It was a spectacular year for the Australian share market in 2013 with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rising over 15% – the greatest annual performance since 2009 – fuelled by an improving global outlook, record-low domestic interest rates and easy global monetary policy.
Each of the big four banks – namely Commonwealth Bank (ASX: CBA), Westpac (ASX: WBC), NAB (ASX: NAB) and ANZ (ASX: ANZ) – largely contributed towards lifting the index, as did other blue chips including Wesfarmers (ASX: WES), Woolworths (ASX: WOW) and CSL (ASX: CSL).
However, we do not invest for the past but rather the future. Just because these companies performed well last year does not mean they are the companies that you should hold onto for 2014.
Here are three blue chips that I believe will do well throughout the next 12 months:
Telstra (ASX: TLS): Shares in Telstra have performed exceedingly well since the beginning of 2011, having climbed from around $2.60 per share to today's price of $5.26. Despite this strong performance however, Telstra should continue to outperform throughout 2014 and beyond. The telecommunications giant continues to tighten its grasp over the industry and offers a very attractive 5.4% fully franked dividend yield.
Coca-Cola Amatil (ASX: CCL): The manufacturer and distributor of some of the world's most popular beverages had a year to forget in 2013, with shares losing nearly 10% of their value. This was largely the result of a pricing war with key rival Schweppes as well as grocery giants Coles and Woolworths. However, the company has recently re-entered the beer market after a two-year hiatus and has enormous growth potential in Indonesia. Coca-Cola Amatil will likely bounce back strongly, and offers a 4.7% dividend yield in the meantime.
BHP Billiton (ASX: BHP): Perhaps the most controversial of my picks, BHP could be a winner in 2014. Compared to its rivals Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG), it is a much more diversified miner, making it less susceptible to a sudden fall in the value of iron ore. Under the leadership of Andrew Mackenzie, the company will continue to focus on cutting costs and increasing productivity across all divisions, whilst also increasing its output of iron ore. It currently offers a dividend yield of 3.1%, although their distributions are likely to increase over 2014.
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