A UK Blue-Chip Starter Portfolio

Company	Industry	Share Price (Pence)	P/E	Yield (%)
HSBC	Financials	561	9.0	5.2
Royal Dutch Shell	Oil & Gas	2,225	7.6	5.0
BHP Billiton (LSE: BLT.L  )	Basic Materials	1,806	7.6	4.3
British American Tobacco	Consumer Goods	3,242	14.6	4.5
Tesco (LSE: TSCO.L  )	Consumer Services	310	8.8	5.0
GlaxoSmithKline	Health Care	1,447	11.4	5.3
Vodafone (LSE: VOD.L  )	Telecommunications	179	10.9	7.4
Rolls-Royce	Industrials	858	14.2	2.4
National Grid	Utilities	676	12.4	6.1
ARM Holdings	Technology	506	32.2	0.9

Excluding tech share ARM, the companies have an average P/E of 10.7 and an average yield of 5.0%. The numbers were 9.8 and 5.2%, respectively, when I last carried out this exercise in October 2011.

So, the group is rated a bit more highly today than it was nine months ago. However, I think it still veers towards the value end of the spectrum, because my rule of thumb for this group of nine is that an average P/E below 10 is firmly in "good value" territory, while a P/E above 14 starts to move toward expensive.

http://www.fool.com/investing/international/2012/07/04/a-blue-chip-starter-portfolio.aspx