Some ASX blue chip shares are demonstrating reliable performance during these uncertain times.
Here are three to consider:
Macquarie Group Ltd (ASX: MQG)
The global investment bank recently released its profit update for the third quarter of its FY21. It said that trading conditions have improved across the company.
Macquarie’s ‘annuity-style businesses’, called Macquarie Asset Management (MAM) and banking and financial services (BFS), experienced a profit increase in the third quarter compared to the prior corresponding period.
These defensive businesses reported that net profit for the nine months from MAM and BFS was largely flat with the prior corresponding period because of base and performance fees being in line with last year, partially offset by BFS margin pressure, increased credit impairment charges and higher costs to support clients through COVID-19.
Meanwhile, the market-facing businesses of commodities and global markets (CGM) and Macquarie capital experienced a significant increase in net profit in the third quarter. The profit for the nine months to 31 December 2020 was broadly in line with the prior corresponding period. There was stronger activity across most CGM businesses, offset by lower fee revenue and principal income in Macquarie Capital.
The ASX blue chip share is expecting FY21 net profit to be almost as high as the FY20 profit. Management are confident about medium-term growth potential.
APA Group (ASX: APA)
APA owns a large network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). APA owns, or manages and operates, a portfolio of assets and delivers half the nation’s natural gas usage.
In FY20 the ASX blue chip share reported that total revenue increased by 4.8% to $2.13 billion, earnings before interest, tax, depreciation and amortisation (EBITDA) grew 5.1% to $1.65 billion, operating cashflow went up 8.3% to $1.1 billion and net profit after tax (NPAT) grew by 10.1% to $317.1 million. APA decided to increase the FY20 distribution by 6.4% to 50 cents.
After announcing some recent new investments, such as a new pipeline in WA to connect to its existing network, APA decided to increase its interim FY21 distribution by 4.3% to 23 cents. The ASX share funds its annual distributions from the operating cashflow that it generates.
The new WA pipeline that I mentioned is a $460 million investment to build a 580km pipeline to connect emerging gas fields in the Perth Basin to the resource rich Goldfields region, forming an interconnected WA gas grid.
Sonic Healthcare Ltd (ASX: SHL)
Sonic is one of the world’s largest pathology businesses with operations in Europe, Australia and North America.
The ASX blue chip share is playing a key role in the fight against COVID-19 as it’s doing countless tests. The northern hemisphere, where Sonic has a major presence, is having a difficult winter with the pandemic.
The company’s base laboratory business revenue (excluding COVID-19 testing) is up on prior levels in most countries, with negative but improving growth in the USA and UK. The COVID-19 testing revenue that it’s generating is extra revenue on top of that.
Sonic Healthcare said that its revenue was up 29% in the first quarter of FY21 to $2.1 billion and its EBITDA was up 71% to $580 million.
At the annual general meeting (AGM), Sonic said that its October 2020 revenue was 33% higher than October 2019.