Every portfolio needs to have some blue-chip stocks such as Woolworths Limited (ASX: WOW) and BHP Billiton (ASX: BHP) in order to mitigate risk and maximise your chances of beating the S&P/ASX 200 Index (ASX: XJO) (^AJO). But picking and choosing which suit your risk tolerance and financial goals can be difficult.
For investors in retirement there's generally a few characteristics you look for from your investments. Strong brands, big and reliable dividends and modest growth are just some of the things you'll likely desire. Making these types of investments has proven to be the best strategy for increasing your chances of retiring wealthy.
Here are five blue-chip companies you should look to add to your long-term portfolio today.
1. Telstra Corporation Ltd (ASX: TLS) has an outstanding 5.3% fully franked dividend and exciting growth prospects in Asia. With a huge pile of cash and no sign of losing its commanding lead in the domestic mobile, internet and pay-TV markets, Telstra is a standout long-term buy.
2. Coca-Cola Amatil Ltd (ASX: CCL) is another great buy for investors demanding a good quality dividend and modest long-term growth. Thanks to a recent restructuring and drop in share price, CCA is forecast to pay a 4.6% dividend in the coming year.
3. Insurance Australia Group Limited (ASX: IAG) is one of the Australia's best insurers and pays a dividend which matches its reputation. Its shares trade cheap (currently on a price to earnings of 11), which reflects the inherent risk of its business. Despite this it still boasts a 6.1% fully franked dividend which is enviable in the current market.
4. Westfield Retail Trust (ASX: WRT) is, along with Westfield Group (ASX: WDC) and other third parties, the owner of a portfolio of shopping centres throughout Australia and New Zealand. Currently trading on a price-book ratio of 0.93, Westfield will supply consistent dividends to shareholders for many years into the future. Currently it is forecast to pay a 6.1% unfranked dividend.
5. Transurban Group (ASX: TCL) is the owner of a huge portfolio of Australian toll roads, with additional interests in the USA. Although it appears to be trading on demanding earnings multiples, Transurban's business has some of strongest barriers to entry for new competitors and it continues to reward faithful shareholders with a generous 4.4% dividend.
One dividend stock which is even better
