Even if you have never dabbled in buying or selling shares, chances are you will recognise the names of Australia’s top listed companies. These companies have survived the ups and downs of numerous economic cycles, and have become leaders within their industry, as well as household names.
Known as “blue chip” stocks or shares, they represent the pinnacle of stability and reliability in the financial markets. This doesn’t mean they’re fail-safe or always a good buy—just that their longevity and market reputation is such that they are well-regarded by analysts and investors.
For Australians keen to dip their toes into the waters of stock investing or seasoned traders looking to park some capital in a safer harbour, blue chip stocks offer a blend of stability and modest performance, along with the potential for passive income from dividends.
Related: How to Make Money in Stocks
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What Are The Top 10 Blue Chip Stocks In Australia?
As the dynamics of the market shift, the rankings of the top blue chip stocks fluctuate based on their market cap, performance, and other metrics. As of 8 August 2023, the following are the top 10 blue-chip stocks on the ASX, ranked by market capitalisation:
- BHP Group Ltd (BHP)
Description: A leading global resources company, BHP is involved in exploring and producing minerals and oil and gas.
Price: $45.32
One Year Performance: +15.85%
Sector: Materials
Market Cap: $229.58B - Commonwealth Bank of Australia (CBA)
Description: The largest bank in Australia, offering a wide range of financial services. It recently reported a record $10.2 billion profit.
Price: $102.21
One Year Performance: -0.38%
Sector: Financials
Market Cap: $171.32B - CSL Ltd (CSL)
Description: A global biotech leader that develops and produces vaccines and plasma protein biotherapies.
Price: $264.88
One Year Performance: -10.41%
Sector: Health Care
Market Cap: $127.77B - National Australia Bank Ltd (NAB)
Description: Another of Australia’s “big four” banks, NAB offers banking, financial, and wealth management services.
Price: $28.03
One Year Performance: -8.73%
Sector: Financials
Market Cap: $88B - Westpac Banking Corporation (WBC)
Description: Another of Australia’s “big four” banks, Westpac offers banking and financial services across the Pacific region.
Price: $21.71
One Year Performance: -1.63%
Sector: Financials
Market Cap: $76.18B - ANZ Group Holdings Ltd (ANZ)
Description: The last “big four” bank that provides various financial products and services in Australia, New Zealand, and Asia.
Price: $25.24
One Year Performance: +10.17%
Sector: Financials
Market Cap: $75.85B - Woodside Energy Group Ltd (WDS)
Description: Australia’s largest independent oil and gas company focused on developing its extensive hydrocarbon reserves.
Price: $38.40
One Year Performance: +20.95%
Sector: Energy
Market Cap: $72.91B - Macquarie Group Ltd (MQG)
Description: A global financial services group providing clients with asset management, retail and business banking, wealth management, leasing, and more.
Price: $175.40
One Year Performance: -0.69%
Sector: Financials
Market Cap: $67.79B - Fortescue Metals Group Ltd (FMG)
Description: An Australian iron ore company dedicated to becoming a global leader in producing and supplying iron ore products to international markets.
Price: $21.14
One Year Performance: +11.50%
Sector: Materials
Market Cap: $65.09B - Wesfarmers Ltd (WES)
Description: A diversified Australian conglomerate with interests spanning retail, chemicals, fertilisers, industrial and safety products.
Price: $49.83
One Year Performance: +6.59%
Sector: Consumer Discretionary
Market Cap: $56.51B
It’s essential for investors to remember that while these rankings provide a snapshot of the market at a given moment, stock performance and rankings can change. Regular research and due diligence are vital when considering investments.
How To Buy Blue Chip Stocks On The ASX
Investing in blue-chip stocks on the Australian Securities Exchange (ASX) is a straightforward process, even for those new to the stock market. Here’s a step-by-step guide:
- Research: Before diving in, familiarise yourself with the blue chip companies listed on the ASX. Utilise online resources, financial news, and company reports to make informed decisions. Consider consulting with a financial advisor, especially if you’re new to investing.
- Open a Brokerage Account: To buy shares on the ASX, you must set up an account with a stockbroker. You can choose from traditional brokers, who can provide advice and handle trades for you, or online brokers, where you’ll manage trades yourself. Many larger banks offer online brokerage services attached directly to your existing bank account.
- Determine Your Investment: Decide how much you want to invest. Remember not to invest money you can’t afford to lose. It is also a good idea to diversify your portfolio, so consider splitting up the amounts across multiple shares rather than going all in on one company.
- Place Your Order: Once your account is set up and you have deposited the amount you want to invest, it is time to place an order for your chosen shares. There are different types of orders, such as market orders (buying at the current market price) or limit orders (setting a maximum price you’re willing to pay).
- Monitor Your Investment: After purchasing, it’s crucial to keep an eye on your investments. Track the performance of your stocks, keep up with company news, and adjust your portfolio if needed.
Remember, while blue-chip stocks on the ASX have historically been stable, all investments come with risks. Doing thorough research and consulting with a financial advisor before making decisions is essential.
The advice and information provided by ForbesAdvisor is general in nature and is not intended to replace independent financial advice. ForbesAdvisor encourages readers to seek expert advice in relation to their own financial decisions and investments.
Frequently Asked Questions (FAQs)
What is the meaning of blue chip?
A blue chip is a recognisable, well-established, and financially sound company. Blue chips generally sell high-quality products or services and have a history of stable earnings and dividends. They are typically industry leaders and have withstood various economic challenges, making them sought after by investors.
How many blue chip stocks should I own?
The ideal number of blue chip stocks depends on an individual’s investment goals, risk tolerance, and portfolio size. Diversification is crucial in investing; owning a mix of blue chip stocks across different industries can help spread risk.
Most financial advisors recommend holding a diversified mix of stocks to balance potential rewards and risks. Consulting with a financial advisor can help determine the optimal number for your specific situation.
Are blue chip shares a safe investment?
While blue-chip shares are generally considered more stable and reliable than smaller or newer companies, no investment is entirely “safe”. All stocks, including blue chips, come with inherent risks, including market volatility, economic downturns, and industry-specific challenges.
However, blue chip companies have a track record of resilience and consistent performance, which can offer a sense of security to investors. Doing thorough research and consulting with financial experts before making investment decisions is essential.
What are some good blue chip stocks in Australia?
Australia is home to many reputable companies with consistent performance and stability that are regarded as blue chip quality. Some notable blue chip stocks on the ASX include:
BHP Group Ltd (BHP): A leading global resources company, BHP Group Ltd focused on the extraction and processing of minerals, oil, and gas.
Commonwealth Bank of Australia (CBA): As one of Australia’s leading financial institutions, CBA offers a wide range of financial services, including banking, fund management, and insurance.
CSL Ltd (CSL): An Australian biotechnology company specialising in the research, development, and manufacture of therapies and vaccines, CSL is a global leader in the biotherapeutics industry.
It’s important to remember that while these companies have historically performed well, investors should always conduct their own research and consult with financial advisors before making investment decisions.
