What is considered a blue chip stock?
To be considered a blue chip, a company must be well-known, well-established, and well-capitalized. Blue chip companies must have been in business long enough to have weathered many different economic situations, showing that they can remain stable and profitable as circ*mstances around them change.
Blue chip stocks are the stocks of dependable, profitable companies that have stood the test of time. Investing in high-quality blue chip companies can be a way to strengthen your stock portfolio. Apple, Berkshire Hathaway, Coca-Cola, Johnson & Johnson, and American Express stand out as top blue chip stocks.
A blue chip stock is stock issued by a large, well-established, financially-sound company with an excellent reputation. Normally, such companies have operated for many years, have dependable earnings, and usually pay dividends to investors.
blue chip stock. Stock in a corporation with a national reputation for quality, reliability, and the ability to operate profitably . Dividends. A sum of money paid regularly by a company to its shareholders out of its profits.
"Blue chip" is an informal term for the most reliable and valuable companies on the market. These are usually companies with a long track record of financial stability. They are usually leaders within their industry. For that reason, they are often sought after and considered low-risk investments.
Anchored by core Google properties and its $150 billion stockpile, Alphabet has the stability and vision to drive transformational growth, which is why it's on this list of stable blue-chip stocks. While ad revenue missed last quarter, Alphabet's Q4 sales still rose 13% year-over-year to $86 billion.
Apple, AB InBev, and Johnson & Johnson may be the blue-chip stocks you have been looking to buy and hold to add that extra stability to your portfolio. AAPL, BUD and JNJ are three blue-chip stocks to buy and hold as they emerge as a beacon of stability in the wake of recent financial turbulence.
Amazon (NASDAQ:AMZN) is a blue chip stock best-known for its e-commerce Marketplace and its cloud computing business. Those two segments continue to be the primary drivers of the company. Their strength is the primary reason it has become a blue chip stock.
What do IBM, Walmart, JPMorgan Chase, and DuPont have in common? Although they are in different sectors, they are all known as blue chip companies. Blue chip companies are the mature firms that represent the stalwarts of an industry.
There is no official list of blue chip stocks. However, generally speaking, investors consider a member of the Dow Jones Industrial Average to be among the bluest of the blue chips. There are 30 blue chip stocks using this strict measure, since there are 30 companies in the Dow Jones.
What is the difference between a regular stock and a blue chip stock?
Blue-chip stocks have a large (more than $10 billion) to mega (more than $200 billion) market capitalization. Blue-chip stocks often possess a wide economic moat, a history of profitability and steady earnings growth.
Features of blue-chip stocks
Stability: Blue-chip stocks are known for their stability and resilience in the face of market fluctuations. These companies have a proven ability to withstand economic challenges and maintain their profitability over the long term.
They're generally well-established, long-running companies that have proven their stability and steady growth over some time. The term was first coined in the 1920s by Oliver Gingold, who worked for Dow Jones, and is a reference to poker chips—wherein blue chips hold the highest value.
The problem is that despite being included in blue chip ETF indexes, companies like Nvidia and Tesla aren't truly blue chip stocks, George Pearkes, an analyst at Bespoke, told CNN. They're much more volatile. Tesla, for example, is down about 23% so far this year.
Some of the better-known companies in the DJIA that are mostly considered to be blue-chip stocks include: Apple, Boeing, Caterpillar, Coca-Cola, IBM, Goldman Sachs, Exxon Mobil, Intel, McDonald's, Microsoft, Nike, Visa, Walmart, Walt Disney.
Like McDonald's, soft drink maker Coca-Cola (NYSE:KO) is a steady name among blue-chip stocks to buy any hold.
Netflix (NFLX)
Streaming giant Netflix (NASDAQ:NFLX) is another option in reliable blue-chip stocks. The company has had a tough ride but it has survived through it all.
Blue-Chip Stocks to Buy: McDonald's (MCD)
The Golden Arches is as blue-chip as stocks come. The hamburger and restaurant chain has been a reliable performer for decades, trades at a reasonable 24 times future earnings estimates, and pays a quarterly dividend that yields a strong 2.40%.
Costco Wholesale (NASDAQ:COST) stock continues to be one of the best blue-chip stocks investors can buy and remains the gold standard of the retail sector.
Home Depot: Headquartered in Atlanta, GA, this company stands as another distinguished blue-chip stock, dominating the home improvement retail sector.
Is Verizon a blue-chip?
So, as the investment climate in the stock market appears to be cautiously improving, we decided to take a look at some cheap blue chip stocks to buy with the notable picks being Verizon Communications Inc. (NYSE:VZ), Walgreens Boots Alliance, Inc. (NASDAQ:WBA), and The Goldman Sachs Group, Inc. (NYSE:GS).
FedEx (FDX)
FedEx (NYSE:FDX) remains a best-in-class blue-chip shipping stock, recovering nicely from its 2022 lows to gain 47% this year.
As one of the largest sports apparel and footwear businesses on the face of the planet, Nike (NYSE: NKE) is well-known not only among customers worldwide but within the investment community as well. Regarded as a blue chip stock, Nike is even included in the Dow Jones Industrial Average.
Pfizer (NYSE:PFE) is another blue-chip stock that has witnessed a deep correction in the last few quarters. This has been behind growth concerns as COVID-19 vaccine revenues decline.
It is easy to spot the blue-chip starlets: Amazon, Apple, Berkshire Hathaway, Coca-Cola, Microsoft, Starbucks, etc.
