Suncorp Group Ltd
It's been a disappointing start to the year for investors in Suncorp Group Ltd (ASX: SUN), with the finance stock seeing its share price rise by just 0.5% while the ASX is up almost 10% year-to-date. However, Suncorp continues to have excellent long term potential, with it still offering one of the best yields around, as well as a superb track record of earnings growth.
For example, Suncorp currently yields a whopping, fully franked 6%, which is considerably higher than the ASX's present yield of 4.2%. And, with Suncorp having increased its bottom line at an annualised rate of 12.9% during the last five years, it has a great track record that could be replicated in the long run – especially with interest rates falling to new lows.
Woodside Petroleum Limited
Shares in Woodside Petroleum Limited (ASX: WPL) have also made a disappointing start to the year, with them falling by 9% year-to-date. As such, Woodside now trades on an even more appealing valuation, with it having a price to earnings (P/E) ratio of just 10.4, which at a time when the ASX has a P/E ratio of 16.3, indicates that Woodside offers excellent value for money.
And, while Woodside's financials are declining at the present time as a result of the challenging period currently being endured in the commodities markets, it has a superb track record of growth. For example, Woodside has increased earnings per share at an annualised rate of 12.9% during the last five years and, while the short run may present further difficulties, this past performance bodes well for the company's longer-term prospects.
Australia and New Zealand Banking Group
Although the current financial year is not expected to see Australia and New Zealand Banking Group (ASX: ANZ) post strong growth numbers, with its bottom line forecast to rise by just 1.9%, next year is set to be a whole lot different. That's because ANZ is expected to deliver earnings growth of 6.4% in financial year 2016 and this could cause investor sentiment in the bank to improve moving forward.
This could lead to an upgrade in the bank's valuation, with it currently trading at a discount to the wider index. For example, while the ASX has a P/E ratio of 16.3, ANZ's P/E ratio is just 13.4, and with its bottom line expected to rise at a broadly similar rate to that of the wider index in financial year 2016, such a large discount may become difficult to justify.
Of course, finding the best stocks for the long term is a tough ask – especially when work and other commitments limit the amount of time you can spend trawling through the index for them.
