Investing for Income – time to let go of your term deposits.
Below are my top 10 share picks in the market right now, some of you may hold some of these shares already. If so continue to hold them as they will produce you a great return, but take a look at the ones not currently in your portfolio and consider if they suit your investment style.
I have also included a PDF of a $100,000 portfolio made of my top 10 picks, in summary the portfolio is spread across the below sector (see pie chart) and will provide growth of 11.6% and income or 8.4% in the coming 12 months. That is a total return of 20% for the year. If you have funds currently sitting in interest bearing deposits you may consider achieving a far superior return through this portfolio. All stock are large blue chips stocks.
10 Ten Stock picks
APA Group (APA) - owns, or has an interest in, over 10,000km of gas transmission pipelines in Australia. APA has a significant presence in all mainland states & territories. Being an infrastructure stocks it is undervalued at present, as such, we should see 6% growth in the stock and a 9.77% gross yield.
Goodman Fielder Limited (GFF) - is Australia's leading listed food company, with a range of grocery products including bread, milk, margarine, dressings, mayonnaise and flour. This is a recession proof stock, currently paying an 8.57% yield and a price target 15% above the current price.
General Property Trust (GPT) - is one of Australia's largest AREITs with total assets of $13.87bn at June 2008, being a stapled security comprising a unit in the trust and a share in the management company. GPT has three inter-linked businesses, each based on investment property, being ownership, development and management with assets in Australia, New Zealand, Europe and the USA. Company has under gone a major restructure over the past 12 months and although we do not expect much growth in the coming years the 6.5% yield will make up for it. It is also a key takeover target with Stockland holding a large holding. Expected take over price is 0.71c. The stock is currently trading at 0.55c.
Healthscope Limited (HSP) - is a provider of hospital and related health services to public and private sectors. This sectors is also recession proof, they have had high occupancy rates in their hospital and a strong cash flow. On a yield of 6.84% and expected growth of 6.9% this is my key pick in the health care sector.
National Australia Bank (NAB) - is a large financial services group providing a comprehensive and integrated range of financial products and services throughout Australia, New Zealand and parts of the United Kingdom. We all know this stock with a yield of 9.21% and growth of 21% buying now makes long term sense.
QBE Insurance Group (QBE) - is a leading provider of general insurance and reinsurance services in Australia, the Pacific, Asia, the Americas and Europe. The Australian General Insurance operation provides insurance cover for both the private and commercial sectors. Again the largest in the sector, currently buying IAG to get a better foot hold in Australia, paying a 6.36% yield and potential growth of 5% it is a must have.
Tabcorp Holdings Limited (TAH) - offers a wide range of gambling and entertainment products. The stock has re-grouped after losing the betting business in Victoria, now expanding the casino business, paying a whooping 11.33% yield and expected growth of 16% it is a must have.
Telstra Corporation Limited (TLS) - is a provider of telecommunications and information products and services. The principal activities are provision of telephone lines; national local and long distance, and international telephone calls, mobile telecommunications, data, Internet and on-line, wholesale, telephone directories and pay TV. Looks like all of the bad news is out on this stock and we should start to hear some positive news regards the same of clients to the government, in the meantime for the next couple of years you will benefit from a 12.28% yield. That is correct 12.28%; we also expect growth of 16%. Love or hate them Telstra is a stock to have and hold.
United Group Limited (UGL) - is a broad based infrastructure services company engaged in industrial maintenance, manufacturing, engineering and business process outsourcing services for blue chip companies and governments throughout Australia, New Zealand and parts of Asia. This is the stable player in a tough industry, strong cash flow and strong income UGL is paying 6.98% yield and has a price target 22% above the current price.
Woolworths Limited (WOW) - is an Australian retailer whose primary activity is supermarket operations. Other operations include petrol sale through Caltex Woolworths co-branded service stations and Woolworths plus Petrol, liquor, Big W general merchandise stores, and consumer electronics through Dick Smith, PowerHouse and Tandy. Hard to spend money with out Woolworths getting some, this stock is paying 6.03% and has a price target 10% above current levels. Another core portfolio stock that looks cheap.
Make sure you download and read the $100,000 portfolio made up of these stocks so you can witness the benefits of holding them in your portfolio.
If you are interested in any of these stocks now is the time to buy.
For more information please call us on 07 4771 4577.