The S&P/ASX 50 index may not be as well-known as the S&P/ASX 200 Index (ASX: XJO), but it is arguably just as important.
This illustrious index is home to 50 of the largest companies on the Australian share market. These include household names and companies that are true blue chip shares.
While not all shares on the index are necessarily in the buy zone, I think there are a few that could be.
Here's why I would buy these two outstanding ASX 50 shares:
CSL Limited (ASX: CSL)
My favourite ASX 50 share is biotherapeutics giant CSL. I think it is one of the best options on the index due to its high quality CSL Behring and Seqirus businesses. I believe these businesses are well-placed to deliver strong sales and earnings growth over the next decade.
This is thanks to their leading products and lucrative research and development (R&D) pipelines. In respect to the latter, in FY 2019 CSL invested US$832 million in its R&D activities and a similar level of investment is expected this year. I believe these investments will allow the company to maintain its market-leading position and underpin solid profit growth for the foreseeable future.
Telstra Corporation Ltd (ASX: TLS)
Another ASX 50 share to consider buying is this telco giant. I've been very impressed with the progress of Telstra's T22 strategy. This game-changing strategy is stripping out costs and simplifying its business, making Telstra a leaner and more nimble business.
In addition to this, the NBN headwind is starting to ease and peak pain from the rollout is just around the corner. When this is reached, the drag on its earnings will subside and earnings growth will become a lot more achievable. Other positives that look set to be supportive of growth in the coming years are the arrival of 5G internet and rational industry competition. In light of this, its lucrative infrastructure assets, and its attractive valuation, I think now would be an opportune time to invest.
