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Are Telstra Corporation Ltd, Westpac Banking Corp and Woolworths Limited the best ASX stocks for a blue-chip retirement?

If you’ve held Telstra Corporation Ltd (ASX: TLS), Westpac Banking Corp (ASX: WBC) and Woolworths Limited (ASX: WOW) for a long time, take a moment to pat yourself on the back.

I say this because if you’re still holding them today, you’d know each company has handsomely rewarded faithful shareholders many times over, with increasing dividends and, for Woolies and Westpac holders, significant capital gains.

Admittedly, those who bought shares in the second round of Telstra’s privatisation, back in 1997, would be sitting on a return of less than 20%.

However, each of the three blue-chips are once again kicking goals for shareholders, with share prices sitting near multi-year highs.

Whilst I’m certainly not a buyer of their stock at today’s prices, there are fewer stocks I’d feel more comfortable holding through my retirement.

Here’s why…

Just imagine for a second you were one of the lucky ones who bought into the $2.45 IPO of Woolies in 1993. Today, you’d be receiving a dividend yield equivalent to 55% fully franked, per year!

Motley Fool General Manager Bruce Jackson – a buyer in the Woolies IPO and current shareholder, said this much about the supermarket giant: “As for Woolworths, due to the company’s size, the capital gains won’t be nearly as big as the past. That’s fine by me. I’m just happy to watch the fully franked dividends keep rolling in, reinvesting them, year after year after year…”

A small amount of money invested successfully, then reinvested over and over, can turn into a truly life changing sum.

As stock market legend Ben Graham wrote in his must read investment book, The Intelligent Investor: “The kind of securities to be purchased and the rate of return to be sought depend not on the investor’s financial resources but on his financial equipment in terms of knowledge, experience and temperament.”

But Woolies shareholders aren’t the only ones sitting atop impressive gains and dividend yields.

Westpac, which listed on the ASX in 1871 as The Bank of New South Wales, has generated huge returns over the years.

And we don’t have to go too far back to see just how good it has been.

Since January 2000 the bank’s shares are up 200%, plus another 140% in dividends. If you’d bought shares then, and held until today, you’d be sitting on a grossed-up annual dividend yield over 20%.

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If you’ve held any of these three shares for a long time (yes, even Telstra), well done to you. But if you’re like me and haven’t been investing that long or were one of the vast majority of people who missed the opportunity to buy Woolies, Westpac or Telstra long ago, don’t fret.

Because The Motley Fool's top analyst, Scott Phillips, recently identified one cheap but growing small-cap ASX stock with a 6.3% grossed-up dividend yield which he thinks it is a STANDOUT long-term buying opportunity today. If you're interested in knowing its name, just click on the link below, enter your email address and we'll send you the FREE report on his top dividend stock idea for 2014 - 2015!

"The Motley Fool's Top Dividend Stock for 2014-2015"

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies. 

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