The S&P/ASX200 closed down just three points Friday to 7,488, the local index clawing back some ground on light trade, ahead of Annette’s 3am date with Fed Chair Jerome Powell at the virtual Jackson Hole central bankers hoedown tonight. The bottom performing stocks today were Pilbara Minerals (PLS) and Appen Ltd (APX) down 6.8% and 6.6% respectively.
Overall, the ASX 200 has had a rather flat week following last week’s negative performance. Earnings have largely been a hit, however, there have been misses from significant companies such as Appen. Given the volatility and the market outlook, here are the top blue chip stocks to consider:
The Aussie banks have been back in favour for a while now. The low-interest rate environment and reduced regulations around lending has resulted in WBC being able to increase its lending business. It has been a promising start to FY2021 with increased cash earnings, growth in mortgages and continued balance sheet strength. First half earnings were considerably higher than the prior corresponding period, mainly due to an impairment benefit reflecting improved asset quality and a better economic outlook. New lending for housing has surged, up 49 per cent over the past year, including a 75 per cent jump from the May 2020 low. WBC announced an interim dividend of 58 cents a share in light of the positive performance where statutory net profit increased by 189% to $3.4 billion, compared to the previous corresponding period.
WBC shares have thus performed extremely well given the favourable economic conditions. The firm is also embarking on a strategy to cut costs which should result in increased profitability and thus increased dividends for WBC share holders. WBC shares currently trade at $25.99 a share and a dividend yield of 3.40%.
NAB is part of the big 4 Aussie banks and as we all know, the banks have been performing extremely well in challenging operating conditions. NAB shares are now trading very close to levels seen prior to the pandemic. Increased lending to retail customers and businesses has increased as the government’s stimulus and deregulations around lending has done its bit. The increased lending has offset the low interest rate and NAB has been able to perform well. Dividends are back for the banks as well and this has caused investors to become upbeat about the banks once again. Recently, NAB also announced it intends to buy back up to $2.5 billion of its ordinary shares on-market to progress managing its Common Equity Tier 1 (CET1) towards its target range of 10.75–11.25%. NAB shares have been brought back since earlier this month and the NAB stock has been one of the top quality blue chip stocks to consider for some time now.
Currently trading at $27.64 a share after a 22% gain this year, NAB shares are one to keep an eye on.
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