Insurance Australia Group Ltd
With Insurance Australia Group Ltd (ASX: IAG) set to release results shortly, its short-term share price movement could be somewhat more erratic than usual. However, when it comes to long-term volatility, IAG could be a useful way to make your portfolio price changes less sudden, but still also provide excellent growth.
That's because IAG offers a potent mix of defensive qualities and upbeat growth prospects. For example, it has a beta of just 0.58, which indicates that its share price should move by just 0.58% for every 1% change in the price level of the ASX, thereby providing a less volatile shareholder experience.
And, with IAG forecast to increase its bottom line by 5.8% next year, it could prove to be a much more reliable growth play than is currently being priced in by the market, with its price to earnings (P/E) ratio of just 12.2 indicating that an upward rerating is relatively likely.
Ramsay Health Care Limited
As an operator of private hospitals, Ramsay Health Care Limited (ASX: RHC) offers supreme defensive qualities, since its sales and profitability are very consistent. This is perhaps best evidenced by a bottom line that has increased at an annualised rate of 17.2% during the last five years.
In addition to this consistency, shares in Ramsay should also be less volatile than the ASX in future. That's because they have a beta of just 0.5, and with the outlook for the ASX being very opaque, such a low beta could help to increase demand for Ramsay's shares.
Furthermore, Ramsay's strategy of expanding into new territories (such as China) could provide a boost to its profitability and offer a more appealing earnings profile in the long run.
Woolworths Limited
Investors looking for consistency at the present time could be drawn to Woolworths Limited (ASX: WOW). That's because, over the last 10 years, it has delivered relatively stable and impressive growth in many financial metrics, such as cash flow per share, which has risen at an annualised rate of 10.1% during the period. This shows that Woolworths is capable of delivering a sustained rate of growth over a long period, which could boost investor sentiment in the stock moving forward.
Certainly, the future could be challenging, with increased competition having the potential to squeeze margins. But, with the potential for an uplift to sales from lower interest rates, as well as a beta of just 0.66, Woolworths seems to offer the perfect mix between growth potential and defensive qualities. As such, it could prove to be a top performer over the medium to long term.
