This leading broker rates these blue chips highly…
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Having a few quality blue chip shares can be a great way to firm up a portfolio. But with so many to choose from, it can be hard to decide which ones to buy over others.
To narrow things down, I have picked out three top blue chip shares that one leading broker rates as buys. Here’s what you need to know:
Cochlear Limited (ASX: COH)
The first blue chip to look at is Cochlear. It is one of the world’s leading hearing solutions companies and has a long track record of delivering earnings growth. While the pandemic has been weighing on its performance, demand has been rebounding and looks set to continue growing over the long term. This is thanks to the ageing populations tailwind and its industry leading products.
Last month analysts at Macquarie put an outperform rating and $264.00 price target on its shares. This followed a survey of US audiologists which highlighted solid trading conditions and a growing preference for Cochlear’s products.
Fortescue Metals Group Limited (ASX: FMG)
Another blue chip to consider is Fortescue. Through its operations across the Pilbara region in Western Australia, Fortescue is one of the world’s largest producers of iron ore. And what a time to be one! With the spot iron ore price currently hovering around the US$220 a tonne mark, Fortescue is generating significant free cash flow even from its lower grade ore. Especially given that its C1 costs guidance for FY 2021 is US$13.50 to US$14.00 per wet metric tonne.
Macquarie currently has an outperform rating and $27.00 price target on the company’s shares. The broker is also forecasting huge fully franked dividends with double digit yields over the next two years.
ResMed Inc. (ASX: RMD)
A final blue chip share to look at is ResMed. It is a medical device company with a focus on the sleep treatment market. Thanks to its industry-leading products, wide distribution network, and successful acquisitions, ResMed has been growing at a very strong rate over the last decade. Pleasingly, ResMed still has a significant market opportunity to grow into because of the growing prevalence of sleep disorders.
Macquarie is positive on ResMed’s growth prospects. So much so, last month the broker upgraded its shares to an outperform rating with a $34.85 price target.
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Should you invest $1,000 in ResMed right now?
Before you consider ResMed, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ResMed wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Cochlear Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.