I think the continued underperformance of companies like Woolworths Limited (ASX: WOW) and Telstra Corporation Ltd (ASX: TLS) in the last few years has given blue-chip shares a bit of a bad name with investors.
But not all blue-chips have struggled. In fact, two blue-chip shares in particular have gone from strength to strength in the last few years and look set to continue the trend moving forward in my opinion.
Because of this, if I had $10,000 spare I would invest it evenly in the following two blue-chip shares:
CSL Limited (ASX: CSL)
I was very impressed with the biotechnology company's recent half-year results. For the six months ended December 31 2016, CSL reported a 12% increase in net profit after tax to $806 million. On a constant currency basis net profit grew 36% on the prior corresponding period. A key driver of the strong result was the growth of its immunoglobulin product Privigen. Sales of the liquid intravenous immunoglobulin increased 34% during the half. Whilst at 33x trailing earnings its shares are by no means cheap, I believe its high quality management team and strong long-term growth prospects make it worth paying a premium for.
TPG Telecom Ltd (ASX: TPM)
The last 6 months haven't been kind to shareholders of this telco giant. Concerns over narrower than expected NBN margins and the impact this would have on its profitability has led its shares to tumble almost 50%. This has left its shares trading at just 14x estimated FY 2017, which I think puts them in bargain territory. Although NBN margins may not be as lucrative as many had hoped, I'm optimistic that the rollout of its own fibre network in certain areas could prove to be very profitable for the company. As well as this the company has growth opportunities in the mobile market both at home and also in Singapore.
