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Money has asked five leading share analysts to nominate five shares each.

The picks have to be suitable for conservative investors who intend to invest for the long term.

Naturally, those requirements lead to the larger companies that tend to pay higher dividends than other companies and often, but not always, have high levels of franking credits.

With interest rates at a 50-year low, investors have been chasing yield on the sharemarket.

As a consequence, share prices of the big dividend payers, such as most of the big banks and Telstra, have, until recently, risen strongly over the past two years.

Much of the sell-off on the Australian sharemarket over the past few weeks has simply followed selling on Wall Street.

After the very strong gains on the US sharemarket there was always a sense that a pull-back is overdue. Michael McCarthy, chief market strategist for CMC Markets in Australia, is not overly concerned.

"The global outlook remains modestly positive as does the outlook for Australia," he says. "I stress the word 'modest' as we are definitely nowhere near boom times."

McCarthy prefers quality stocks, as the No. 1 rule of long-term investing is preserving capital and investors need high assurance that a business is going to survive.

He likes businesses with high barriers to entry, of which the big banks are prime examples. He has picked his five stocks with an eye to creating a balanced portfolio – stocks from various industry sectors.

Among the big banks his preferred pick is ANZ.  He likes the bank's "pipeline it has built into Asia" which, he says, is not yet reflected in the ANZ share price.

Peter Warnes, head of equities research at Morningstar, likes ANZ, also for its Asian strategy that differentiates it from the other big banks. "Asia is still the growth engine of the world," he says.

Resources

Four of the five analysts have included BHP Billiton in their top five picks.

Despite the current economic turbulence, BHP has been able to maintain a robust balance sheet and free cash flow from operations to support its future development plans, says Greg Smith, the head of research at Fat Prophets.

The world's largest diversified miner is also a well diversified geographically, says McCarthy. "It has huge cash flows with a very strong balance sheet."

The fall in the iron ore price of about 45 per cent from peak last year does not unduly worry analysts. Smith says suggestions that the "age of iron ore" is over are premature.

The miners' shares are on a cash yield of about 4 per cent, fully franked, with a progressive dividend policy; meaning that the dividend is increased very year.

Analysts are positive on the demerger, where a separate listed company, NewCo, will be spun off that will hold BHP's metals assets, with some coal assets.

BHP Billiton will retain the large, long-life iron ore, copper, coal, petroleum and potash assets. BHP Billiton is "definitely one I would like to have in my portfolio for the long term at current share prices", McCarthy says.

BHP has a pile of franking credits. Warnes says the company has to the potential to hand back up to $30 billion to shareholders over the next three or four years.

Funds management

Two analysts include fund manager Magellan Financial in their picks. Kunal Sawhney, chief executive of equities researcher Kalkine, says the fund manager has a record of investment outperformance that supports the case of further growth in funds under management.

Magellan's flagship Global Fund is a top-performing international share fund. Sydney-based Magellan was established by Hamish Douglass and Chris Mackay in 2006.

"Magellan does not focus on short-term performance instead focuses on high-quality stocks likely to produce long-term performance throughout the business cycle, Sawhney says.

Analysts like that the better-performing fund managers are supported by Australia's compulsory superannuation system.

Large super funds have to invest some of their members' money into global shares and self managed superannuation fund trustees are also seeking out global share fund managers with proven performance records.

Chris Batchelor is expecting Magellan's strong earnings growth of the past several years to continue. He has Magellan shares on a forecast dividend yield of almost 4 per cent, fully franked.

Batchelor also likes Platinum Asset Management, the global shares specialist fund manager, for the same reasons.

One key difference with Magellan is that Platinum can "short" stocks, which is way of making money on shares when its prices goes down.

Batchelor says this stood Platinum in good stead during the GFC and the fund manager can better minimise the impact of down markets. Its shares are on a dividend yield of 5.6 per cent, fully franked.

"Like Magellan, Platinum has low capital requirements, meaning it can operate with minimal equity and no debt," Batchelor says.

Other picks

Batchelor also likes Greencross, which owns a string of veterinary clinics and pet retail stores across most of Australia.

"We continue to like the growth story at Greencross with the company well positioned as a key aggregator in the pet-care industry," Batchelor says.

It has a strong track record of successfully integrating acquisitions. Australia has one of the higher rates of "pet spend" in the world, he says. "And this is increasing at a steady clip."

Batchelor also likes Nick Scali, the furniture retailer. "It is extremely well managed, though good times and bad.  It generates high levels of cash and cash balances far exceed debt," he says. It shares are yielding almost 5 per cent, fully ranked and has excellent earnings growth forecast.

Smith likes Spark New Zealand, the duel-listed (Australia and New Zealand) telecommunications company with operations in New Zealand.

Spark, formally Telecom New Zealand, is one of that country's largest listed companies. It has successfully offset the fall in voice revenues with revenues from mobile and data services, Smith says.

It is also improving its bottom line through cost reductions. Investment in "new wave" areas, such as cloud computing and internet TV should generate earnings gains, Smith says. The company's shares have a 6 per cent dividend yield.

Ignore market noise

Long-term investors who buy shares in quality businesses can afford to mostly ignore the gyrations of the market.

As long as the quality companies are bought on their fundamentals; that market noise is ignored and fads and trends are avoided the rest should take care of itself. Sure, the market is now going through a rough patch but remember that Australian shares, including dividends, have had two bumper calendar years, returning more 20 per cent in each of 2012 and 2013.

The weaker Australian dollar has prompted some overseas investors to sell Australian shares and take profits.

Share prices are basically back to where they were at the start of this year. Analysts say the pull-back on the Australian sharemarket during the past several weeks is more likely to be a correction rather than the beginning of a bear market.

Even though share prices have risen strongly since the depths of the GFC, at about 5200 points, they are still well below their all-time high of about 6800 points reached on November 1, 2007.

Analysts say the valuation of the Australian sharemarket, as a whole, is far from stretched.

The consensus view of economists is that the  Australian economy may remain below trend growth for the next 12 months, unless the Australian dollar drops a lot further, helping export sectors such as resources, tourism and education.

EXPERT PICKS

Chris Batchelor, Skaffold

• Telstra (TLS). Telecommunications. "High levels of cash which provides for investment, dividends and buybacks"
• Flight Centre (FLT). Sales of international and domestic travel. "Significant opportunities with overseas operations"
• Magellan Financial Group (MFG). Funds management. "Strong earnings growth for last five years and forecast to continue for next three"
• Platinum Asset Management (PTM). Funds management. "Benefits from the same industry dynamics as Magellan"
• Nick Scali (NCK). Furniture retailing. "Outstanding long-term performance"

Greg Smith, Fat Prophets

• Qantas (QAN). Airline. "Set for some clearer air… after a fair degree of turbulence"
• Greencross (GXL). Pet veterinary care. "Pet spend … is increasing at a steady clip"
• Spark New Zealand (SPK). Telecommunications. "Has successfully combated attrition in voice revenue through mobile and data services growth"
• Suncorp (SUN). Banking  "Made solid progress … on regaining investor confidence"
• BHP Billiton (BHP). Mining.  "Has been able to maintain a robust balance sheet"

Peter Warnes, Morningstar

• ANZ (ANZ). Banking. "We like the Asian strategy as it differentiates it from the other banks"
• Westfield Corp (WFD). Shopping centres in major cities around the world.  "Gives exposure to iconic brand and iconic shopping centre"
• Crown Resorts (CWN). Casino and gaming.  "Has a stranglehold on gaming and defensive earnings stream"
• BHP Billiton (BHP). Mining. "Over the next three or four nest 3 or 4 years it could hand back up to $30 billion of capital to shareholders"
• Woodside (WPL). Gas and oil.  "First-mover advantage on liquefied natural gas (LNG) and a very good long-term holding"

Kunal Sawhney, Kalkine

• Seven West Media (SWM). Media. "The eminent multi-platform media business"
• Skilled Group (SKE). Contract labour services. "Promising results achieved for acquisitions"
• Scentre Group (SCG). Owner and operator of Westfield in Australasia. "Its shopping malls enjoy a dominant position in Australia and New Zealand"
• BHP Billiton. (BHP). Mining.  "Creates long-term shareholder value though discovery, acquisition, development and marketing"
• Magellan Financial Group (MFG). Funds management. "Strong growth in funds under management"

Michael McCarthy, CMC Markets

• ANZ (ANZ). Banking. "Chosen for its exposure to Asian markets"
• BHP Billiton (BHP). Diversified mining. "Terrifically diversified portfolio of commodities"
• CSL (CSL). Pharmaceutical and diagnostic products. "A company built around innovation"
• Oil Search (OSH). Oil and gas. "A major partner if the PNG liquefied natural gas project"
• Wesfarmers (WES). Diverse business operations. "Diversified with retail exposure"