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3 shares for a blue-chip portfolio

The share market is full of businesses that everyone sees in every day life, but most people may not realise you can buy a piece of them on the ASX.

Not every share is a good investment idea – just because you’ve heard of Telstra Corporation Ltd (ASX: TLS) or Woolworth Group Ltd (ASX: WOW) doesn’t mean they’re good investments.

These three blue-chip shares could be good options for your portfolio:

Bapcor Ltd (ASX: BAP)

Bapcor is Australia and New Zealand’s leading aftermarket auto parts business with its Burson and Autobarn chains. It also runs a number of specialist chains including electrical parts.

Despite running two nationwide brands it is a relatively unknown business in the share market world despite generating strong returns for shareholders over the past few years. It has made a number of acquisitions to improve its economies of scale.

Management have done a good job of improving profit margins over the years, particularly with realising synergies at the acquired businesses.

Management have plans to steadily grow its store numbers throughout the country and management aren’t afraid of chasing additional acquisition opportunities. It was in the running for Kmart Tyres & Auto and recently acquired Hellaby in New Zealand.

The company may be opening another avenue of growth by expanding into Thailand.

Bapcor is currently trading at 24x FY18’s earnings with more profit growth expected in FY19.

Crown Resorts Ltd (ASX: CWN)

Crown is the leading casino resort operator in Australia with its large Melbourne and Perth locations.

You may remember that Crown went through a bit of trouble a while ago with Chinese VIP gamers, however it now seems to have gotten through those issues and underlying growth has returned to both casino and non-casino earnings.

Whilst Crown is paying out a decent partially franked dividend yield of 4.6% in the short-term it is the completion of Crown Sydney in a few years which could be a big boost to earnings. However, you have to be patient until it opens in 2021.

It’s currently trading at 21x FY19’s estimated earnings.

REA Group Limited (ASX: REA)

REA Group is the owner of Australia’s leading property portal website realestate.com.au. Being number one means it attracts the most sellers, which attracts the most buyers and so on. A very positive self-fulfilling cycle.

REA Group also runs other leading Australian property sites like realcommercial.com.au and flatmates.com.au. Another aspect to REA Group is its investments in leading property sites in South East Asia, India and the US.

I really like the idea of owning a piece of a business which generates revenue from almost every single property sale in Australia. The falling share price is making REA Group look more and more attractive each week. Negative sentiment surrounding property could create a buying opportunity to purchase REA Group shares.

It’s currently trading at 29x FY19’s estimated earnings.

Foolish takeaway

All three of these shares are leaders in their industries and are worth billions of dollars. I’d be comfortable to have each of them as sizeable parts of my portfolio. I’d be happy to buy a stake in any of them at the current price, but it would be better if each of them were 10% cheaper.

Want some more blue chip share ideas for your portfolio? These stocks could provide the growth and reliability that you desire.

3 Top Shares To Buy This Month

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for FY19."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

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Motley Fool contributor Tristan Harrison owns shares of Bapcor. The Motley Fool Australia owns shares of and has recommended Bapcor, Crown Resorts Limited, and Telstra Limited. The Motley Fool Australia has recommended REA Group 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.

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