franked), investors may also be attracted to the stock because of its recent history of delivering excellent dividend per share growth.
For example, Wesfarmers has increased dividends per share at an annualised rate of 12.5% over the last five years. This means that its dividends are over 80% higher today than they were in 2010, which is an incredible rate of growth and is likely to instill confidence in its investors moving forward.
Also, with Wesfarmers currently trading on a P/S ratio of just 0.83 versus 0.99 for the wider food and staples retailing sector, its share price could move upwards during the course of the year.
Suncorp Group Ltd
While the ASX's returns may have disappointed somewhat in recent years, the same cannot be said for Suncorp Group Ltd (ASX: SUN), which has posted total shareholder returns of 16.8% per annum over the last five years. That's an excellent rate of growth and shows that the bank has much more to it than just a great yield.
Of course, that's not to say that Suncorp isn't worth buying for its yield alone. In fact, the diversified financial play currently yields a fully franked 5.8%, which at a time when savers are set to see their income from cash decline, could make Suncorp one of the hottest income stocks in the ASX. This, combined with its beta of just 0.8, means that Suncorp could prove to be a relatively robust dividend play in 2015 and its share price could react positively as a result.
