Fortunately the large share market falls we saw over the final quarter of 2018 have a silver lining in that the share prices of plenty of quality companies are now a fair bit cheaper for smart investors to buy.
Moreover, investing returns are always a function of price paid, which means that if you correctly identify successful companies on cheaper valuations then you're likely to achieve even better long-term returns.
Let's take a look at five companies that may now offer investors strong returns from within the ASX.
Dicker Data Ltd (ASX: DDR) is a business I've regularly recommended to dividend seekers over the years and at $3.08 it's approaching a record high today. I expect the IT hardware distributor will offer around a 6.4% yield plus franking credits in the year ahead plus some mid-single digit profit growth. In other words it could offer a double-digit total return to ASX investors in a world of limited opportunities.
TPG Telecom Ltd (ASX: TPM) admittedly is a bit of a roughie due to its problems getting its merger with Vodafone Australia approved by the competition regulator the ACCC. Also, a founder-led business I expect it will be a strong performer, but only if its merger deal is approved. This looks a 50/50 bet at best for now, so investors may want to wait and see on this one.
Accent Group Ltd (ASX: AX1) is the footwear retailer forecasting 15% EBITDA growth for the six-month period to December 31 2018 despite some tough retail conditions. The stock looks reasonable value at $1.29 and I expect will offer a yield of at least 5.4% plus franking credits in the next 12 months. It also has a strong long-term track record backed up by a strong management team.
SkyCity Entertainment Group (ASX: SKC) is forecasting profit growth in FY 2019, boasts a big dividends and is a monopoly-like business trading on a decent valuation. Its core asset is Auckland's SkyCity Casino and Entertainment complex that has no competition and is unlikely to face real competition in the future.
DuluxGroup Limited (ASX: DLX) is the paints retailer that has seen its share price fall 12% over the last 6 months, but it has an excellent track record of profit and dividend growth. It also has a strong competitive position and potential to deliver further steady profit growth over the long term.
