Longevity is something we expect from blue chip stocks, with most investors seeing the big names as “buy and hold” options to stick it out with until retirement.
These 3 S&P/ASX 200 shares have proven their staying power, taking out the mantle of some of the oldest companies in Australia.
What is it about them that’s ensured they could stand the test of time?
Westpac Banking Corp (ASX: WBC)
As one of Australia’s “big four” banks, Westpac has been operational since 1817 making it Australia’s oldest banking and financial services group.
Westpac began to build its household name after it famously set up a disaster relief fund to help victims of the Hawkesbury River Flood in NSW in 1817, later making history by hiring the first female banking employee in Australia in 1898.
Westpac was the first Australian big bank to offer ATM services back in the 1980s and later the first bank in the world to launch electronic banking, or EFTPOS services, through its Handyway platform.
Corporate partnerships and innovations have continued to propel the company forward ever since, but two centuries of business brings inevitable ups and downs and the Financial Services Royal Commission has brought about some unrest in the sector.
Westpac shareholders seemed unperturbed by news out of The Guardian Australia last week that Westpac’s BT Financial Group lost the files of 215 customers it was providing with financial advice, with share prices up to $27.82 at the time of writing.
Westpac’s 6.8% dividend certainly works to keep many investors happy and peer National Australia Bank Ltd (ASX: NAB) pays out 7.5% to keep its punters on side.
Morgan Stanley downgraded Westpac back in February, dropping its price target on the stock from $32.10 to $30.00, with concerns the bank’s margins had peaked, but Westpac was not the only big bank to get a ratings chop.
At the same time Morgan Stanley placed underweight ratings on Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank with an equal-weight rating on Australia and New Zealand Banking Group (ASX: ANZ).
With the royal commission still in play there could be some tumultuous times ahead for all of the big banks, with Westpac not immune, but after 200 years in the game its unlikely this sector stalwart will stay down for long.
Wesfarmers Ltd (ASX: WES)
Supermarket and department store business group Wesfarmers Ltd has been around since 1914 after a group of farmers formed an association to help market their produce through co-operative action.
It was a humble beginning, but many Australians still stock up on their household essentials at Wesfarmers’ flagship grocery chain – Coles – more than 100 years later.
Wesfarmers has battled through some volatility in the last 12 months, and is always going neck and neck with Woolworths Group Ltd (ASX: WOW) for market share with its share price opening up 0.8% to $46.03 today while Woolworths opened up 0.1% to $28.72.
Citi brokers did place a sell rating on Wesfarmers this week, reducing its price target to $41.10 as headwinds in the housing market could hit Wesfarmers’ earnings growth.
While Wesfarmers shares are not likely in buy territory right now, it would take a lot to knock this sector darling from its mantle, and those who already have skin in the game should feel their funds are safe for now, judging from history.
AGL Energy Ltd (ASX: AGL)
Integrated energy company AGL has been around since 1837, with more than 180-years’-experience generating electricity for Australians.
As the largest ASX-listed renewable energy investor AGL is certainly a forward thinker, with a strong strategy to “prosper in a carbon-constrained world”.
The last 12 months has seen the AGL share price take a downturn, with shares down 0.6% to $20.86 at the time of writing.
Credit Suisse downgraded AGL earlier this week from outperform to neutral and rising pressure from changing government regulations has hit AGL hard of late, despite peer Origin Energy Ltd (ASX: ORG) showing a clear 12 months of share price rises to sit up 0.3% to $9.68 at the time of writing.
Although AGL had it tough of late, I think its focus on renewables will be the key to its success with hydro, wind, gas, solar and biomass energy sources destined to become big-time energy producers as renewables take the spotlight.
AGL has proven its got staying power so far, so we expect nothing less of this pioneer going forward.
Blue chips work in the billion dollar realms, but lets talk trillions for a moment.
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Motley Fool contributor Carin Pickworth owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, and National Australia Bank Limited. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.