Rio Tinto Limited
Investors in Rio Tinto Limited (ASX: RIO) are no doubt relieved to hear the company's CEO, Sam Walsh, state recently that a merger with Glencore is unlikely to happen. That's because, while a takeover could boost Rio Tinto's share price in the short run, its long term prospects are bright and could mean even bigger gains for holders of shares in the company.
For example, Rio Tinto has a price to earnings (P/E) ratio of just 12.7 which, while the ASX has a P/E ratio of 16.3, indicates that there is significant scope for an upward rerating to take place. And, with Rio Tinto becoming more efficient in response to the challenging trading conditions it faces, its earnings growth could surprise on the upside over the long term. As such, it could beat the ASX in 2015 and beyond.
Domino's Pizza Enterprises Ltd.
Even though Domino's Pizza Enterprises Ltd. (ASX: DMP) has an excellent track record regarding earnings growth, the company still has big ambitions when it comes to increasing its market share in the Aussie fast food market. For example, over the last five years Domino's has delivered earnings growth of 20.1%, which is incredible and shows that it remains a strong growth stock.
Looking ahead, Domino's is set to offer cheaper menus, faster ordering and a range of new products as it seeks to build on its current 8% stake in the Aussie fast food marketplace. So, even though its shares have risen by a whopping 66% in the last year, there could be more growth to come and Domino's looks set to continue to beat the ASX moving forward.
Cochlear Limited
Although Cochlear Limited (ASX: COH) yields just 2.5% (partially franked) at the present time, it could prove to be a much better income stock than it may at first appear. That's because it is forecast to increase dividends per share by 8.4% next year and the health care equipment company has an excellent track record of increasing shareholder payouts at a rapid rate.
For example, Cochlear has increased dividends per share at an annualised rate of 13.7% during the last 10 years, which is a staggering rate of growth and shows that it is committed to rewarding its investors. And, with a payout ratio of 70%, there seems to be considerable scope for dividend increases, while also ensuring that there is ample reinvestment in the company's product development. As a result, it could be an ASX-beating stock in the long run.
