The S&P/ASX 200 (Index: ^AXJO) (ASX:XJO) has now managed to post an increase of nearly 3.7% for the year-to-date (excluding dividends), largely on the back of the gains of the last two days.
Interestingly, a number of blue-chip shares have performed exceptionally well since the start of the year, with the top 10 performers highlighted below:
| Company | P/E Ratio | Dividend Yield | Price-to-book Ratio | Year-to-date Gain | 5-Yr Total Return (p.a) |
| 12.9 | 1.1% | 1.52 | 25.6% | 39.14% | |
| 34.3 | 1.4% | 16.4 | 20.2% | 30.4% | |
| 7.6 | 2.6% | 2.34 | 16.5% | 19.8% | |
| 25.1 | 3.0% | 2.21 | 13.9% | 18.2% | |
| 28.1 | 1.6% | 10.6 | 11.6% | 46.1% | |
| 32.9 | 1.9% | 2.47 | 10.0% | 27.9% | |
| 86.9 | 4.1% | 4.74 | 9.9% | 21.8% | |
| 21.5 | 2.4% | 5.24 | 9.7% | 12.6% | |
| 43.8 | 4.8% | 13.9 | 9.0% | 25.3% | |
| 36.9 | 1.8% | 17.4 | 7.9% | 20.7% |
Overall, that is a pretty high quality list of companies that have also all performed remarkably well over a five-year time frame. Perhaps the biggest surprise is the five-year returns delivered by Qantas and BlueScope Steel, although these returns do fall away over a longer time period.
However, despite their strong returns, I think the majority of investors would agree that most of the shares above appear fully valued.
Understandably, shares like CSL, Transurban and Cochlear will always demand a premium valuation due to their attractive fundamentals and impressive track records. Nonetheless, it is still important that investors purchase the shares at reasonable price – even for the highest quality companies.
With that in mind, the three companies I would most like to own from the list above would have to be:
- CSL – The biopharmaceutical company is a global leader and commands an impressive market position. It has an exciting pipeline of new products that will be launched soon and this should drive earnings growth higher once again. I would be a happy buyer if the shares traded back towards $100 per share.
- Sydney Airport – The tourism boom continues to roll on and Sydney Airport is a key beneficiary. The uncertainty of the second Western Sydney airport is playing on the minds of investors and this is a risk for the company. Nonetheless, I like the its defensive qualities and would be an interested buyer towards the $5.50 level.
- Aristocrat Leisure – The gaming company is a proven performer and continues to win market share away from its competitors. Impressively, Aristocrat recently upgraded its full-year earnings expectations thanks to a stronger-than-expected start to the year. Although the company is experiencing exceptionally strong earnings growth, the shares still look fully valued and I would look to be a buyer below the $15 per share level.
