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Highlights
- CSL shares have slightly increased by 0.1% in 2024.
- Wesfarmers shares are currently 11.9% below their 52-week high.
- Both CSL and Wesfarmers are prominent blue-chip companies with strong reputations.
Investors keeping an eye on ASX blue-chip stocks might find CSL Ltd and Wesfarmers Ltd interesting, given their recent performance. CSL shares have increased by 0.1% since the start of 2024, while Wesfarmers' share price is currently 11.9% below its 52-week high. Let's explore why these companies stand out in the market.
CSL Ltd (ASX:CSL)
CSL is a well-established biotechnology company known for developing and delivering life-saving medicines. It operates through three primary business units: CSL Behring, CSL Seqirus, and CSL Vifor.
- CSL Behring, acquired in 2004, specializes in blood plasma products.
- CSL Seqirus, formed after acquiring Novartis’ flu business in 2015, focuses on flu-related products and pandemic services.
- CSL Vifor produces treatments for iron deficiency and renal care.
Over the years, CSL has earned a reputation for its reliability and consistency, particularly in terms of dividend payouts. The company is often seen as a solid play on the growing global demand for healthcare products and services.
Wesfarmers Ltd (ASX:WES)
Founded in 1914, Wesfarmers is a major Australian conglomerate with operations spanning retail, chemicals, and industrial services across Australia and New Zealand. Wesfarmers is best known for its successful acquisition and reinvestment strategies, having owned brands like Coles and spinning them off after substantial growth.
By far, Wesfarmers' largest source of profit (over 50%) comes from Bunnings, Australia's leading hardware and home improvement chain. The company acquired its final stake in Bunnings in 1994 for $594 million, and the investment has paid off significantly.
In addition to Bunnings, Wesfarmers owns other well-known brands like Kmart, Target, Officeworks, and Priceline Pharmacy. This broad portfolio, combined with its history of strategic investments, makes Wesfarmers a long-standing blue-chip stock on the ASX.
CSL Share Valuation
When examining CSL’s current valuation, one method to consider is its dividend yield over time. Presently, CSL shares have a dividend yield of 1.37%, slightly below the five-year average of 1.50%. This difference may indicate that the share price is rising faster than dividend payments, as CSL's dividend last year was higher than its three-year average, showing growth in payouts.
Both CSL and Wesfarmers have established themselves as dependable companies within the ASX, attracting attention for their strong business models and consistent performance in their respective sectors.
