- Blue chip stocks are popular on account of their high dividend paying capacity and strong financial structure.
- Such stocks never go old fashioned among investors as they tend to weather difficult times due to their strong financial base.
- Commonwealth Bank of Australia, BHP Group Ltd, Coles Group are some of the popular stocks in the category.
Blue chip shares find regular mention in stock and company reports. These shares are popular due to their stable reputation and dividend paying capacity. However, there is no blanket definition to define a blue chip stock. Generally speaking, such stocks are some of the oldest and largest companies with strong management and financial structure that find a place among Australia’s largest public companies indices like ASX 20 (ASX:XTL ) or ASX 50 (ASX:XFL).
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Since these stocks generally pay comparatively higher dividends than other smaller cap companies, these are much sought after among long-term investors. During market crash or recession, analysts are generally heard focusing on blue chip stocks as these tend to weather challenging circumstances due to their robust financial base. These shares could also be termed as long-term investments which the investors could use to get a continuous income through the route of dividends. Such shares could be bought by investors directly through a broker or exchange traded funds (ETFs) or unlisted managed funds.
Here we have compiled a list of 5 blue chip stocks for December 2020 on the basis of market capitalisation. These companies are spread over a range of sectors in the Australian economy.
BHP FY20 Highlights (Image Source: BHP’s FY20 AGM update, dated 14 October 2020)
Brambles FY20 Result (Image Source: Brambles’ FY20 result update, dated 19 August 2020)
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