Leading ASX blue-chip shares can be excellent investments because of their strong brand power, leading margins and ability to attract more customers.
When an industry is very competitive, it makes it harder for a business to maintain profits or market share, as we've seen in the banking industry in recent times.
The three ASX blue-chip shares I want to highlight are leading businesses that are delivering for customers and shareholders. I think all three of them could beat the S&P/ASX 200 Index (ASX: XJO) return over the next few years with a $3,000 investment.
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Coles Group Ltd (ASX: COL)
Coles is one of the largest supermarket businesses in Australia, meaning it provides very defensive earnings – we all need to eat. The rising Australian population is a natural tailwind for demand at Coles supermarkets.
The ASX blue-chip share is currently doing a better job at growing sales than its main rival, Woolworths Group Ltd (ASX: WOW). In the first quarter of FY26, Coles supermarket sales increased by 4.8%, or 7% excluding tobacco sales.
Combined with its new automated distribution centre and customer fulfilment centres (CFCs), I'm expecting the company's profit margins to rise in FY26.
It has a steadily rising dividend too, which is a useful bonus for investors wanting some passive income.
Telstra Group Ltd (ASX: TLS)
Telstra is the leading telecommunications business in Australia, with the most subscribers, the widest network coverage and strong spectrum assets.
The company has invested heavily in its 5G network over the last few years, giving it an advantage over rivals and enabling it to attract more subscribers.
As its subscriber base grows, the ASX blue-chip share is able to spread the network cost across more users, which is useful for margins and helps justify its capital expenditure.
The outlook is promising too. Australia is becoming increasingly technological, which is a good tailwind for further demand for Telstra's services. I'm hopeful, for Telstra's sake, that its 5G network can also be utilised for home broadband connections, allowing it to capture the profit margin from the NBN for that household's internet connection.
On the passive income side of things, Telstra has been able to hike its dividend in the last few financial years thanks to earnings growth and I think that's likely to continue in the next few years.
REA Group Ltd (ASX: REA)
REA Group is the leading property portal business in Australia, with realestate.com.au. If a residential property is being sold in one of Australia's cities, there's a good chance it has been listed with REA Group.
This gives the business excellent market and pricing power, which it is using to full effect. Higher prices for the property ads are helping drive the company's profit margins upwards, thanks to its digital business model.
The ASX blue-chip share is now involved in many areas of the Australian property world including commercial property advertising, shared accommodation, property data, mortgage broking and more.
Excitingly, the company also has a presence in the Indian property portal world with its REA India division. If this segment continues growing revenue at a double-digit pace year after year, it could be a sizeable contributor to the company's financials by the end of the decade.
