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ResMed Inc, Cochlear Limited, Coca-Cola Amatil Ltd: 3 bargain blue chips

Blue-chip stocks are a vital element of any portfolio. They provide a steady income stream with their dividend distributions, they have renowned brand recognition and their ‘defensive’ natures act as security for your portfolio against market volatility.

When investors think of blue chips, companies like the big four banks, Wesfarmers Ltd (ASX: WES), Woolworths Limited (ASX: WOW) or biopharmaceuticals giant CSL Limited (ASX: CSL) are usually the ones that immediately come to mind. However, should they necessarily be a part of every portfolio?

There is no question as to whether they are quality businesses, that’s a given, but should you buy them at just any price? Foolish (note the capital ‘F’) investors know that, when buying stocks, you must not only focus on the strengths and future potential of the business, but also on the price you are paying for them. Following on from last year’s stellar runs, I do not think any of the above are trading at bargain prices.

The good news for investors is that there are others still trading at very attractive prices. Here are three companies that, although they may not be immediately thought of when talking about ‘blue chips’, still fit the definition and offer excellent long-term growth opportunities:

ResMed Inc. (ASX: RMD): ResMed develops and manufactures products that assist with the treatment of breathing disorders such as sleep apnoea. Although its recent first-half earnings report was slightly below analysts’ forecasts, the company is still growing at a consistent rate and should provide shareholders with sustained growth in the long-term. It is also set to benefit from Medicare changes in the Americas, while a falling Australian dollar will also boost revenues. In addition, the company offers a trailing 1.9% dividend yield.

Cochlear Limited (ASX: COH): The market was left disappointed by Cochlear’s earnings release on Tuesday, sending shares plummeting to a 52-week low of $51.79. While factors such as a pending legal suit and an increasing number of competitors could make shares volatile in the short-term, its products are the highest quality in the market, making it a good long-term bet where patience is key. After having announced a 1.6% increase of its interim dividend to 127c per share, the company also yields an attractive 4.6%.

Coca-Cola Amatil Ltd (ASX: CCL): The beverage manufacturer and distributor heavily underperformed against the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in 2013 due to a pricing war with Schweppes that had a negative impact on profits. However, there are signs that the war could be over, which will put less pressure on product margins, signalling that better times are just around the corner. While shares are trading 23% below their 52-week high, investors should consider adding a position to their portfolio today.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.