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3 outstanding blue chip ASX shares to buy for FY20

A new financial year is just around the corner, so what better time to take a look at your portfolio and consider making a few changes.

If you have room for a blue chip share or three, then I think the ones listed below could be great options for FY 2020. Here’s why I like them:

Coles Group Ltd (ASX: COL)

I think that this supermarket giant could be a good addition to a balanced portfolio due to its defensive qualities and solid growth prospects. The latter is expected to be driven largely through its focus on automation over the coming years. Coles aims to cut costs materially by automating its distribution centres and online shopping fulfilment. If the company can combine this with top line growth, it could be a big boost to its earnings and dividend growth over the next decade. At present I estimate that its shares offer a forward fully franked 4.4% dividend yield.

CSL Limited (ASX: CSL)

My favourite blue chip share on the Australian market is this biotherapeutics giant. CSL is made up of two businesses – CSL Behring and Seqirus. CSL Behring is the global leader in plasma therapies and Seqirus is the second biggest in the influenza vaccines industry. I believe both businesses have outstanding long-term growth prospects due to their leading products and deep research and development pipelines. Overall, I remain confident that CSL’s shares have the potential to be market beaters again over the next decade.

Telstra Corporation Ltd (ASX: TLS)

Although this telco giant’s shares have surged significantly higher this year due to its improved performance and the early success of its T22 strategy, I don’t think it is too late to snap them up. Especially given the return of rational competition in the telco market and the company’s leadership position in 5G. The latter is expected to be a key driver of growth over the next few years and, combined with its significant cost cutting program, could lead to modest profit growth from FY 2020 onwards.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET and Telstra 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.