The share prices of Telstra Corporation Ltd (ASX: TLS), National Australia Bank Ltd. (ASX: NAB) and Woolworths Limited (ASX: WOW) underperformed the market in 2015.

Source: Google Finance

Source: Google Finance

So can we expect more of the same in 2016?

Looking into the year ahead, undoubtedly, each of these three blue-chip dividend shares will have their work cut out if they are to rebound from their recent falls.

NAB

2015 was a very busy year for NAB, as its management team made inroads to ridding the bank of its underperforming international assets. In 2016, the bank’s divestment of the Clydesdale and Yorkshire Banking Group (its UK subsidiaries) will be a key milestone. The market will likely punish NAB’s share price if the transition doesn’t proceed as expected, early in the year.

Woolworths

Dealing with the fallout in investor sentiment following three profit downgrades was never going to be easy for Woolworths. Unfortunately, with managerial uncertainty and the prospect of turning around three underperforming businesses (Woolworths supermarkets, Big W and Masters) still hanging over the company, 2016 may be another volatile year for shareholders.

Telstra

Despite being one of the best dividend-paying shares on the ASX, Australia’s largest telecommunications company had its share price sold off in 2015. In the year ahead, under the guidance of CEO Andy Penn, Telstra will continue to grow its business in Asia and investors will hope for continued subscriber growth in the company’s dominant mobiles business.

Buy, Hold or Sell?

Of these three blue chip shares, I’d buy Telstra first. It has an enviable competitive advantage in many lucrative telecommunications markets, pays a juicy fully franked dividend and is growing modestly. In contrast, I think NAB is facing increasing competition and is priced to perfection, so it is – at best – a hold. Finally, the jury is out on Woolworths leading into 2016 so it too is a hold, in my opinion.

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Motley Fool writer/analyst Owen Raszkiewicz has a financial interest in Woolworths. 

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.