2 Blue chip shares on ASX – ASX: RIO, ASX: WPL

  • Jul 24, 2018 AEST
  • Team Kalkine
2 Blue chip shares on ASX – ASX: RIO, ASX: WPL

Big companies listed on the ASX which provide steady returns with less risk are known as blue chip shares. These are stable companies with a lesser chance to default. Here are a couple of stocks discussed under this category.

Rio Tinto Limited (ASX: RIO) has been on a favorable trend with decent short and medium term outlook, and the group has recently announced that Oyu Tologi LLC, an entity in which the company has a 33.5% indirect ownership interest, has entered into agreements with Chinese EPC contractors, for the UK Listing Rules, each of which potentially creates a smaller related party transaction. Oyu Tolgoi LLC will have to pay US$500,000 to the bidder to offset the early engineering and design work packs and the costs of preparing that bid, and the agreement entered with each bidder provides to submit a conforming bid and it is not accepted by Oyu Tolgoi LLC. On the other hand, RIO’s latest project to automate the trains that are essential to transporting the iron ore to the group’s port facilities, has been progressing well. The Group has appointed Moya Greene to the Board as an independent non-executive director, effective from September 17, 2018. The group is also in discussion with regards to its 60% stake in Diavik mine that is said to have diamond tenements.

Rio Tinto is currently trading at a higher market price of $80.47 (as at market open on July 24, 2018) with a daily price change of -0.200 or a percentage change of -0.25% a day before followed by a rise of 0.739% on July 24. The stock has seen a performance change of 27.6% over the past 12 months. The annual dividend yield for the stock is 4.57% which is fully franked. The market capitalization of the company is $32.94 billion.

Woodside Petroleum Limited (ASX: WPL) has recently delivered production of 22.1 MMboe. The sales revenue of $1,082 million was reported for the second quarter period ending June 30, 2018. Achieving 100% reliability and an annualized production rate of 5.2 million tons per annum, Pluto LNG has turned into an excellent result for the Quarter. After the quarter, including cancellation of one 3-year term facility, Woodside reduced bilateral facilities by $500 million.

Woodside Group delivers strong shareholder distributions and targets to maintain a current pay-out ratio of 80 per cent of NPAT. Recently, it signed MOU for domestic gas supply and entered into a joint venture engagement which proved to be positive. The Group also initiated the negotiations with the contractor for FEED. The Group is planning to increase its capacity from 7 Mtpa to 9 Mtpa. Its return on equity has been in the positive zone (3.4%) as at December 2017. The company is currently trading at a market price of $34.85 (market open on July 24, 2018) and has seen a daily price change of $0.270 or a percentage change of 0.784% a day before. The stock has seen a performance change of 22.89% over the past 12 months. The stock has an annual dividend yield of 3.62% which is fully franked. The market capitalization of the company is $32.5 Billion. This energy sector stock is gaining traction and is a decent blue chip share to hold on to.

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