That’s a good thing, since the economy generally grows more than it contracts. Higher prices raise average transaction values, which in turn generates more fees. UnitedHealth is one of the largest healthcare companies in the U.S., thanks to a string of acquisitions that have added depth and diversity to its operations. The company insures more than 51 million people and expects to add at least one million over the next year.
- Investing in blue-chip stocks is a great way to build a portfolio.
- The bank also has a sizable presence in the middle-market commercial space and boasts a large advisor network, which support its wide economic moat rating.
- We think Pfizer stock is worth $48 per share; the stock currently trades 20% below that.
- However, KO’s average return over the past decade is the worst on this list.
Normally, such companies have operated for many years, have dependable earnings, and usually pay dividends to investors. The Morningstar Style Box, meanwhile, is a nine-square grid that provides a graphical representation of the investment style of stocks, bonds, or funds. A stock is also classified as either small-cap, mid-cap, or large-cap based on its market capitalization. Berkshire Hathaway is by far the largest company by market cap on our list of the best blue-chip stocks to buy for the long term—and it’s also the only company on the list that doesn’t pay a dividend.
Visa has become more than the credit card provider though — it’s a multifaceted payments processing company with a wide range of products and an international footprint. Microsoft was formed by college computer wizards Bill Gates and Paul Allen back in 1972 and together they grew the company into one of the largest corporations in the history of business. Today, Microsoft’s market cap sits at a stunning $1.5 trillion, making it one of the 3 largest companies in the world. Microsoft produces many of the software staples we find on our computers like Windows, Office and Excel. Microsoft also produces hardware like the Xbox video game consoles and Surface tablets.
You can also buy a fund that tracks the S&P 500 or the Dow Jones Industrial Average since both include blue-chip stocks. The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Investors may also want to consider exchange-traded funds (ETFs) and mutual funds. Blue chip-focused ETFs and mutual funds bundle numerous blue chip stocks into a single security, offering a simple way to diversify across many high-quality stocks.
Best Online Stock Brokers for Beginners
Cisco Systems is the second tech stock on our list of blue-chip stocks for the long term. A dominant force in enterprise networking, Cisco is a leader in switching, routing, and wireless access that stands to benefit from trends toward hybrid work and hybrid cloud environments. While core markets offer slow and steady growth, newer software and cloud-centric businesses offer more upside for the company.
While blue chip stocks are slow to grow, they’re still a trusted addition to any portfolio. That’s because these companies are predicted to have a bright future, whether through new products or inventions. Think Apple’s VR headset and Watch or Nike’s collaborations and new shoe technology.
We take one sector or class, such as tech companies or consumer staples — and compare each company’s dividend yield, looking for higher ones. We also focus on picking companies with strong fundamentals, such as high return on equity (ROE), which can help protect your investment over time. They’ve repeatedly proven themselves to be reliable sources of revenue, whether markets are up, down or sideways. Furthermore, these stocks also offer attractively high dividend yields, and many are primed for growth in their respective industries thanks to new products or services they’ve rolled out, or plan to.
However, just about every investor can benefit from having a portion of their portfolio invested in blue chip stocks. It doesn’t have to be a set percentage; investors will have varying viewpoints about how much risk they want to assume. Beginning investors are likely familiar with the products and services of blue chip companies.
What is a blue chip stock?
Broadcom dedicates billions of dollars to research and development every year, so the importance of its products isn’t likely to fade anytime soon. Additionally, the company has not been shy about spending money, most-recently into more software products. In May of 2022, it reached a huge $61 billion deal to buy VMWare further expanding its reach into software to augment its core semiconductors business. As a result, Broadcom is one of the most profitable names in the semiconductor industry. With another billion people set to join the global consumer class over the next decade, Mastercard still has plenty of opportunities to expand its payment processing network. Along the way, it’s increased the cash it returns to shareholders by a dramatic amount.
- These financial products include credit cards, corporate cards, travel cards, premium cards, travel insurance and health insurance.
- It’s easy and instant diversification — at least, of course, among blue-chip companies.
- Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.
- Analysts praise the fact that CrowdStrike is continuing to gain market share.
- They typically manage downturns with a been-there, done-that pragmatism.
Whether you are new to investing or an experienced trader, this list of blue chip stocks will offer valuable insights into some of the most financially stable and promising companies in India. This article will provide you with an overview of the top blue chip stocks India, based on their financial performance, market trends, and expert analysis. To help you better understand where to place your money in the current market, we’ve compiled a list of the top blue-chip stocks to buy now. These stocks offer a strong combination of value, stability and potential upside in the long run.
Combining blue chip stock quality with dividends
We believe everyone should be able to make financial decisions with confidence. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Blue chip stocks are the stocks of well-known, high-quality companies that are industry leaders. These companies have stood the test of time and are respected by their customers and shareholders.
The table below lists 40 dividend-paying companies that are DJIA members or have a market cap of at least $200 billion. However, blue-chips are popular among investors, especially older or more risk-averse investors, because of their reliability. platforme de trading That doesn’t mean they’re immune to market downturns, but it does mean they’ve shown a history of weathering these storms and bouncing back. Explore the world of large-cap stocks and learn how these can shape your portfolio.
However, KO’s average return over the past decade is the worst on this list. Looking forward, the company is trading at a P/E ratio that is toward the top of its five-year range, meaning it does not stand out from a valuation perspective. In the company’s April 2023 Q1 results, PG revealed that, although it has seen rising input costs, it nonetheless boosted profit margins for the first time in more than two years. The company raised prices by close to 10%, which helped generate a 4.1% increase to net sales—all despite sales volume falling 3%. Investors may balk at this stock’s P/E ratio, especially given the size of the premium compared to rivals such as Target. However, this ratio was as high as 43.7 in October 2022, and above 50 the prior year, meaning the current mark could historically be considered low.
Diversification, as always, is key when investing, even if you’re investing in companies that are widely considered rock-solid. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.
It’s also below the five-year average, suggesting the stock is priced to buy right now. However, these companies have loyal consumers that are willing to seek out their brands at the expense of their competitors. So, join me on a journey to financial success and security, and discover the power of smart investing with We Invest Smart. Click the link below and we’ll https://bigbostrade.com/ send you MarketBeat’s guide to pot stock investing and which pot companies show the most promise. Driven by strong grocery sales and online spending, Walmart reported Q2 EPS of $1.84 versus $1.71 that was expected. Revenue in the April through June period totaled $161.63 billion compared to $160.27 billion that was the consensus expectation on Wall Street.
Another way for investors to gain exposure to blue chip stocks is through an index fund that benchmarks the Dow Jones Industrial Average (DJIA). With a deep understanding of market trends, investment strategies, and financial planning, I am committed to helping readers navigate the complex and ever-changing world of investments. From the latest updates on the stock market to insider tips on mutual funds and gold investments, I have you covered.
Blue Chip Stocks Have Something to Offer Every Investor
The company boasts an exceptionally strong balance sheet and management practices a disciplined M&A process that doesn’t overpay for growth. Honeywell stock is 12% undervalued relative to our $225 fair value estimate. Pfizer stock offers the highest trailing yield among our list of the best blue-chip stocks to buy for the long term. We don’t think the market fully appreciates the pharmaceutical giant’s ability to offset major patent losses over the next five years, argues Morningstar director Damien Conover. We’re most bullish on several near-term launches, including the respiratory syncytial virus vaccine and immunology drugs ritlecitinib and etrasimod, says Conover.
Blue chips have the size, financial strength and cash flow to pay dividends. Those dividends are a primary reason why these stocks deliver higher total returns in soft markets. Buy blue chip stocks if you are looking for safety and dividends or if you are a buy-and-hold-forever type of investor. The list should be diversified and include stocks you might want to buy. You can put together a watchlist of stocks on many stock news sites, including on MarketBeat.
What is the difference between blue chip stocks and penny stocks?
A generally accepted benchmark is a market capitalization of $10 billion, although market or sector leaders can be companies of all sizes. A blue chip company typically has a market capitalization in the billions. It’s generally the market leader or among the top three companies in its sector, and, more often than not, is a household name.
The company also has a low-risk profile, which makes it a good option for conservative investors looking for steady returns. Blue-chip stocks are also less likely to experience dramatic price fluctuations, making them a more conservative choice if you’re a long-term investor looking to preserve your capital. These stocks often pay dividends that can help generate additional income over time. By this measure, the US is significantly more expensive than eight other markets where I will list blue chip opportunities in this article, with only India averaging more expensive equities than the US. This picture tells me, at a high level, that the odds seem in my favor for picking a top name like Samsung from a cheaper market like Korea, versus picking AAPL from an expensive market like the US. While blue chip stocks are appropriate for use as core holdings within a larger portfolio, they generally shouldn’t be the entire portfolio.
Its return on equity of 12.01% indicates a strong use of shareholder capital, and its solid debt-to-equity ratio of 1.12 suggests it can cover its short-term debts. As one of the largest banks in the United States, Bank of America has a diverse portfolio of services and customers, making it less risky than banks more heavily dependent on one region. Verizon, while its 5G coverage only covers around 12.77% of the country, has been working hard to expand it, which will likely drive growth in the future as more consumers and businesses adopt it.
Wells Fargo stock trades 29% below our fair value estimate of $58. NextEra’s share price has appreciated by triple-digit percentages over the past 10 years, among the best results of any utility company. One of the most powerful and recognizable brands in the world, Nike has been a blue chip stock for decades. Clothing bearing the Nike “swoosh” logo is sought after by consumers around the globe. With the global middle class growing rapidly, Nike is the elite brand in athletic footwear and apparel.
Invest For The Long-Term With Blue Chip Stocks
The 21% decline at the start of the Covid-19 pandemic—one of its steepest declines from the past decade—was the smallest of the companies included on our list. In April, it announced its 61st consecutive increase to the quarterly dividend. Johnson & Johnson is one of the largest healthcare stocks in the world, developing medical devices, pharmaceuticals and consumer packaged goods. Hello, I am Raj an investor in Stock Market, Mutual Funds, Gold, PPF, FD instruments since 2005. I have a passion for helping others make sound and profitable investment decisions. However, it’s important to do your own research and analysis before making any investment decisions.