Well, we're only a few days away from December and the end of the year is nigh upon us. Whilst it's been a very good year on the stock market (so far, touch wood), it's probably a good time to start thinking about what our portfolios might look like heading into both a new year and a new decade.
Blue-chip shares are named after the highest value chip in poker, so when I'm thinking about what shares to put on my 2020 watch list, I want to make sure my picks live up to this reputation. So, here are 2 ASX blue-chips that I would want in my portfolio in 2020 and beyond.
Wesfarmers Ltd (ASX: WES)
Wesfarmers is perhaps the only full-scale conglomerate we have in the ASX 50. This company is really a collection of smaller companies – if you can call Bunnings Warehouse, Officeworks, Kmart and Target small. In addition to these household names, Wesfarmers also owns Kleenheat Gas, Workwear Group and stakes in Coles Group Ltd (ASX: COL) and BWP Trust (ASX: BWP), amongst others. Long story short, you are getting a massive portfolio of diversified businesses within one WES share.
I also like the approach Wesfarmers has with managing its capital. In my opinion, last year's spin-off of Coles has benefitted shareholders enormously, and shows management's interests align with shareholders. For these reasons, I think this company is a top blue-chip to buy for 2020 and beyond.
Woolworths Group Ltd (ASX: WOW)
Woolworths shares have had a phenomenal 2019 so far, rising from $29.15 at the start of the year to today's share price of $39.18 – a YTD gain of nearly 35% not including dividend payments.
I think its defensive nature as well as Woolworths' ability to hold its market share in the face of fierce competition from Coles and Aldi proves that WOW shares are a great stock to own an interest in.
However, I personally will be waiting for a lower entry price before opening a position. Woolies remains a company I would love to own in 2020, but I think its current price-to-earnings ratio is a little high for a blue-chip at 34.5.
Foolish takeaway
These 2 ASX companies are (in my opinion) amongst the bluest of the ASX blue-chips and are businesses I think would do well in any portfolio. Thus, I think Woolies and Wesfarmers would be great stock to buy for 2020 and beyond and I'll be watching WOW and WES shares for an attractive entry price going into December.
