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:
Commonwealth Bank of Australia (ASX: CBA)
The first blue chip share to consider buying is Commonwealth Bank. Times certainly are hard for Australia's largest bank, but it is worth remembering that the headwinds it is facing will ease in time. Furthermore, the market has already priced in the negative consequences of the coronavirus pandemic and probable dividend cuts. In light of this, I think now is an opportune time to load up on its shares with a patient and long term view. And while all the big four banks are arguably in the buy zone now, I think Commonwealth Bank is the standout due to the overall quality of its operations and balance sheet.
CSL Limited (ASX: CSL)
Another high quality blue chip share to consider is this global biotherapeutics company. I'm a big fan of CSL due to the quality of its businesses and therapies, its growing plasma collection network, strong demand for immunoglobulins, and its high level of R&D investment. Combined, I believe CSL is perfectly positioned to deliver strong earnings growth for the foreseeable future. This in turn should lead to market-beating returns again for shareholders over the next decade.
Rio Tinto Limited (ASX: RIO)
A final blue chip to look at buying is Rio Tinto. I think the mining giant is a great option due to its world class operations and the bumper free cash they generate. Pleasingly, in the first quarter of FY 2020 the miner revealed that it is on track to achieve its Pilbara iron ore shipments guidance. Given how robust demand is for high quality iron ore and the strong pricing it is commanding, I believe Rio Tinto is well-placed for another solid profit result. So with its shares down almost 25% from their high, now could be a good time to invest.
