There are plenty of ASX blue chips which are industry leaders. A ‘blue chip’ doesn’t have to mean a resource business, a bank or a telco.
These are the ASX blue chips I’d buy today to beat the ASX 200 (ASX: XJO):
A2 Milk Company Ltd (ASX: A2M), Aristocrat Leisure Limited (ASX: ALL), Amcor Plc (ASX: AMC), APA Group (ASX: APA), Cleanaway Waste Management Ltd (ASX: CWY), Brickworks Limited (ASX: BKW), InvoCare Limited (ASX: IVC), Nearmap Ltd (ASX: NEA), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Tassal Group Limited (ASX: TGR) and Webjet Limited (ASX: WEB).
There are a few shares that I’d wait to see how the coronavirus situation develops, there’s no harm in waiting. To add a few more comments about a few of the shares:
Amcor has completed the merger with Bemis. The combined business can now work on the expected synergies and grow the packaging juggernaut. The slowdown of the trade war between the US and China is occurring just at the right time for Amcor to kick on.
It’s hard to find growing businesses that are trading at good value. Amcor is trading at just 16x FY21’s estimated earnings with a projected FY21 dividend yield of 4.5%.
APA owns a huge network of gas pipelines around Australia. It also has investments in gas storage, gas energy generation and renewable energy.
The Prime Minister recently commented that gas will be a key part of Australia’s energy mix in the future, so APA is well placed to benefit from this long-term focus on gas.
Australia’s rapidly rising house prices are putting energy back into the construction sector, which should be very useful for Brickworks’ building products division in Australia.
Over the longer-term I think its US building products division, its industrial property trust and its investment in Soul Patts will all likely lead to Brickworks beating the ASX 200 over the next five years.
The Nearmap share price has been crunched over 30% at the time of writing, which is very painful.
Nearmap is not the typical type of share that I’d look at, but sometimes these smaller growth shares can be oversold on short-term concerns and be good contrarian ideas as long as further downgrades don’t occur. The company is still predicting growth for FY20 and the longer-term.
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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Amcor Limited, Brickworks, InvoCare Limited, and Webjet Ltd. 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.