In my opinion, Wesfarmers Ltd (ASX: WES) could be the best blue chip within the ASX.
There are a few competitors that could claim to be better like CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG) and Transurban Group (ASX: TCL). But I'll tell you why I think it's the best.
Why Wesfarmers could be the best
CSL is seemingly always going to be a healthcare business, Transurban will always be a toll road business and Macquarie will continue being an investment bank.
The great thing about Wesfarmers is its optionality. The company has the ability and shareholder approval to invest into whatever businesses it thinks are the best opportunities for the long-term.
Whilst it doesn't actually own them any more, Wesfarmers used to have operations in coal and auto mechanics. It's recently acquired a lithium miner. Who knows what it will buy next? It could be in any industry. Of course, it still has its industrial division and its various retailers of Bunnings, Kmart, Target, Officeworks and Catch.
I think as years go by we will see some industries change dramatically. It's hard to know when and where that change will happen, so having the flexibility to go into a new industry could be what keeps Wesfarmers as a top 20 ASX share for much longer than others.
Shareholder returns
Wesfarmers has a good focus on shareholder returns.
There are many businesses that just focus on the operational side of things, which should produce returns over the long-term, but Wesfarmers has been good at paying dividends and ending its involvement in operations that aren't likely to produce strong long-term returns for shareholders. Two examples I'm thinking of are the swift decision to end Bunnings UK & Ireland and divesting coal.
Ultimately, returns for us is what it's all about so it's good that Wesfarmers rewards shareholders handsomely each year.
Foolish takeaway
Wesfarmers is trading 22x FY21's estimated earnings with a projected FY20 grossed-up dividend yield of 5.1%. I'd definitely prefer to buy Wesfarmers over banks and resource businesses, however at the right price I think I'd rather go for CSL and Macquarie – but they're too expensive today for me.