While many investors are avoiding blue chip shares such as Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS) right now due to their subdued growth outlook, not all ASX blue chip shares are struggling for growth.
The three blue chip shares listed below continue to perform strongly. Should you buy their shares in 2019?
Cochlear Limited (ASX: COH)
The Cochlear share price has fallen meaningfully from its 52-week high in recent months due to the market volatility and news that it has been hit with a US$268 million damages bill from a patent infringement case in the United States. While the company is appealing the judgement, the outcome of the appeal could take two years. I feel that the share price decline has now factored in this damages bill and feel it would be an opportune time to pick up shares. Especially given its strong long-term growth potential due to the ageing population tailwind and its growing global distribution network.
CSL Limited (ASX: CSL)
Another blue chip share to consider buying is this biotherapeutics company. In my opinion CSL is the highest quality company on the Australian share market and a great buy and hold option. In FY 2019 management expects the company to post net profit after tax in the range of US$1,880 million to US$1,950 million. This will be an increase of 10% to 14% on FY 2018’s underlying result. Due to its expanding plasma collection network, growing immunoglobulins sales, and pipeline of products targeting lucrative market opportunities, I believe this strong form can continue for many years to come.
REA Group Limited (ASX: REA)
A third and final blue chip share to consider buying is REA Group. I’ve been very impressed at the way the property listings company has continued to generate strong profit growth despite the downturn in the housing market. In the first quarter of FY 2019 the company posted a 17% increase in revenue to $221.9 million and a 23% lift in EBITDA to $130.9 million. This has been achieved thanks to price changes, an improving product mix, and further depth penetration.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Cochlear Ltd. and 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.