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Why I would buy these ASX blue chip shares in 2020

If you’re wanting to add some blue chip ASX shares to your portfolio, then now could be a good time to do it. 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 ASX shares that I would buy are listed below. Here’s why I like them:

Coles Group Ltd (ASX: COL)

One of my favourite blue chip shares is this supermarket giant. I’m a big fan of Coles due to its very strong market position, defensive qualities, and solid growth prospects. The latter is due to its expansion opportunities and its focus on cost cutting through automation and efficiencies. Another positive is that Coles intends to pay out 80% to 90% of its earnings to shareholders as dividends. This could make it a great option for investors looking for a source of income as well as capital returns.

SEEK Limited (ASX: SEK)

Another blue chip that I would consider buying right now is SEEK. I think this job listings company would be a great long-term option due to its very positive growth outlook. In FY 2019 SEEK delivered revenue of $1,537.3 million, which was up 18% on the prior corresponding period. The good news is that management is targeting even stronger growth over the next five years. It has set itself an aspirational revenue target of $5 billion by FY 2025.

Telstra Corporation Ltd (ASX: TLS)

At the current level I think Telstra is a good option for blue chip investors. Times certainly have been hard for the telco giant, but with its T22 delivering solid early results, I believe its outlook is improving greatly. Combined with the arrival of 5G and the return of rational competition, I feel a return to profit growth is not that far away for Telstra.

5 stocks under $5

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*Extreme Opportunities returns as of June 5th 2020

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended SEEK 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.

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