Blue chip shares are leading companies that generally have strong business models, long track records, and products or services that dominate their respective markets.
It is because of these characteristics that they are considered to be quite stable and therefore lower risk options than the average share. For this reason, many investors will load up their portfolios with blue chip shares.
If you're looking to do the same, then you might want to look at the two listed below. Here's why they have been named as blue chips to buy:
Image source: Getty Images
Aristocrat Leisure Limited (ASX: ALL)
The first blue chip ASX share to consider is Aristocrat Leisure. It is one of the world's leading gaming technology companies with a portfolio of world class poker machines and digital games.
It recently released its half year results, which revealed that Aristocrat has bounced back strongly from the pandemic. For the six months ended 31 March, the company reported a normalised net profit after tax (NPAT) of $362.2 million. This was an increase of 18.4% on the prior corresponding period.
Aristocrat's profit growth was driven by strong performances from both its Gaming and Digital businesses. Positively, almost 80% of its revenue was derived from recurring sources during the period. This gives it a firm foundation to build on in the coming years.
This result went down well with analysts at Citi. In response, the broker retained its buy rating and lifted its price target to $46.00.
Healius Ltd (ASX: HLS)
Another blue chip share to look at is Healius. It is one of Australia's largest pathology and diagnostic imaging providers in Australia.
Like Aristocrat, Healius has been performing very strongly in FY 2021. During the first half, it reported a 16% increase in revenue to $953.5 million and a massive 190% jump in net profit to $75.6 million.
A key driver of this growth was its pathology business, which reported a 22% increase in revenue to $711.4 million and significantly wider margins. This was thanks largely to its role in testing for COVID-19.
Positively, this strong form has continued, with Healius recently reported solid growth during the third quarter. Once again, COVID-19 testing played a key role in this strong form.
One broker that is particularly bullish on Healius is Macquarie. This morning the broker retained its outperform rating and lifted its price target to $4.70.
