3 Reasons Australia Is A Great Place To Invest Right Now

Four of its largest five holdings, however, are banks, so its exposure to the growth-oriented resources sector is only limited. You get Aussie exposure without getting too involved in the volatile commodities markets directly.

There’s also a stock that offers the safety of broad exposure to the Australian economy, as well as some direct investment in the dynamic commodities and energy sectors, with an emphasis on retailing, coal mining, fertilizer, and insurance — Wesfarmers Limited (OTC: WFAFY).

It’s selling at 19 times trailing earnings and about 17 times forward earnings, with a yield of 3.5%. When growth returns, you’ll be sitting on a solid (and likely growing) dividend, as well as healthy capital gains from all sectors. A nice total return pick.

Australia’s largest company, and the world’s largest mining company, is BHP Billiton Limited (NYSE: BBL). BBL is well diversified both geographically and product-wise, with interests in energy, iron ore, copper, silver, lead zinc, molybdenum, and gold. BHP is currently trading at only 12.5 times forecast 2014 earnings, with a 3.7% dividend yield, although in terms of net asset value, it is fully priced at 2.4 times.

Still, it’s probably the easiest and most direct way to play Asian growth. But you need to bear in mind that it’s a direct play in commodities and is going to be volatile. This is not for the faint of heart. For example, BHP recently reported earnings and, due to the “China Syndrome,” had a 30% drop in revenues and a loss of $5 billion year over year.

But a $2.7 billion move into the potash sector (key to the agriculture sector) promises to be a smart investment in coming quarters.

Another direct play is Australia’s largest oil company, Woodside Petroleum (OTC: WOPEY).At this point, China is the most energy-hungry nation on the planet, and all countries in its economic sphere of influence are in the same energy-starved situation.

Woodside has a thirsty Gargantua on its doorstep and will benefit accordingly once growth kicks in again. It’s trading at only 9.6 times trailing earnings, with earnings expected to increase modestly in 2013. Assuming it doesn’t repeat the special dividend it paid in May, WOPEY will give you a dividend yield of about 3.2%. That’s a nice piece of cash to wait for things to turn around in Asia.

Money MorningWritten By Martin Hutchinson From Money Morning

We’re in the midst of the greatest investing boom in almost 60 years. And rest assured – this boom is not about to end anytime soon. You see, the flattening of the world continues to spawn new markets worth trillions of dollars; new customers that measurein the billions; an insatiable global demand for basic resources that’s growing exponentially; and a technological revolution even in the most distant markets on the planet.And MoneyMorning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come.

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