Reasons to Invest in Blue-Chip StocksBlue-chip stocks are an excellent investment, even in a down market. It's tough to time the markets and come out ahead, but blue-chip stocks generally have an excellent long-term outlook and characteristics that make them likely to outlast any market downturn.
Your total funds are then invested in shares in the top 20 blue chip Australian companies such as BHP, Westpac, the Commonwealth Bank, Telstra, Woolworths, etc (subject to maintaining the minimum 2% cash balance).
How to buy blue chip shares in Australia
- Choose a share trading platform. If you're a beginner, our table below can help you choose.
- Open your account. You'll need your ID, bank details and tax file number (TFN).
- Confirm your payment details.
- Find the shares you want to buy.
Several parameters can be considered to identify blue chip companies. They include consistent annual revenue over a long period, stable debt-to-equity ratio, average return on equity (RoE) and interest coverage ratio besides market capitalisation and price-to-earnings ratio (PE).
Tesla will be added to the S&P 500, officially becoming a blue-chip stock. Tesla is officially a blue-chip stock. The electric vehicle company will join the S&P 500, the premiere U.S. stock market index, the company overseeing the benchmark announced Monday.
A "blue chip" is the stock of a well-established, financially sound, and historically secure corporation. Examples of blue chip stocks include Coca-Cola, Disney, Intel, and IBM. Because the return on blue chip stocks is close to a sure thing, the stocks tend to be expensive and to have a low dividend yield.
The most common way to invest in blue chip stocks is to add them to an investment portfolio, usually through the help of a broker. Since there are dozens of blue chip stocks from which to choose, investors should evaluate the company's performance against the goals of their investment strategy.
The S&P/ASX 200 Index (ASX: XJO) has fallen 11.2% lower this year to 5,941.60 points. That might be enough to keep some beginners from buying into the market with fears of further declines. Here are a few reasons why I think right now is a great time to buy more ASX shares.
20 Best Blue-Chip Stocks for 2020 and Beyond
- Facebook (NASDAQ:FB)
- Coca-Cola (NYSE:KO)
- Apple (NASDAQ:AAPL)
- Nike (NYSE:NKE)
- Adobe (NASDAQ:ADBE)
- Microsoft (NASDAQ:MSFT)
- McDonald's (NYSE:MCD)
- Intel (NASDAQ:INTC)
I reckon it's a brilliant time to start
buying shares right now, while the stock market crash is throwing up so many cheap ones. But to reap the biggest benefits, you need to have a long-term strategy.
Top dividend shares.
| Company | Forecast yield |
|---|
| Legal & General | 9.5% |
| Polymetal International | 8.5% |
| Aviva | 8.4% |
| BP | 8.4% |
A blue-chip stock is a huge company with an excellent reputation. A blue-chip stock typically has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector, and is more often than not a household name.
Part of the reason blue chips are relatively safe is that dividend-paying stocks tend to fall less in bear markets due to something known as yield support.
Historically, the Australia S&P/ASX 200 Stock Market Index reached an all time high of 7199.79 in February of 2020.
Coles Group Ltd (ASX: COL)The first blue chip to consider buying is Coles.
Top Companies by Stock PriceThe most expensive publicly traded stock of all time is Warren Buffett's Berkshire Hathaway (BRK. A), which was trading at $320,250 per share, as of October 2020.
Investing in shares means buying and keeping them for a while in order to make money. If the company grows and becomes more valuable, the share is worth more – so your investment is worth more too. Some shares pay you part of the company's profits each year, called a dividend.
Qantas Airways Limited (ASX: QAN)Qantas is an ASX 50 blue-chip share that could have a place in a diversified portfolio next year.
Largest firms
| Rank | Name | Employees |
|---|
| 198 | Wesfarmers | 220,000 |
| 218 | Woolworths | 216,000 |
| 333 | Commonwealth Bank | 45,129 |
| 350 | BHP | 26,827 |
In Australia, it's not just what you do for a living that matters, but who you work for, according to LinkedIn's latest list of the country's top employers.
- Westpac Group. Industry: Financial services.
- National Australia Bank. Industry: Banking.
- ANZ.
- Commonwealth Bank.
- Lendlease.
- PwC Australia.
- CIMIC.
- Deloitte Australia.
1. Linfox Australia Pty Ltd. Photo: Linfox Leadership Profile. Formed in 1956 by Lindsay Fox, Linfox Australia is a logistics and supply chain company with an estimated market share of 4.5% in the road freight transport industry.
Australia is world famous for its natural wonders and wide open spaces, its beaches, deserts, "the bush", and "the Outback". Australia is one of the world's most highly urbanised countries; it is well known for the attractions of its large cities such as Sydney, Melbourne, Brisbane, and Perth.
Australia's 10 Most Successful Companies In 2018
- Wesfarmers. Total Revenue ($m): 68, 732.
- Woolworths. Total Revenue ($m): 55,921.
- Commonwealth Bank of Australia. Total Revenue ($m): 44,949.
- BHP Billiton. Total Revenue ($m): 39, 164.
- Westpac Banking Corporation. Total Revenue ($m): 37,518.
- RioTinto. Total Revenue ($m): 35,132.
- ANZ Banking Group.
- National Australia Bank (NAB)
Top 10 growth stocks on the ASX right now
| Top 10 growth stocks on the ASX in 2020 |
|---|
| Ticker | Market cap | 12-month price target (avg) |
|---|
| Xero (XRO) | $11.47 billion | $73.77 |
| A2 Milk (A2M) | $10.55 billion | $14.31 |
| Wisetech (WTC) | $8.64 billion | $28.17 |
The economy of Australia is a highly developed mixed economy. Its GDP was estimated at A$1.89 trillion as of 2019.
Food processing
| Sector | Turnover(2005–06, $millions) |
|---|
| Meat and meat products | 17,836 |
| Beverage and malt manufacturing | 13,289 |
| Dairy products | 9,991 |
| Sugar and confectionery manufacturing | 6,456 |
List of 25 high-dividend stocks
| Symbol | Company Name | Dividend Yield |
|---|
| BOH | Bank of Hawaii Corp. | 3.72% |
| PNW | Pinnacle West Capital Corp. | 3.71% |
| MTB | M&T Bank Corp. | 3.70% |
| BKH | Black Hills Corp. | 3.58% |
A blue-chip stock is a stock from the market's highest-quality companies, known for their low risk and reliable performance. Blue-chip stocks are stable and pay high dividends, but they are typically expensive and don't grow much.
