If you’re wanting to construct a balanced portfolio, having a few blue chip ASX shares in there could be a smart move.
But which blue chip ASX 200 shares should you buy? Two that are highly rated are listed below:
CSL Limited (ASX: CSL)
The first blue chip ASX 200 share to look at is biotherapeutics giant CSL. Its shares have come under pressure recently and are trading well below their 52-week high.
This has been driven partly by its half year results last month. For the six months ended 31 December, CSL revealed a 16.9% increase in revenue to US$5,739 million and a massive 45% jump in net profit after tax to US$1,810 million.
While this was far stronger than expected, to the disappointment of the market, management only held firm with its guidance for FY 2021. It expects net profit after tax of US$2,170 million to US$2,265 million in constant currency for the full year. This represents year on year growth of just 3% to 8%, which will mean a sharp decline in its performance in the second half.
However, UBS remains positive on its long term growth and sees this share price weakness as a buying opportunity. It recently reaffirmed its buy rating but trimmed its price target slightly to $330.00.
ResMed Inc. (ASX: RMD)
Another blue chip to look at buying is ResMed. This medical device company has continued its strong form in FY 2021 despite the pandemic.
During the second quarter, ResMed posted a 9% increase in quarterly revenue to US$800 million and, thanks to further margin expansion, a 17% increase in net profit to US$206.4 million.
Looking ahead, ResMed appears well-placed for growth over the long term. This is thanks to its enormous addressable market. In fact, management has set itself a goal of improving 250 million lives in out-of-hospital healthcare in 2025.
Assisting the company with this goal will be its digital health ecosystem. At the end of December it reached over 12 million cloud connectable medical devices.
Credit Suisse is a fan of the company. It currently has an outperform rating and $29.50 price target on ResMed’s shares.
Where to invest $1,000 right now
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Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.