2 ASX blue chip stocks I’d like to buy
ASX blue chips could be smart ideas to own during all this uncertainty and share market volatility.
Blue fries are usually the ones that have strong market positions and can provide more reliability in tough economic times.
But I wouldn’t buy just any blue chip. I would only go for those with good compound growth potential. For me, those like Commonwealth Bank of Australia (ASX: CBA) do not have this growth potential due to the size and dynamics of the industry.
But I like these two ASX blue chip stocks:
Wesfarmers Ltd (ASX: WES)
Wesfarmers is one of the best premium options in my opinion.
First of all, I like the optional nature of the business. This means that he can decide to buy and sell businesses. Wesfarmers have not always owned Bunnings or Catch. He bought them.
The company also had Coles Group Ltd. (ASX: COL) and coal assets. But he is no longer responsible for these companies.
I like the look of the Mt Holland lithium project we’re working on. This could start to work when lithium prices are very high thanks to a huge demand for electric vehicles.
Most of the companies within this blue chip ASX stock are high quality in my opinion.
Bunnings, Officeworks and Kmart are undisputed leaders in their respective industries.
Bunnings in particular is a fantastic company that generates impressive returns on capital (ROC). In 1H22, Bunnings achieved an ROC of 79%. It also recently acquired Beaumont Tiles.
I think Catch also has a good long-term future with the number of different products it can sell through an online model. No magazine is required, reducing operating costs.
As a bonus, Westfarmers is one of the strong ASX dividend stocks, in my opinion.
Wesfarmers stock price is hovering around its 52-week low, so now could be a good time to buy stocks.
Goodman Group (ASX:GMG)
Goodman is perhaps the best real estate company in the ASX.
It develops, owns and exploits industrial property worldwide. In an era of increasing digital sales and increased logistics needs, Goodman’s offering is invaluable.
The ASX blue chip share is benefiting from stronger organic growth in rental income, higher valuations and strong demand for new build properties.
In Goodman’s FY22 half-year results, it said its operating profit rose 28% to $786.2 million.
The firm now has $68.2 billion in assets under management (AUM). He expects operating earnings per share to grow by 20%.
However, with interest rates rising, I’m a bit more wary of Goodman’s stock price, so I’d probably wait until Goodman’s stock price fell below $20.