It's official; returns from the S&P/ASX 200 (index: ^AXJO) (ASX: XJO) are slowing.
A report by CommSec shows that total earnings growth during the most recent reporting season slowed dramatically. The report notes that: "In aggregate, revenue grew by 0.2 per cent to $298.2 billion, while expenses grew by 3.3 per cent to $241.4 billion, leading to a 26.2 per cent fall in net profit".
Given the huge pressure on commodity and resource companies at the moment which make up a strong weighing of the top 200 companies it's not overly surprising. But it is an important guide for investors trying to maximise returns to look outside the traditional dominant blue-chips many of which are undergoing a significant slow-down.
But fear not, because there are still plenty of smaller companies with strong earnings growth further down on the ASX-200 list. Here are three of my favourite companies to buy today, all of which smashed the anaemic 0.2% revenue growth reported by CommSec:
1. FlexiGroup Limited (ASX: FXL)
FlexiGroup's half year 2015 result saw the company grow revenues by 9.3%, earnings per share by 8% and reaffirm guidance of full year cash Net Profit After Tax (NPAT) up to $91 million – a 7.5% increase on full year 2014.
The smart addition of NZ telecommunications leasing business TRL NZ continues the long-term path to growth and will add around $3 million to FY16 NPAT.
2. G8 Education Ltd (ASX: GEM)
Education provider G8 Education announced a huge increase in full year 2014 (FY14) revenue up 79%, with basic earnings per share climbing 43% after a year of acquisitions. Yet despite all this shares in the company have dropped 34% in the last six months to offer an attractive dividend yield of 5.3%.
3. Cover-More Group Ltd (ASX: CVO)
Cover-More Group's most recent announcement was for the first half of 2015, which yielded a jump in gross travel insurance sales of 11% and earnings per share increase of 21%.
Although Cover-More anticipates a slowdown in Australian travels going forward, due to a slowing economy and falling Aussie dollar, the company is focusing on the high growth Chinese travel market long term.
