Commonwealth Bank of Australia
Results released this week by Commonwealth Bank of Australia (ASX: CBA) were positive and showed that the bank is making good progress with regards to its bottom line growth. For example, cash earnings came in 8% higher than in the first half of the previous year, with dividends per share increasing by the same amount year-on-year. However, while the results were slightly ahead of market expectations, shares in the bank closed down almost 1% on the day.
Of course, CBA remains a highly appealing stock to own at the present time. Certainly, its valuation is rather rich, with it having a price to earnings (P/E) ratio of 16.6 for example. But, when you consider that it has increased its bottom line at an annualised rate of 11.6% over the last five years, and is forecast to do so by 6.1% per annum in the next two years, it appears to be a solid, long term investment that could see its rating move higher. As such, now could be a good time to buy a slice of it.
Scentre Group Ltd
The operator of Westfield's Australian and New Zealand assets, Scentre Group Ltd (ASX: SCG) may appear to be a rather richly valued stock at the present time. That's because it has a P/E ratio of 18 which, when the ASX has a P/E ratio of 15.9, seems to be rather high.
However, Scentre continues to offer investors an appealing mix of income and growth prospects. For example, it currently yields a very enticing 5.2% and this could increase in appeal should interest rates move lower, thereby helping to push Scentre's share price higher. And, with there being scope for higher levels of consumer spending moving forward owing to a loose monetary policy, Scentre's earnings growth forecast of 7.3% per annum over the next two years could be subject to an upgrade.
As a result, now could be a great time to add Scentre to your portfolio.
CSL Limited
Shares in CSL Limited (ASX: CSL) slumped by around 8% yesterday, as the pharmaceutical company reduced its profit guidance for the full-year. The main reasons for this were increased demand for cheaper products and tight government spending, although CSL is still expected to increase its bottom line by 10% in the current year.
That's an impressive rate of growth and, looking ahead, its share price could move higher due to it offering above-average growth prospects at a very reasonable price. For example, CSL has a price to earnings growth (PEG) ratio of just 1.3 which, when the ASX has a PEG ratio of 2.1, indicates that its share price could still perform well in the medium to long term.
Therefore, while market sentiment may decline somewhat in the short term, CSL remains an excellent long-term investment.
