Your instant 2-stock blue-chip portfolio

Build long-term wealth with these two companies.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Finding quality companies that are undervalued is a great way to build long-term wealth. The sharemarket rarely gives us such an opportunity, however recently two blue-chip companies have gone on sale: Coca Cola Amatil Limited (ASX:CCL) and QBE Insurance Limited (ASX:QBE).

1. Coca Cola Amatil Limited

Coca Cola Amatil's share price has been beaten down hard following the announcement of its FY13 full-year results, which saw earnings fall by 6.9%. The poor result was on the back of aggressive competitor pricing and retailer de-stocking. Consequently, the share price is down by 9% this year.

I believe the current headwinds faced by the company are temporary and once the competitive landscape eases, the company should return to growth. The large Indonesian market also presents a huge growth area for the company. The recent fall in the share price creates what I see as a great long-term buying opportunity. The company also trades on an attractive yield of 5%.

2. QBE Insurance Limited

QBE Insurance has been through a difficult period in recent times; consequently the share price is down by 35% over the past five years. However, I believe the company now looks attractive for investors with many analysts forecasting earnings to bounce back strongly over the coming years as underwriting revenue and margins improve.

QBE will benefit from recent its restructuring initiatives, a recovering U.S. economy and U.S. dollar and higher long-term interest rates. The U.S. business is forecast to return to profitability in FY14. At the current share price of $12.70, I think the company is undervalued.

Foolish takeaway

Both Coca Cola Amatil and QBE Insurance offer investors steady long-term share price growth and growing dividends. Luckily for investors, the market has provided investors with an opportunity to purchase both companies at a very attractive price.

Motley Fool contributor Bradley Murphy owns shares in Coca Cola Amatil and QBE Insurance.  

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »