If you're wanting to build a strong portfolio, owning a few blue chips could be a good starting point.
Blue chips are generally large companies that have been operating for many years, have stable cash flows, and experienced management teams. This tends to make them lower risk options and a good foundation to build a portfolio from.
But which blue chip shares should you consider buying? Two that analysts rate highly are listed below:
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CSL Limited (ASX: CSL)
The first blue chip ASX 200 share to look at is leading biotechnology company CSL.
It is the name behind the CSL Behring plasma therapies business and the Seqirus vaccine business. In addition, the company is in the process of acquiring Vifor Pharma for $16.4 billion.
Vifor Pharma has a focus on iron deficiency, nephrology, and cardio-renal therapies. It also has a research and development (R&D) pipeline that complements CSL's existing R&D activities and should be supportive of long term growth.
Citi is bullish on the company and has a buy rating and $330.00 price target on its shares. It said:
With plasma collections now back to pre-pandemic levels, we expect the market to shift its focus to the strong underlying plasma product demand. This should lead to strength in the CSL share price.
Wesfarmers Ltd (ASX: WES)
Another ASX 200 blue chip share that could be a top option for investors is Wesfarmers.
It is the company behind retail brands such as Bunnings, Kmart, and Priceline Pharmacy, and a collection of chemicals businesses. Combined with its strong management team and equally strong balance sheet, which provides further M&A opportunities, the future looks bright for Wesfarmers.
Morgans certainly believes that to be the case. So much so, it has add rating with a price target of $58.40. It commented:
We continue to see WES as a long-term, core portfolio holding with a strong mix of businesses, highly regarded management team and a healthy balance sheet.
