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Date : 05/10/2021

3 Top Performing ASX Blue Chip Stocks

The ASX 200 lost 30.1 points or 0.41% to 7,248.40 on Tuesday. Today’s move partially retracing gains of 1.3% in the previous session as blue chip stock investors retreated from riskier positions amid fears of rising inflation and a potential U.S. default. The Reserve Bank of Australia held policy settings at their current levels in line with the market expectations.

Our List of ASX Blue Chip Stocks to Buy Now

With the broad market continuing to retrace, we have found 3 solid, top performing ASX blue chip stocks you might consider buying during the dip:

BHP Group (ASX: BHP)

BHP is arguably the most well-diversified mining and exploration company there is, and it is a part of every investor’s portfolio for different reasons – maybe for the stable dividends, or to decrease the overall volatility of the portfolio. It is also one of the best blue chip stocks that trade on the ASX.

However, the BHP share price has come under significant pressure this month. Today, the mining giant’s blue chip shares went down by 1.14% to $36.52 per share. This means that BHP’s shares are now down by almost 14% since last month. What happened? One of the causes is further weakness in the iron ore price after curtailed steel production in China hit demand for the base metal. Not only BHP experienced such a pullback, but other mining giants went also through the same ride.

China, which is the world’s second-largest economy is aiming to cut steel output growth this year to 2020 levels. Although, after expanding around 12% in the first half of this year, the country is now reducing its steel output by 12.2% from August to December to reach its goal. However, we remain optimistic about the rebound of iron ore prices driven by a return in demand by the end of the first quarter of 2022.

The falling BHP shares were keeping the Australian market lower while investors could not shirk concerns about the troubled property giant Evergrande. The ASX has bucked a good lead from the US as investors look for confirmation that Evergrande paid a $US83.5 million interest payment on Thursday. Evergrande pledged it would. Although some investors say they are yet to see the evidence. The Chinese giant is struggling to pay about $418 billion in debts and investors fear a collapse could reverberate around the world.

Despite the recent event, BHP’s blue chip stocks remain on a solid play, especially for its lucrative dividend of US$ 3.01 per share representing a solid payout ratio of 89%. The record blue chip stock dividend was the result of operational excellence throughout the year. BHP exhibited solid performance that led to consistent free cash flow generation and an efficient margin of 64%.

Origin Energy (ASX: ORG)

From electricity, natural gas to solar and LPG, Origin Energy is a leading provider of energy throughout Australia. It is an integrated company with key operating segments that include exploration, production, generation, and renewable energy.

The Origin Energy share price continue to skyrocket since last week despite the broad market volatility. At the time of writing, it is trading at $5.05 per blue chip share. What move ORG share price since last week? Thus, since the last few days, Origin has appreciated not less than 6.32%. This happened as the company announced a positive update regarding its UK investment in Octopus Energy.

Origin strategically invested a total of $507 million into Octopus last year, earning it a 20% stake in the UK energy retailer. This was on a valuation of around $2.5 billion at the time.

Last week’s release revealed that Octopus Energy has received a GBP 211 million investment from Generation Investment Management, a sustainable investment manager. As a result, Origin has today announced it will be adding up an additional GBP 38 million in Octopus to maintain its 20% equity stake. So essentially, Origin must pay up to keep the gains coming in from Octopus.

Since Origin’s initial investment in Octopus, the position has grown in value to $1.1 billion. Hence, a lucrative 92% return in a relatively short time.

At the time of writing, today’s trading volume is more than 9.5 million Origin blue chip shares changing hands. This remains fairly above the 4-week average volume of 6.4 million shares exchanging daily.

Apart from a stock that has recently gained momentum, Origin’s ASX blue chip stocks offer an amazing dividend yield of 4.43%.

Bank Of Queensland (ASX: BOQ)

The Bank of Queensland is one of Australia’s leading regional banks. BOQ provides a full suite of personal financial services including banking, credit cards, home loans, insurance, and online share trading. The company also provides banking products to businesses.

Additionally, the BOQ operates many acquired brands. Virgin Money, a retail financial services company, and St Andrew’s Insurance, an Australian provider of consumer insurance and life insurance.

Have BOQ’s blue chip shares been a worthwhile long-term investment? Well, the answer is probably yes. The Bank’s share price has pushed higher over the past decade, up around 40%. In comparison, the ASX 200, is up around 85% over the same time frame. During October 2019, BOQ’s blue chip stocks were hovering around today’s levels, before freefalling thereafter. While the regional banks’ shares have somewhat recovered, they are still a long way off 2015’s record high at the $13 mark. We believe that it might be the right time to grab some BOQ blue chip shares while it is still affordable.

More importantly, BOQ is a solid dividend stock. Hence, over the last decade, the Bank has made a total of nineteen dividend payments from 2011 to 2021. Its most recent dividend distributions were significantly reduced due to the pandemic affecting its operations.

Adding those nineteen dividend payments gives us $6.08 per blue chip share. Calculating the shares owned against the total dividend payment gives us a figure of $942.40 which is 155 shares by $6.08. When putting both the initial investment gains and the dividend distribution, an investor would have made a solid $2,373 from BOQ blue chip shares.

For a year, BOQ share price has moved 65% higher and is up around 20% year-to-date.

Are You Looking To Buy The Best Stocks In 2024?

Stay on top of upcoming market trends! Whether you are an SMSF investor or a young investor with your portfolio, we cover a wide range of stocks across all sectors, including mining, financials, industrials, real estate, technology, health and biotech, etc. It will give you an edge to invest and trade ASX listed stocks across large, mid and small caps with an advantage.

Get stock tips with our Market Experts. We help self-directed investors and self-managed super funds (SMSF) make smarter investment decisions and get better returns. Fill in your details and download your free Report instantly for Top 3 Dividend Stocks to buy in 2024!


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