When it comes to maintaining a balanced portfolio, I think having a few blue chip ASX shares is a smart move.
Traditionally, blue chips are companies that are well-known, long-established, and have strong financial positions. In other words, they are not going anywhere any time soon, which makes them safer than average options for investors.
But not all blue chip ASX shares are equal and some are better than others.
Right now, I think three of the best ASX blue chip shares are the ones named below. Here's why I like them:
REA Group Limited (ASX: REA)
The first blue chip share to consider buying is REA Group. I'm a big fan of the property listings company due to the strength of its business, its leadership position, and its solid long term growth potential. Although times are hard for the company right now, it has still been able to generate earnings growth. I believe this bodes well for when these headwinds ease.
Telstra Corporation Ltd (ASX: TLS)
Another ASX blue chip share to consider buying is Telstra. I think it is a great option right now due to the ongoing success of its T22 strategy. This strategy is cutting costs and putting it in a position to return to growth in the coming years. In the meantime, I'm becoming increasingly confident that the company's dividend cuts are over. I believe its free cash flows will be sufficient to maintain its 16 cents per share dividend.
Wesfarmers Ltd (ASX: WES)
A final blue chip share to consider is Wesfarmers. I think it is one of Australia's best blue chip shares and well-positioned to deliver solid earnings and dividend growth over the next decade. This is thanks to the quality and diversity of its portfolio, which includes the likes of Bunnings, Kmart, and several chemicals and industrials businesses. The company also has a hefty cash balance which is likely to be used for acquisitions in the near future.