10 Best Blue Chip Stock to Watch in Australia 2024

As the most economically developed country in the southern hemisphere and the world's 12th largest economy, Australia's strong regulatory and financial systems underpin the country's investment appeal and boost the overall market. In the dynamic ASX market, blue chip stocks in Australia stand out as pillars of stability and growth potential, acting as market flags.

For investors from Australia and those in global markets looking to build a diversified portfolio and achieve a balanced investment strategy, it may be worthwhile to turn your attention to blue chip stocks in Australia and take advantage of the growth opportunities in this fertile ground.

In this article, we'll take a deeper dive into what blue chip stocks are and what makes blue chip stocks in Australia tick, and we'll list the top 10 blue chip stocks in Australia for investors to consider.

What are blue chip stocks?

In the context of poker, blue chips are more valuable than white and red chips, representing the most valuable chips. In the financial investment world, "blue chip stocks" describe stocks issued by large companies with a high market capitalisation, a good reputation, and a leading position in their industry. Blue chip stocks are highly visible across the market and are typically of a higher quality and safer with lower risk than other assets. This is due to their long operating history, reliable revenue streams, healthy financial position, and stable dividend payments. Even in times of recession or market turmoil, the solid position of blue chip stocks allows them to show some stability and resilience.

10 best ASX blue chip stocks to watch

Discover the best performing blue chip stocks on the ASX for 2024. With strong financials and a history of steady growth, these established companies are a worthy alternative for investors looking for low risk and potential returns.

CommBank(CBA)

As Australia's largest bank, Commonwealth Bank provides a comprehensive and specialised range of banking and financial services, including lending, consumer finance, deposit products, and related services to personal customers, corporate customers, and institutional users. It has branches in New Zealand and Asia, providing banking, fund management, and insurance services.

• P/B: 3.083

• Div Yield: 3.335%

• Shares Float: 1.67 billion

• Founded Date：1991

• Revenue Breakdown:

BHP Group Ltd (BHP)

BHP Group Ltd is a global mining company with diversified operations in the exploration, development, processing and production of copper, iron ore and metallurgical coal. In recent years, the company has aggressively expanded its nickel business and is committed to supplying a wider range of high quality nickel battery products. In FY2023, BHP acquired copper miner Oz Minerals, further strengthening its position in copper supply.

• P/B: 3.188

• Div Yield: 6.4%

• Shares Float: 4.78 billion

• Founded Date：1885

• Revenue Breakdown:

RIO Tinto(RIO)

Rio Tinto was formed through the dual listing merger of two companies, RTZ and CRA, and is a diversified mining company. It operates in several locations around the world and is involved in the development, smelting, processing and marketing of minerals such as iron, copper and aluminum. Iron ore, the company's main commodity, accounts for the majority of its revenues.

• P/B: 2.17

• Div Yield: 5.65%

• Shares Float: 1.43 billion

• Founded Date：1959

• Revenue Breakdown:

CSL Ltd (CSL)

CSL Ltd is a leading global biotechnology company with business activities that include manufacturing and distribution of biopharmaceuticals and related products. The company has a strong R&D team with a track record of pioneering research and development and offers a diversified portfolio of products such as plasma products, non-plasma products, gene therapeutics and recombinants, and influenza-related products. It operates through four segments, Behring, Seqirus, Vifor, and Behring, of which Seqirus is currently the second largest influenza vaccine business in the world.

• P/B: 5.498

• Div Yield: 1.23%

• Shares Float: 482.83 million

• Founded Date：1991

• Revenue Breakdown:

National Australia Bank Ltd (NAB)

National Bank is the second largest bank in Australia by market capitalisation. It has the largest share of commercial lending, and its UBank is one of the largest purely digital banks in Australia. The bank is very business-oriented and is involved in banking, credit, wealth management, fund management, and general finance. It serves a diverse client base, including individuals, small and medium-sized businesses, large corporations, and professional organizations.

• P/B: 1.8

• Div Yield: 4.67%

• Shares Float: 3.07 billion

• Founded Date：1893

• Revenue Breakdown:

Westpac Banking Corporation (WBC)

Westpac Banking Corp is Australia's longest-established banking and financial services group, with a significant market share in Australia and a nationwide branch network. The group offers a comprehensive range of banking products, financial products, and related wealth management services, with a particularly strong presence in home loans and retail deposits.

• P/B: 1.379

• Div Yield: 4.92%

• Shares Float: 3.42 billion

• Founded Date：2002

• Revenue Breakdown:

ANZ Group Holdings Ltd(ANZ)

The ANZ Banking Group has a presence in not only Victoria, but also New Zealand and the Asia-Pacific region. The group's strategic focus is on high-return segments in Australia and New Zealand. It offers a comprehensive suite of banking and financial products and related services to both retail and commercial customers.

• P/B: 1.226

• Div Yield: 6.09%

• Shares Float: 2.95 billion

• Founded Date：1835

• Revenue Breakdown:

Wesfarmers Ltd (WES)

Wesfarmers is a multi-business company and the largest conglomerate in Australia. The company's retail business is the largest contributor to profits, operating through the Bunnings hardware store chain, two discount department stores, Kmart and Target, and Officeworks office supplies. Bunnings, Kmart, and Officeworks are all No. 1 in market share, demonstrating WES's strength in the retail industry. It is also involved in the production and sale of chemicals, fertilizers, industrial and medical gases, and liquefied petroleum gas.

• P/B: 9.894

• Div Yield: 2.6%

• Shares Float: 1.13 billion

• Founded Date：1981

• Revenue Breakdown:

Fortescue Metals Group Ltd (FMG)

Fortescue Ltd. is a leading Australian iron ore miner and the world's fourth-largest iron ore producer. The company's principal business activities are the exploration, development, production, processing, transportation, and marketing of iron ore. Additionally, Fortescue has made significant investments in the green energy sector in recent years, focusing on developing green power, green hydrogen, and green ammonia projects.

• P/B: 1.808

• Div Yield: 9.78%

• Shares Float: 1.58 billion

• Founded Date：1983

• Revenue Breakdown:

Woodside Energy Group Ltd (WDS)

Woodside Energy Group Ltd. is a leading developer and producer of hydrocarbons and oil and gas, and it is expected to be the most highly leveraged company in the global market for LNG. Its principal business activities involve the development, production and sale of liquefied natural gas, pipeline natural gas and liquefied petroleum gas.

• P/B: 0.924

• Div Yield: 12.97%

• Shares Float: 1.9 billion

• Founded Date：1971

• Revenue Breakdown:

*Please be advised that the data presented above is as of August 14, 2024. It should be noted that the company's stock price, market capitalization, dividend yield, and price-to-earnings ratio are subject to change over time and market conditions. Should you require the most up-to-date information, please refer to the ASX official website or log in to moomoo.

Final words on the best blue chip stocks in Australia

A closer examination of blue chip stocks in Australia reveals that banking stocks, exemplified by CBA, NAB, WBC, and mineral sector leaders such as BHP, RIO, and FMG, comprise a significant portion of this landscape. This situation is rooted in Australia's robust financial environment and its abundant mineral resources.

Blue chip stocks are often regarded as less volatile investments, offering investors a stable dividend. However, such stocks may not align with the goals and expectations of all investors. It should be noted that blue chip stocks may not be the optimal choice for investors seeking high growth and market-beating returns. Alternatively, blue chip stocks may be an optimal investment choice for investors who adhere to a conservative strategy and lack the time and resources to engage actively in the market. Naturally, for retirees seeking to bolster their savings, blue chip stocks can be an invaluable component of a retirement plan.

In total, when exploring growth opportunities in Australian blue chip stocks, it is prudent for investors to adopt a balanced investment strategy that is adapted to their own investment objectives.