Finding great companies trading at reasonable prices can be a challenge at the best of times, let alone when the stock market is trading at a multi-year high. So when the market itself takes a dive, like it has so far this month, it is a good opportunity for investors to make their move.
With the S&P/ASX 200 Index (INDEXASX: XJO) (ASX: XJO) down nearly 4% in the last seven trading days, I've taken it upon myself to highlight three companies I've had my eye on. Each one boasts growth potential, a sustainable competitive advantage as well as a generous dividend for the income-hungry investor…
1) SKYCITY Entertainment Group Limited-Ord (ASX: SKC) is a gaming and entertainment business which operates three casinos in New Zealand and one each in Darwin and Adelaide. Due to strict licensing rules, it is relatively protected from competition while refurbishments to two of its primary venues should help improve margins in the medium-to-long terms. According to Morningstar forecasts, the company will pay a dividend of 20 cents per share (cps) in 2015, putting it on a dividend yield of 6%.
2) Coca-Cola Amatil Ltd (ASX: CCL) could well be your best option right now. Its shares have dropped heavily over the last 18 months based on a number of short-term issues which have gotten investors offside. While the near-term outlook remains cloudy, the long-term is looking as bright as ever. Coca-Cola Amatil's brands are amongst the strongest in the world while it is expected to pay a 46.5 cps dividend in 2015, giving it a yield of 4.9% franked to 75%.
3) Westfield Corp (ASX: WFD), which was recently created as part of the Westfield Group restructure, owns and manages all of Westfield's US and UK assets. There is also the possibility of further expansion through Europe and Brazil. As it continues to strengthen its balance sheet, it is well positioned to benefit from the recovering US and European economies while it is also expected to deliver a generous yield of roughly 3.5%.
