Australia's most prominent blue chip stocks have rallied hard in recent years on the back of global economic uncertainty and the low interest rate environment. But with many now trading at or near record highs, it's becoming harder to find ones that are still worth investing in.
The good news is that not every blue chip has been pounced upon, and there are a few that are worthy of new investment dollars.
Westfield Corp Ltd (ASX: WFD) is one such company. While months of speculation surrounding Westfield Group's controversial restructure saw most investors keep their distance, the stock is now looking as appealing as ever. Given that Westfield Corp now owns and manages all of Westfield's international assets, it is an excellent way for investors to not only gain exposure to a strong set of assets but also to the recovering US and UK economies. While its earnings are reported in US dollars, investors will also benefit from the tumbling Aussie dollar.
Another company worth considering is ResMed Inc. (CHESS) (ASX: RMD), which develops and manufactures products for the treatment of various breathing disorders. ResMed boasts an incredible track record for revenue and earnings growth and with the rate of sleep apnea expected to continue climbing, so should shareholder returns. Although its shares have risen strongly in the last six months, the stock is actually sitting in negative territory compared to this time last year, indicating now could be a great time to climb on board.
Finally, Insurance Australia Group Ltd (ASX: IAG) is another solid bet for new money today. Somehow, many investors seem to have overlooked this stock's stunning dividend (it currently offers a grossed up 9.2% yield) as well as its potential to grow earnings in the future. Trading on a P/E of just 10.8, its revenues should receive a very nice boost from its recent acquisition of Wesfarmers Ltd's (ASX: WES) insurance underwriting business.
