When it comes to 'blue chip' shares (aka large, safe companies), most ASX investors would think of resources, banks and 'everything else'. After all, banks and resource companies make up 6 of the 10 largest ASX companies.
But perhaps the best ASX blue chip share doesn't belong to either of these sectors.
Resource stocks can be lucrative, but are unpredictable and vulnerable to swings in commodity prices. Ask anyone who bought Rio Tinto Ltd (ASX: RIO) shares in 2007 or 2008 and are still underwater a decade later.
Our banks are beloved for their dividends, but they are also vulnerable to the property market or a recession (or both). What's more, the new paradigm of low interest rates will start seriously eroding the banks' profits if rates are cut even lower by the Reserve Bank of Australia.
If not resource companies or banks, then who?
Woolworths Group Ltd (ASX: WOW), that's who. It's my opinion that this ASX grocery giant could be the best blue chip to buy at present.
This is both due to the nature of the industry that Woolworths operates within and the quality of the Woolworths brand.
To address the former point, groceries, food and other essential items are as safe a business as you could hope for. If economically tough times hit, people aren't going to stop buying food, drinks, washing powder or razors. In fact, many consumers might even switch to a discount supermarket like Woolworths over an upmarket boutique grocer if the pennies are pinching. Woolworths is (more or less) a recession-proof company – and that should be of great comfort to its shareholders.
On the latter point – Woolworths has shown that it has fantastic brand loyalty and market power in its sector. According to Roy Morgan, Woolworths was the only non-Aldi supermarket to grow market share last year. Woolies remains Australia's favourite grocer with a 34% slice of the pie (up from 32.6% in 2017) while rivals Coles Group Ltd (ASX: COL) and IGA-owners Metcash Limited (ASX: MTS) both lost ground, coming in with 27.6% and 7.1% respectively.
No doubt the successful 'Ooshie' Lion King collectables haven't hurt these statistics in 2019 so far either.
Foolish takeaway
It's my opinion that Woolworths has a lot to offer investors, particularly those who have a more conservative bent. If you're looking for a quality ASX blue chip, you could certainly do a lot worse the dominant player in an industry close to being recession-proof.
