3 market-beating ASX blue-chip shares

The S&P/ASX 20 Index (ASX: XTL) is also referred to as the blue-chip index as it covers the 20 largest companies on the ASX by market capitalisation.

With all of the daily activity, sometimes investors can’t see the wood for the trees. Nevertheless, when you step back and look at trends over a longer period of time, the quality and resilience of blue-chip shares really stands out. 

In the past year, only 7 of the ASX 20 companies have made a positive share price return. Most of the 13 that returned negative growth were impacted by the coronavirus pandemic. For example, Scentre Group (ASX: SCG) has seen its share price drop by 43.32%. More than anything else, this was caused by the government’s code of conduct for commercial landlords. However, the shopping centre giant likely has more hard days to come, with the country approaching a fiscal cliff at the end of September when the government’s coronavirus-related wage subsidies are due to expire. 

Of the 7 blue-chip shares that turned a positive result, here are the top 3 performers.

Blue-chip property shares

Goodman Group (ASX: GMG) is the best performing ASX blue-chip share in the past year. Up to the end of August, this company had seen its share price rise by 28.4%. Given the security saw a collapse in price by 38% from 5 March to 19 March, this is clearly a very resilient company. The Goodman Group owns, develops and manages real estate. 

The reason why this company saw less impact than, say, Scentre, is because it operates predominantly in industrial real estate – properties such as warehouses, distribution centres, offices and what are known as ‘urban infill developments’.

In FY20, Goodman Group saw an increase in operating profit of 12.5%. The company also saw an increase in valuations by $2.9 billion.

The work from home boom

The Wesfarmers Ltd (ASX: WES) share price has risen by 23.08% over the past 12 months. In FY20, the blue-chip share reported a 10.5% growth in revenues, as well as an 8.2% increase in net profits after taxes (NPAT).

Wesfarmers operates a range of brands that benefitted greatly from the sudden change to work from home. In particular Bunnings, Office Works, and Kmart saw increases in revenues directly attributable to activity through the lockdown.

However, its newest brand Catch.com also saw a dramatic upturn in revenue. Catch is an online marketplace in the style of Amazon.com, Inc. (NASDAQ: AMZN) and Kogan.com Ltd (ASX: KGN). Across the entire company it saw growth in online sales of 60%, including Catch. By itself, Catch saw a growth on gross transaction value of 49.2%.

The medical sector

Across the board the healthcare sector had mixed results. Cancellation of elective surgeries caused problems for Ramsay Health Care Limited (ASX: RHC), while Ansell Limited (ASX: ANN) did very well due to increased demand for PPE. However, CSL Limited (ASX: CSL) is the bluest of blue-chip shares on the ASX. It saw an increase in overall revenue by 9%. This extended to a 17% increase in NPAT.

Demand for the company’s therapies strengthened this financial year, particularly for immunoglobulins and influenza vaccines. Governments around the world recognise CSL as an essential service, meaning its plasma centres and manufacturing facilities remained open.

During FY21, CSL expects to see increased volumes as governments look to protect their populations from catching influenza and coronavirus at the same time.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and Kogan.com ltd and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Amazon, Ansell Ltd., Kogan.com ltd, Ramsay Health Care Limited, and Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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