There are a number of quality blue chips in the S&P/ASX 200 Index (ASX: XJO) that I'd be willing to invest in today.
Some investors may be excited by the value offered by shares like Westpac Banking Corp (ASX: WBC) and Sydney Airport Holdings Pty Ltd (ASX: SYD) which have seen heavy share price declines during this decline. I'd prefer to get a sense of how long the lockdowns will last before buying shares with big balance sheets.
However, I'd be very happy to buy these three ASX 200 blue chips:
Service Stream Limited (ASX: SSM)
This business is heavily involved with essential networks. It is involved in the design, construction, operation and maintenance of infrastructure. Namely, telcos, electricity, gas, water and 'new energy'. It regularly wins contracts and it had been steadily growing profit before the coronavirus.
In the half-year result it reported more growth and with Australia's growing cities I think Service Stream to watch for the long-term.
However, its share price has dropped 28.4% since early February 2020. I think infrastructure could be one of the ways that governments look to stimulate the economy.
It's trading at 12x FY22's estimated earnings with a grossed-up dividend yield of almost 7%.
Bega Cheese Ltd (ASX: BGA)
Bega Cheese hasn't seen its share price smashed like some other ASX businesses, but I think it could be very good value today.
The drought has severely hurt valuations of most agriculture businesses. But there's been some rain in regional areas and there is high demand for food products. I think Bega has seen the low and could be one of the better ASX 200 performers this year.
I wouldn't be surprised to see that sales of peanut butter and vegemite have been extremely strong during this period.
It's currently trading at 17x FY22's estimated earnings.
Brickworks Limited (ASX: BKW)
Brickworks is one of my favourite ideas within the ASX 200 at the moment. The construction industry is obviously going to be materially affected during this time. But I'm not sure if it will be as bad as some people are expecting with the price that Brickworks is trading at.
The US seems determined to open up the economy again (even if it's prematurely). Construction activity has continued across Australia and it's one of the things governments seem keen to continue – Spain is trying to get construction going again despite the heavy human toll.
Besides, even if the building products profit went to $0, there is a reliable source of earnings and cashflow coming from Brickworks other assets of its 'investments' and the industrial property trust.
I think the Brickworks share price is looking very cheap after a 33% fall since 20 February 2020.
Foolish takeaway
I think all three of these ASX 200 blue chips could be good long-term buys today. I'd love to buy Brickworks shares today, but I think Service Stream also looks like a promising pick for a savvy investor.
Bega could be a strong performer, but the fact that its revenue is sort of commodity-like, I'm uncertain if it's a good long-term idea – it could be very good in the shorter-term though.
