Sure, they might not be the most exciting stocks to own, but blue-chips play a vital role in every portfolio. Not only are they far more resilient to market downturns than growth or speculative stocks, but they usually also offer superior and more reliable dividends to help compound your wealth over the long term.
If I had $10,000 to invest today and was limited to buying only blue-chip stocks, these are the companies I would be targeting…
1. Coca-Cola Amatil Ltd (ASX: CCL) certainly hasn't enjoyed the same level of success in the last 12 months as it has done in prior years. Declining profits and heightened pressure from key rival Schweppes has seen its shares plummet in value. While that's hardly ideal for long-term shareholders, it's great news for prospective investors wanting a quality business at a fantastic price. I've already bought shares and would love to buy even more.
2. Telstra Corporation Ltd (ASX: TLS) is Australia's largest and most dominant telecommunications provider. While its growth is unlikely to be explosive in the coming years (it already boasts a market capitalisation of $67.3 billion), its earnings are likely to continue expanding over the long-term – particularly as society becomes increasingly reliant on broadband services. In addition, it offers a juicy 5.4% fully franked dividend yield.
3. BHP Billiton Limited (ASX: BHP) has underperformed the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) in the last five years or so, but that looks destined to change. The company has maintained a heavy focus on reducing costs and improving productivity. As it expands production, its margins will continue to improve which could see shares grow nicely in the long term.
4. Westfield Corp (ASX: WFD) also deserves an outside mention in this list thanks to its heavy exposure to the recovering US and UK economies. Despite having risen strongly since debuting on the market last month, the shopping-centre giant should see sales and rent increase over the coming years as business and consumer confidence improve. The company will also benefit from the falling Aussie dollar, which is expected to drop "significantly" in the near future.
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Each of the companies mentioned above present as strong candidates for investors looking to solidify their portfolio's performance and returns for the long term.
