Over the last 12 months, investors searching for high-yielding stocks have pushed the S&P/ASX 200 (^AXJO) (ASX: XJO) up in value significantly. Although it has primarily been Australia?s largest companies that have soared as a result of this trend, there are still a number of blue chips trading at discounted prices that investors could consider adding to their portfolio.
QBE Insurance (ASX: QBE) is one of the top 20 insurance and reinsurance groups across the globe. Over the last few years, shareholders have had to remain patient with…
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Over the last 12 months, investors searching for high-yielding stocks have pushed the S&P/ASX 200 (^AXJO) (ASX: XJO) up in value significantly. Although it has primarily been Australia’s largest companies that have soared as a result of this trend, there are still a number of blue chips trading at discounted prices that investors could consider adding to their portfolio.
QBE Insurance (ASX: QBE) is one of the top 20 insurance and reinsurance groups across the globe. Over the last few years, shareholders have had to remain patient with the company, as vast numbers of devastating natural disasters around the world heavily deflated QBE’s price tag.
Fortunately for those investors, the company has been able to increase their premiums as a result of those disasters, which should boost revenues over the next few years. With roughly 25% of its business in North America, the falling Australian dollar should also prove to be very beneficial to the company’s earnings. Whilst its current price of $16.57 is 65% above its 52-week low, its long-term prospects are very appealing.
Based on its size, shopping centre operator Westfield Group (ASX: WDC) is considered a blue chip, although it also offers plenty of growth potential. Since the global financial crisis, the company has been focused on divesting non-core assets and redeveloping its most profitable properties in order to prepare for the inevitable growth of online retailing.
Currently, the company only maintains an interest in properties in Australia, New Zealand, the US and UK, but it has announced its intention for further global expansion, including reentering the Brazilian market given the right opportunity. Like QBE, the company has increased in value over the last 12 months but has fallen away as the market has corrected itself. Given its growth potential, a current price of $11.80 seems very reasonable.
Coca-Cola Amatil (ASX: CCL) is another company well worth your consideration. Although it is not a member of the ASX 20, its brands are amongst the most well-known around the globe. The company has struggled in recent times due to the high Australian dollar, as well as pricing pressures applied by supermarket duo Wesfarmers (ASX: WES) and Woolworths (ASX: WOW).
It will reenter the beer market later this year, and a strong management team and a falling dollar should see it recover strongly. Its recent price of $12.57 is only 7% above its 52-week low, following a poor earnings outlook for the period. Investors can take advantage of the short-term dip and expect that it will climb steadily for the long term once more.
Blue-chip companies are an excellent foundation for a successful portfolio, however, it is still necessary to buy them at a reasonable price. The companies mentioned above have all established themselves as powerhouses in their respective sectors, and should give investors reasonable returns in the long run and make for a strong core for your portfolio.
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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.