The new Aussie blue chips: 4 players to watch

Everyone’s favourite Australian blue chips have disappointed in recent months. Much loved healthcare giant CSL is facing difficult times with results to match and questions are rising about what really makes a company a blue chip.

Perhaps the question should be different though. Should anything really be considered a blue chip or do we need a rethink of this investment concept?

In last week’s article, I considered global options deserving of blue chip status for your portfolio. This week, I’ll focus closer to home, looking for the companies on the ASX that are worthy of blue chip status, regardless of their market capitalisation. I’ll also take a look at some of the biggest losers in the traditional ASX blue chips in the current market and which companies may be worth a closer look.

For this round, I spoke to:

• Henry Jennings, Marcus Today
• Marc Whittaker, IML

Approaching blue chips differently

Generally speaking, we define blue chips as consistent and stable earning businesses with competitive advantages in a structurally advantaged industry. Such companies are often termed as “sleep at night” companies, or ones you can set and forget.

In a webinar last week for Future Generation, Centennial Asset Management’s Matthew Kidman argued that investors should never rest on their laurels about any stocks and the idea of a blue chip was deeply flawed.

“As much as a business can outperform, they can underperform. They are fragile. There are some terrific companies in Australia that have gone the test of time, like the banks, BHP, RIO Tinto. The majority of companies have their moment in the sun,” Kidman said.

“You have to be aware of every stock you have and nothing is really bulletproof. The idea of putting companies in the bottom drawer and opening them up 10 years later and they’ve gone up and you have all the dividends is the minority of companies,” he added, highlighting that only one company is in the Dow Jones that was there over a 100 years ago – GE – which has struggled and been dismantled in that time.

He also highlighted that investors looking for the next blue chip a year ago would have gravitated towards Wisetech and Promedicus – both facing tougher periods today.

Marcus Today’s Jennings agrees with this view.

“With the world changing so rapidly, it’s hard these days to think of traditional blue chips as forever blue chips. You can’t think of them in the same way, except perhaps the banks which are a protected species,” Jennings says.

He suggests that at this point of time, more domestically focused and defensive companies are fitting the blue chip status more – but it’s a moment in time thing rather than a permanent view.

IML’s Whittaker’s criteria for blue chips focuses on potential for five-year periods (or longer)– reinforcing the idea that you need to remain active and no company can be an eternal blue chip.

He looks at recurring and growing earnings, competitive advantage, the balance between reinvestment in the business and distributions to investors, solid balance sheets and experienced management teams.

Three ASX companies to watch

Just as in the global piece, I tasked the fund managers with nominating companies of any market capitalisation that could be considered as a portfolio staple at this point in time – if not a blue chip. These were their nominations.

1. Telstra (ASX: TLS)

Nominated by Henry Jennings

“Telstra fits the bill in terms of domestic focus. It has consistency of earnings and dividends, with strong cashflow. They may not have a huge amount of growth but there’s certainty of earnings which many other companies don’t have,” says Jennings.

Telstra beat market expectations in its February earnings report, off the back of growth in the mobile business. It has been investing in AI – and will be cutting 200 jobs this year off the back of its AI joint venture with Accenture. It is also expanding the use of its AI assistant for customers this year.

Consensus terms Telstra as a Buy – with Market Index’s broker tool noting it as a Buy and Wilson Asset Management’s Anna Milne recently describing it as “a high quality blue chip seen as a core holding for ASX large cap portfolios.”

2. Bega Cheese (ASX: BGA)

Nominated by Marc Whittaker

The dairy and food company had a stellar reporting season, with net profit after tax up 55.3%. It’s a far cry from what the business looked like a decade ago, as a commodity exposed, bulk dairy manufacturer.

Whittaker pointed to strategic acquisitions, like Lion Dairy and Drinks, through experienced management under CEO Peter Findlay and Executive Chair Barry Irvin, as supporting business transformation to a “leading branded, consumer dairy and food business.”

“While the business does retain some commodity-based exposure, the company's earnings are far more recurring and sustainable, with strong exposures to long duration health themes around protein, gut health and better eating,” says Whittaker.

“The balance sheet is in a very sound position and the company's distributions to shareholders have grown steadily over time. We expect this to continue.”

Consensus on Market Index terms Bega Cheese as a Buy. It’s also experienced some change in underlying institutional investment in recent months with Mitsubishi UFG Financial Group stepping down its holdings, but stepped up purchases from First Sentier Group and Morgan Stanley.

3. Sigma Heathcare (ASX: SIG)

Nominated by Henry Jennings

Investors would be familiar with Sigma Healthcare’s recent takeover of Chemist Warehouse – a well-received acquisition.

“There is the potential for Sigma Healthcare to dominate in its category, with an aging population, the acquisition of Chemist Warehouse and the growth of GLP-1 drugs. These give it a level of certainty of earnings,” says Jennings.

Market consensus of Sigma Healthcare is generally positive. Market Index’s broker tool terms it as a BUY, while Morgans Financial’s Andrew Tang noted recently that it had been added to The Morgans ‘Best Ideas’ for the next 12 months. It was also added to Morgan Stanley’s Leading Ideas Portfolio in December 2025.

4. SGH Ltd (ASX: SGH)

Nominated by Henry Jennings as an emerging opportunity.

Investors continue to watch SGH after Bluescope rejected its recent takeover bid but left the door open for further discussion.

Jennings doesn’t classify it as a blue chip yet, but suggests it could be an emerging opportunity, particularly if it is successful in taking over Bluescope, selling the US business to Steel Dynamics and focusing on its core that fits with the existing Boral business.

“SGH have been patient investors in the past as we saw with the Boral acquisition and Bluescope would be a prize worth adding. They have also have strong cashflow broadly speaking. With the addition of Bluescope, it becomes a stronger, more domestically focused business worth keeping an eye on,” says Jennings.

Market Index’s broker consensus tool terms it a BUY.

A quick view of traditional ASX blue chips

The traditional names for top ASX blue chips are usually dominated by the top ten by market cap: BHP, Commonwealth Bank of Australia, CSL, National Australia Bank, Westpac, Macquarie Group, ANZ, Woodside Energy, Fortescue Metals Group and Wesfarmers.

For some of these, times are looking tough – could this be an opportunity?

In light of this, I’ve used Market Index to investigate which of these have seen the biggest losses and of these, which analysts still ‘like’. I’ve extended it to the biggest 20 ASX companies.

Of these, six companies are down for the year as at 16 March 2026.

1. CSL (ASX: CSL): -43.25%
2. Aristocrat Leisure (ASX: ALL): -30.69%
3. Goodman Group (ASX: GMG): -17.15%
4. Sigma Healthcare (ASX: SIG): -5.71%
5. Macquarie Group (ASX: MQG): -0.71%
6. QBE Insurance Group (ASX: QBE): -0.34%

Sigma Healthcare has already been addressed in this article, so I’ll briefly address the others.

Broker consensus still positions all of these as BUY on Market Index, but Aristocrat Leisure, Goodman Group and QBE Insurance stand out as STRONG BUY and therefore may merit further research for investors considering opportunities – this is not a personal recommendation, so take the time to investigate these companies and whether they are right for your portfolio.

Aristocrat Leisure is a gaming business exposed to the US consumer. It settled litigation with Light & Wonder in January for IP infringement, receiving around A$190 million in compensation.

Airlie Funds Management’s Matt Williams recently pitched it as a winner in the next cycle, describing its gaming operations as akin to an infrastructure business and holding the potential to dominate for another decade.

Industrial property and digital infrastructure business Goodman Group has had a tougher year, but ETF Shares’ Cliff Man tips it as his top pick for AI play in 2026. He points to a conservative balance sheet and the ability to capitalise off yields on data centre developments, alongside a durable barrier to entry in its space.

It is also on FNArena’s Rudi Filapek-Vandyck's radar because of its role in developing meaningful AI infrastructure.

QBE Insurance had a strong return in its most recent report, with Market Matters’ James Gerrish describing results as a standout in the insurance sector. ETF Shares’ William Taylor highlighted recently that QBE will be a beneficiary of higher interest rates.

“QBE is aggressively repricing its premiums to protect margins, this transition towards lower volatility and stable, high quality profits mirrors the harvest phase we are seeing globally, where operational discipline turns structural shifts into earnings,” Taylor said.

Rethinking blue chips

As much as everyone dreams of that company that sits and compounds in their portfolio, while they sleep for decades, the truth is, we must remain active and the fortunes of companies change.

Management changes. Industry changes. Market environment changes. What this all means is that today’s winners are not guaranteed to be tomorrow’s winners (without some exceptional efforts at evolution too).

The companies discussed in this wire and last week’s are ones that fund managers see good consistent earnings in currently, but it is important to keep on top of your portfolio and regularly assess your holdings to know if they still meet the bill.