Thanks to the recent pullback in the stock market, pieces of high-quality companies (shares) can be bought at cheaper prices than previously.
History has shown that the best time to buy is when prices are low.
It simply makes sense.
Buy low, sell high. Simple. Easy.
While share prices may well go down, or continue to display high levels of volatility, now could be the perfect time to buy shares 'on the dip' as they say. Here are 5 blue chip companies that could see your portfolio beat the market over the next decade.
CSL Limited (ASX: CSL)
CSL's share price is down 6% in the past month and is trading around $90.53 currently, having hit a high of $102.43 in August. The biopharmaceutical company develops treatments from blood plasma as well as making vaccines. CSL has had a stellar decade, returning 23.9% to shareholders on average. The low and falling Australian dollar is a nice tailwind currently, with much of the company's revenues generated offshore.
Cochlear Limited (ASX: COH)
The hearing device manufacturer has recovered from issues it experienced with a faulty processor a few years ago – and continues to see strong demand for its products. Threats to its business from cheap imitators in China and India haven't eventuated as many expected. While the company has some strong competitors with high-quality products, Cochlear still has the lion's share of the market. At the current share price of $82.60, investors can pick up shares at a 12% discount to its 52-week high price. Like CSL, Cochlear also generates a large proportion of earnings offshore.
REA Group Limited (ASX: REA)
The owner of realestate.com.au is much more than just Australia's largest and leading online real estate website. REA Group has expanded successfully offshore and also holds a substantial position in iProperty Group Ltd (ASX: IPP), giving the group access to Asia's rising middle class. At the current share price of $41.50, investors are being offered a 24% discount to the company's 52-week high price. For a high-quality company like REA, the current price is very tempting.
Seek Limited (ASX: SEK)
Online job ads business Seek has also parlayed its strength and dominance in Australia overseas, particularly into China with its holding in Zhaopin, and now most of the company's revenues come from overseas. Seek's share price has dropped more than 30% since September 2014, with many investors apparently focused on the company's short-term results. For investors willing to hold for the long-term, today's price will probably appear as being very cheap in 10 years' time.
Telstra Corporation Ltd (ASX: TLS)
Australia's giant telecommunications group Telstra has seen its share price drop from $6.50 to $5.65 in just over a month and now boasts a 5.4% fully franked dividend yield. If you ever wanted a solid blue-chip paying juicy dividends, Telstra is it, and you are even getting a cheaper price to buy in. With data consumption continuing to rise and the 'internet of things' providing a huge tailwind, the telco is perfectly positioned to continue generating decent profit growth and paying out lovely fully franked dividends for many years.
