The laws of the market are immutable. Risk and reward are directly related. Those seeking higher rewards must seek higher risks, and those seeking less risk must accept lower returns*. Therefore investors seeking higher growth exposures must look outside the top blue chip stocks. Right? Wrong.

Two top twenty stocks in Australia are offering estimated double digit long term growth. And both reported this week.

Woodside Petroleum (WPL) is the largest Australian-listed energy producer. It was built on the fabulous natural gas resources of the North West Shelf off WA, beginning in 1984. In 2012 it brought the Pluto fields on line, and is now well advanced in the planning of the Browse gas facilities. After a period of rationalisation it now has a number of longer term development projects and a cleaner balance sheet.

This week the company reported a 6% lift in half year profit, and plans to invest $23 billion over the coming year. According to Bloomberg the average of 16 analysts’ long term growth forecasts 13.6%. And it will pay dividends of around $1.45 plus franking. Investors who agree that natural gas is the best compromise between the environment and the economy may find these numbers of particular interest.

CSL is a great Australian success story. It’s in the business of saving lives with its blood products. In the last seven years it rose from $26 to levels over $200. A highly successful research and development culture is complemented by a globally diverse business Simply put, CSL keeps delivering.

In its full year results this week CSL not only delivered a 29% lift in net profit, it guided analysts to a 10% - 14% range for profit growth in the coming year. This is well above the profit forecasts for this season, with the top 200 stocks expected to show 5-7% growth. CSL management in the past have “under-promised and over-delivered”, and its unlikely many analyst will pull their long term growth forecasts that average 15.6%.

These levels of anticipated growth in blue chip stocks are eye-catching. The challenge for investors is that they can be hard to buy. Pull backs are relatively rare, and generally shallower. Some will baulk at paying $36 for Woodside, or $210 for CSL. Take it from a professional that thought CSL was “too expensive” at $30 and a “sell” at $66, they might be cheap.

*There are many further corollaries. When an investment delivers a much higher than expected return it’s a red flag. In an ideal world investors would revisit the investment to check that the risks were properly understood.  This practice is less popular than it should be.