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- Blue chip stocks have weathered multiple market cycles and other industrial and economic challenges.
- Currently, several blue chips on the Australian share market have very positive outlooks.
- Blue chip stocks are deemed to be safe stocks with low risks that investors are known to bank on.
‘Blue chip’ is a term that is used to describe the shares of a leading company. These companies have a strong name in their industry. Their products/ services usually dominate their respective markets.
The large international corporations have ideally been operating for many years. Intuitively, they are quite stable, have long records of paying stable or rising dividends and are backed by an excellent management team and strong financial structure.
In this backdrop, let us look at 5 ASX blue chips that investors should be aware of currently-
ResMed Inc. (ASX:RMD)
- Growing at a strong rate over the last decade, is now one of the world’s leading sleep treatment companies.
- Traded at $ 24.35 with a market cap of $ 36.45 billion (as on 4 March 2021).
In Q2 FY21, ResMed witnessed a year-over-year revenue growth of 9% to $800.0 million. The operating profit was up 12% while the non-GAAP operating profit increased 16%.
The results reflect continued solid performance and positive trends across the business. This stemmed top-line growth, double-digit increase in operating income as well as earnings per share. The growth strategy is to improve 250 million lives in out-of-hospital healthcare in 2025.
The Board of directors has declared a quarterly cash dividend of $0.39 per share, payable on 18 March 2021.
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Domino’s Pizza Enterprises Limited (ASX: DMP)
- By 2033, the pizza chain operator is aiming to more than double the size of its network to 5,500 stores.
- Traded at $ 88 with a market cap of $ 8.24 billion (as on 4 March 2021).
Along with COVID-19 came long-term demand for delivered food that is ordered online.
Subsequently, Domino’s global food sales for the six months ended December 2020 increased by $260.8 million to $1.84 billion compared to the prior comparable period. The Company delivered Half Year EBITDA of $218.7 million. Domino’s opened 131 organic new stores.
The Company will pay shareholders an interim dividend of 88.4 cents per share on 11 March 2021.
Goodman Group (ASX:GMG)
- Despite the pandemic, the Group maintained a high occupancy rate of almost 98% on its properties.
- Traded at $ 17.06 with a market cap of $ 30.94 billion (as on 4 March 2021).
The logistics and warehousing sector have a key role in providing essential infrastructure to the digital economy.
For the half year ended 31 December 2020, Goodman Group delivered an operating profit of $614.9 million and operating earnings per share of 33.1 cents. Statutory profit was $1,041.5 million. Besides, the Group has increased the levels of development work in progress to $8.4 billion.
Notably, the Group has upgraded its FY21 forecast operating profit to $1.2 billion (up 12% on FY20).
BHP Group Limited (ASX:BHP)
- Even though 2020 was turbulent for business, BHP share price recovered well after the market crash in March 2020 with an upward stock trend expected in 2021 by market experts.
- Traded at $ 49.3 with a market cap of $ 148.61 billion (as on 4 March 2021).
The mining magnate delivered a strong set of results for the first half of FY21. Earnings amounted to USD 14.7 billion, EBITDA margin was 59%.
The Board also announced a record half year dividend of USD 1.01 per share, bringing the Company’s shareholder returns to over USD 30 billion over the past three years.
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Notably, the outlook for global economic growth and commodity demand remains positive. Chief Executive Officer, Mike Henry highlights that policymakers seem committed to growth and are ambitious to tackle climate change. These factors, along with rising living standards and population growth may drive growth in demand for metals, fertilisers and energy.
Wesfarmers Limited (ASX:WES)
- Reported strong sales and earnings growth across the retail businesses along with improvement in the performance of Industrial and Safety amid COVID-19.
- Traded at $ 49.92 with a market cap of $ 57.17 billion (as on 4 March 2021).
For the half-year ended 31 December 2020, Wesfarmers reported a statutory net profit after tax of $1,390 million. Bunnings, Kmart Group as well as Officeworks delivered solid trading results. Besides, there was strong online sales growth and digital engagement during the period, as online sales of $2.0 billion were recorded.
The Group reported a net cash position of $871 million at the end of the half year. The directors determined to pay a fully franked ordinary interim dividend of $0.88 per share, payable on 31 March 2021.