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Patrick McGimpsey
Contributor
Updated: Apr 9, 2024, 4:11pm
Edited By
Johanna Leggatt
editor
Edited By
Editorial note: Forbes Advisor Australia may earn revenue from this story in the manner disclosed here. Read our advice disclaimer here.
The stock market is full of opportunities, but blue-chip stocks are the way to go when it comes to reliable, long-term investments. These companies are the cream of the crop, with solid financials, strong market positions, and a history of weathering economic storms. As we move further into 2024, it’s the perfect time to take a closer look at some of the best blue-chip stocks on the Australian Stock Exchange (ASX) and other global markets.
Forbes Advisor has carefully selected the top picks that should be on every savvy investor’s radar. We have focused on large-cap equities with a record of growing profits in sectors primed for growth over the next decade. From iconic Australian companies to tech giants, these stocks have the potential to deliver steady returns and add some stability to your portfolio. Of course, nothing is guaranteed and these stocks may not be right for your or your portfolio: so do your own due diligence first.
Note: The below list represents a selection of our top category picks, as chosen by Forbes Advisor Australia’s editors and journalists. The information provided is purely factual and is not intended to imply any recommendation, opinion, or advice about a financial product. Not every product or provider in the marketplace has been reviewed, and the list below is not intended to be exhaustive nor replace your own research or independent financial advice. For more information on how Forbes Advisor ranks and reviews products, including how we identified our top category picks, read the methodology selection below.
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- Feature Partner Offer
- Our Pick of The Best Blue Chip Stocks
- Microsoft Corp (MSFT)
- Apple (AAPL)
- Nvidia (NVDA)
- Meta Platforms (META)
- Coca-Cola Co (KO)
- BHP Group (BHP)
- Commonwealth Bank of Australia (CBA)
- CSL LTD (CSL)
- Macquarie Group (MQG)
- Methodology
- Frequently Asked Questions (FAQs)
Guides To Investing
- Best Dividend Stocks On The ASX
- Best Share Trading Platforms
- Best Investment Trading Apps
- Best Passive Income Ideas
- Best Short-Term Investments for Australians
- Best ‘Safe Haven’ Investments for Australians
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Our Pick of The Best Blue Chip Stocks
Our pick of the best blue chip stocks are outlined below by market capitalisation, followed by a more thorough analysis of their strengths.
| Stock (Ticker) | Market Capitalisation (AUD) |
|---|---|
| Microsoft Corp (MSFT) | 4.8 Trillion |
| Apple (AAPL) | 3.98 Trillion |
| Nvidia (NVDA) | 3.34 Trillion |
| Meta Platforms (META) | 2.04 Trillion |
| Johnson & Johnson (JNJ) | 558.02 Billion |
| Coca-Cola Co (KO) | 389.86 Billion |
| BHP Group (BHP) | 224.92 Billion |
| Commonwealth Bank of Australia (CBA) | 197.68 Billion |
| CSL LTD (CSL) | 135.33 Billion |
| Macquarie Group (MQG) | 74.67 Billion |
Note: The below list represents a selection of our top category picks, as chosen by Forbes Advisor Australia’s editors and journalists. The information provided is purely factual and is not intended to imply any recommendation, opinion, or advice about a financial product. Not every product or provider in the marketplace has been reviewed, and the list below is not intended to be exhaustive nor replace your own research or independent financial advice. For more information on how Forbes Advisor ranks and reviews products, including how we identified our top category picks, read the methodology selection below.
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Microsoft Corp (MSFT)
Market Cap
4.8T
Dividend yield (1yr)
0.71%
P/E Ratio
38.48
Market Cap
4.8T
Dividend yield (1yr)
0.71%
P/E Ratio
38.48
Why We Picked It
Microsoft, the software giant, is currently trading near all-time highs, reflecting the market’s confidence in the company’s future. With its strong focus on artificial intelligence (AI), Microsoft is well-positioned to capitalise on the rapidly growing AI sector.
As AI continues to revolutionise industries across the board, Microsoft’s investments in this field, such as its partnership with OpenAI and integration of AI capabilities into its popular products like Office and Azure, set the company up for significant growth potential. Microsoft’s strong market position, robust financials, and commitment to innovation make it a compelling choice for investors seeking exposure to the burgeoning AI sector through a well-established and reliable tech company.
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Apple (AAPL)
Market Cap
Dividend yield (1yr)
0.57%
P/E Ratio
26.39
Market Cap
3.98T
Dividend yield (1yr)
0.57%
P/E Ratio
26.39
Why We Picked It
Apple is a tech powerhouse that needs no introduction. As a household name with a loyal customer base, Apple continues to innovate and shape the future of technology. The company’s latest venture, the Apple Vision Pro, showcases its commitment to pushing boundaries and staying ahead of the curve. This mixed-reality headset aligns perfectly with the digitalisation of our daily lives.
Apple’s strong market position and ability to consistently deliver cutting-edge products and services make it a compelling choice for investors seeking stability and long-term growth potential.
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Nvidia (NVDA)
Market Cap
3.34T
Dividend yield (1yr)
0.018%
P/E Ratio
73.75
Market Cap
3.34T
Dividend yield (1yr)
0.018%
P/E Ratio
73.75
Why We Picked It
Nvidia has emerged as a leader in the semiconductor industry, with its advanced GPUs playing a crucial role in the growth of cryptocurrencies and AI. The company’s high-quality hardware and proprietary CUDA software platform have created a strong moat in the AI sector, making Nvidia the preferred choice for developers and researchers. As demand for crypto mining and AI computing soars, Nvidia is well-positioned to benefit from this.
However, investors should consider the company’s high P/E ratio, which suggests a premium valuation, and its low dividend yield, which may not appeal to income-focused investors. Despite these factors, Nvidia’s strong market position and growth potential in high-growth sectors make it a compelling blue-chip stock for investors with a higher risk tolerance and long-term outlook.
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Meta Platforms (META)
Market Cap
2.04T
Dividend yield (1yr)
0.38%
P/E Ratio
34.45
Market Cap
2.04T
Dividend yield (1yr)
0.38%
P/E Ratio
34.45
Why We Picked It
With its vast global reach and popular apps Facebook, Instagram, Threads, and WhatsApp, Meta Platforms has become an integral part of people’s lives online. The company’s impressive financial performance, with $40.1 billion in revenue and $14 billion in income in Q4 2023, reflects its recent moves to streamline operations and improve profitability. The company has also expanded into emerging technologies such as AI, mixed reality and the Metaverse.
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Johnson & Johnson (JNJ)
Market Cap
558.02B
Dividend yield (1yr)
3.14%
P/E Ratio
29.28
Market Cap
558.02B
Dividend yield (1yr)
3.14%
P/E Ratio
29.28
Why We Picked It
Johnson & Johnson is a global healthcare giant with a diverse portfolio spanning medical devices, pharmaceuticals, and consumer packaged goods. The company’s strong brand recognition and commitment to research and development have enabled it to maintain a leading position in the healthcare industry for decades.
With a solid dividend yield of 3.12% and a P/E ratio of 29.28, Johnson & Johnson presents an attractive opportunity for investors seeking a stable, blue-chip stock with exposure to the healthcare sector. The company’s robust financial performance, coupled with its ability to navigate challenges and adapt to changing market conditions, makes it a compelling choice for long-term investors looking to add a reliable healthcare stock to their portfolios.
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Coca-Cola Co (KO)
Market Cap
389.86B
Dividend yield (1yr)
3.26%
P/E Ratio
24.10
Market Cap
389.86B
Dividend yield (1yr)
3.26%
P/E Ratio
24.10
Why We Picked It
Coca-Cola is a true icon among blue-chip stocks, with a history of delivering consistent dividends and stable performance over the decades. As one of the world’s most recognisable brands, Coca-Cola has built a global empire in the beverage industry, with a wide range of products that cater to diverse consumer preferences.
The company’s strong financials, with a healthy dividend yield of 3.26% and a reasonable P/E ratio of 24.10, make it an attractive choice for investors seeking a reliable, income-generating stock. Coca-Cola’s ability to adapt to changing market trends, such as the growing demand for healthier beverages, while maintaining its core brand strength demonstrates its resilience and long-term growth potential. Coca-Cola remains a compelling choice for investors looking to add a classic, defensive stock to their portfolios.
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BHP Group (BHP)
Market Cap
224.92B
Dividend yield (1yr)
5.29%
P/E Ratio
19.84
Market Cap
224.92B
Dividend yield (1yr)
5.29%
P/E Ratio
19.84
Why We Picked It
BHP Group, the largest company on the ASX by market capitalisation, is a global mining giant, with a strong presence in the mining, metals, and petroleum sectors. As one of the world’s largest producers of commodities like iron ore, copper, and nickel, BHP is well-positioned to benefit from the growing demand for these resources, driven by technological advancements and the global push towards a more sustainable future.
The company’s strong performance in recent years can be attributed to the robust commodities markets, which have seen a price surge due to increased demand for energy, precious metals, and rare earth minerals. With a generous dividend yield of 5.29% and a reasonable P/E ratio of 19.84, BHP Group offers an attractive combination of income and value, making it a solid choice for investors looking to add a blue-chip mining stock to their portfolios.
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Commonwealth Bank of Australia (CBA)
Market Cap
197.68B
Dividend yield (1yr)
3.85%
P/E Ratio:
20.63
Market Cap
197.68B
Dividend yield (1yr)
3.85%
P/E Ratio:
20.63
Why We Picked It
Why we picked it: Commonwealth Bank of Australia (CBA) is the country’s largest bank, offering a wide range of financial services to millions of customers. The bank’s strong market position, diverse revenue streams, and focus on digital innovation have consistently delivered solid results, including a record $10.2 billion profit for 2023.
With a healthy dividend yield of 3.85% and a reasonable P/E ratio of 20.63, CBA presents an attractive opportunity for investors seeking a stable and reliable blue-chip stock in the Australian financial sector. As the economy and real estate market recover from the post-pandemic economic slump, CBA is well-positioned to benefit from increased lending activity and growing demand for financial services, making it an attractive choice for long-term investors.
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CSL LTD (CSL)
Market Cap
135.33B
Dividend yield (1yr)
1.17%
P/E Ratio
35.76
Market Cap
135.33B
Dividend yield (1yr)
1.17%
P/E Ratio
35.76
Why We Picked It
CSL is a global biotech powerhouse focused on researching, developing, and manufacturing innovative biotherapies and influenza vaccines. CSL has established itself as a leader in the Healthcare sector. The company’s products are used to treat a wide range of rare and severe diseases, as well as to prevent influenza, making CSL a crucial player in the global fight against illness and disease.
As the demand for advanced healthcare solutions continues to grow following COVID-19, CSL is well-positioned to benefit from this trend. The company’s strong research and development capabilities, global reach and reputation for quality make it an attractive choice for investors looking to gain exposure to the biotech sector.
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Macquarie Group (MQG)
Market Cap
74.67B
Dividend yield (1yr)
3.62%
P/E Ratio
17.77
Market Cap
74.67B
Dividend yield (1yr)
3.62%
P/E Ratio
17.77
Why We Picked It
Macquarie Group’s diversified business model spans various financial sectors, including asset management, retail and business banking, wealth management, and leasing. This diversification helps mitigate risk and provides investors with exposure to a wide range of financial services.
Macquarie Group’s global presence and expertise in key markets allow it to capitalise on opportunities worldwide, further enhancing its growth potential. With a healthy dividend yield of 3.62% and a reasonable P/E ratio of 17.77, Macquarie Group presents an attractive option for investors seeking a combination of income and capital appreciation.
Methodology
Our picks for the best blue-chip stocks were selected with an eye to reliable earnings, growing dividends, strong returns and reasonable valuations. The stocks outlined above are traded on either domestic or global exchanges and meet the following requirements:
- High market capitalisation: Each stock has a market cap of at least $70 billion.
- Growth Sector: Each company is positioned in a sector that is expected to grow over the next decade, such as software technology, healthcare, financial services, commodities and consumer goods.
- Profitable: The companies have delivered positive earnings for the past 12 months or more.
- Dividends: The companies pay a dividend to investors.
- Impressive 10-year returns: All stocks listed appreciated by at least 50% over the past decade.
- Shareholder yield greater than zero: Shareholder yield is a combination of dividends, share buybacks and share issuance. Negative numbers mean the company is increasing the shares outstanding and diluting shareholders.
- Accessible to Australian investors: All stocks must be easily accessible to Australian investors. All stocks are traded on large domestic and global exchanges.
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Frequently Asked Questions (FAQs)
Which blue-chip stock is best?
The best blue-chip stock varies depending on your goals, risk tolerance, and investment horizon. However, some of the top-performing blue-chip stocks operate in the technology sector, such as Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA). These companies have demonstrated strong financial performance, market leadership, and growth potential, making them attractive options for investors seeking reliable, long-term returns.
Are blue-chip stocks a good investment?
Blue-chip stocks are generally considered good investments due to their established track records, strong financials, and ability to weather economic downturns. Companies like BHP Group (BHP) and Commonwealth Bank of Australia (CBA) have delivered consistent dividends and stable performance over a long period, providing investors with a sense of security and reliability. However, it’s essential to note that no investment is entirely risk-free, and you should always conduct thorough research and consider your financial situation before making investment decisions.
Which blue-chip stocks pay the highest dividends?
Some Australian blue-chip stocks that pay a high dividend include BHP Group (BHP), Commonwealth Bank of Australia (CBA) and Macquarie Group (MQG). These companies have a history of consistently paying solid dividends to shareholders, making them attractive options for income-focused investors. However, it’s crucial to remember that high dividend yields should not be the sole deciding factor when investing, as other aspects like financial stability and growth prospects are equally important.
What is blue-chip in Australia?
In Australia, blue-chip stocks refer to well-established, financially sound companies with a history of consistent growth and stability. These companies are often leaders in their respective industries and are considered reliable, long-term investments. Examples of Australian blue-chip stocks mentioned in this article include the Commonwealth Bank of Australia (CBA), Macquarie Group (MQG), BHP Group (BHP), and CSL Ltd (CSL). These companies have demonstrated strong market positions, solid financials, and the ability to deliver consistent returns to shareholders over time.
Guides To Investing
- Best Dividend Stocks On The ASX
- Best Share Trading Platforms
- Best Investment Trading Apps
- Best Passive Income Ideas
- Best Short-Term Investments for Australians
- Best ‘Safe Haven’ Investments for Australians
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Patrick McGimpseyContributor
Patrick McGimpsey is a freelance writer passionate about crypto and its impact on the financial world. Currently working as the content lead for Australian startup CryptoTaxCalculator, Patrick has also covered the crypto industry for Canstar and The Chainsaw. Patrick has over seven years of experience in the crypto space and has previously shared his knowledge with the AML and fraud departments of Australian financial Institutions.
