The ASX has a large number of quality shares that can create a strong blue chip retirement portfolio.
I’m not talking about Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS).
I am referring to ASX blue chip shares that are leaders in their respective industries and are delivering revenue & profit growth such as these three:
Crown Resorts Ltd (ASX: CWN)
Crown is Australia’s largest resort & casino business with its large complexes in Melbourne and Perth.
The share price has dropped 14% due to worries about VIP gaming. However, the other segments like the hotels and regular floor gaming is going quite well.
Every month that passes brings Crown closer to completing and opening Crown Sydney, which could be another huge earner. The richest people will want to stay at the nicest hotels in Australia and perhaps gamble too.
It’s currently trading at under 20x FY19’s estimated earnings with a partially franked dividend yield of 5.1%.
REA Group Limited (ASX: REA)
REA Group has proven to be one of the highest-quality growth shares on the ASX for the past decade. It gets a small slice of each property sale due to its advertising platform, which is integral for attracting buyers.
The falling housing market has hurt sentiment for REA Group, however the company appears to be benefiting as vendors are paying up for better advertising. This is a powerful position for REA Group as it allows it to increase prices with little detrimental effect.
It has increased its dividend strongly over the past decade and will likely keep going up quickly as long as earnings keeps growing by double digits.
It’s currently trading at under 29x FY19’s estimated earnings with a grossed-up dividend yield of 2.1%.
DuluxGroup Limited (ASX: DLX)
DuluxGroup is a home improvement leader with many brands like Dulux, British Paints, Yates, Selleys and Cabot’s.
Having a stable of high-quality brands attracts a reliable source of revenue for DuluxGroup and it should be relatively unscathed from the housing downturn as small renovations usually continue even through downturns.
If DuluxGroup can continue to slowly grow profit margins and grow the top line it can be a solid performer over the long-term, as it has been in recent history.
It’s currently trading at 18x FY19’s estimated earnings with a grossed-up dividend yield of 5.7%.
I believe these three shares will be solid performers over the next five to ten years and are good candidates for beating the ASX market due to the weighting of the banks in the index, which I think will be poor performers. At the current prices it’s hard to pick a winner out of the three as they’re all trading at reasonable prices.
Some other blue chip ideas for a retirement portfolio are these reliable and growing top stocks.
For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Crown Resorts Limited and Telstra Limited. The Motley Fool Australia owns shares of National Australia Bank 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.