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3 outstanding blue chip ASX shares to buy in October

If you’re wanting to add some blue chip shares to your portfolio, then you’re in luck. The Australian share market is home to a good number of blue chips which I believe could generate strong returns for investors over the next decade.

Three blue chip shares that I would buy are listed below. Here’s why I like them:

Coles Group Ltd (ASX: COL)

One of my favourite blue chips is this supermarket operator. Although its shares have been on a tear this year, I still think they are good value for a long-term investment. Especially given its solid growth prospects and attractive dividend policy. In respect to the former, I expect Coles’ focus on cost cutting through automation and efficiencies will support solid earnings growth over the next decade. This bodes well for the aforementioned dividend policy, which aims to pay out 80% to 90% of earnings to shareholders. Based on this policy, I estimate that its shares currently provide a fully franked forward 3.5% dividend yield.

CSL Limited (ASX: CSL)

Arguably the best blue chip on the Australian share market is this global biotherapeutics company. I believe CSL is one of the highest quality companies Australia has produced. And thanks to the quality of its businesses and products, its growing plasma collection network, strong demand for immunoglobulins, and its high level of R&D investment, I am confident that it will continue to deliver strong earnings growth for the foreseeable future. Overall, I expect this to lead to market-beating returns again for shareholders over the next decade.

Wesfarmers Ltd (ASX: WES)

A final blue chip share to consider buying is Wesfarmers. Due to the improving housing market, I think this conglomerate could be a strong performer over the coming years. This is because its key Bunnings, Kmart, and Target brands all have exposure to the housing market. Another bonus is its generous dividend. I estimate that Wesfarmers will pay a FY 2020 dividend of $1.53 per share, which equates to a fully franked 3.9% dividend yield.

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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 Wesfarmers 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.