Although blue-chip stocks have been proving their relative stability over decades, it’s crucial to have a diversified portfolio with more than one type of stock. Even with a list of the largest companies you consider rock-solid, you shouldn’t invest exclusively in their individual stocks to make up the bulk of your portfolio. Blue-chip stocks are high quality stocks of giant companies that can boast an immaculate reputation they have been earning for years. The main distinctive features of such business entities are financial stability, a well-designed infrastructure, steady earnings reports, and a solid history of sustained growth. In this article, we share the fullest information on blue-chip stocks and provide the reasons why these blue chip stocks never lose their popularity.
No matter what type of stock you are purchasing, always research the company first by looking at historical stock prices, earnings reports, and dividend payments. There is no need to be an expert to invest in blue chip stocks. You can buy blue chip stocks from the brokerage firm of your choice. While brokerages differ in the small-cap investments they hold, you should be able to find blue chip stocks with any major brokerage.
The Walt Disney Company (NYSE:DIS)
These stocks seemed to be a default pick for almost all investors. The stock market is a wide topic, hence the views of even experts vary about it. But they all seem to agree on the reliability of blue chip companies. Anybody who wants to receive steady dividends should look into blue chip stocks. As discussed above, many blue chip stocks tend to have steady earnings growth and pay dividends, making them a favorite on Wall Street and Main Street alike.
Mastercard is an American multinational financial services corporation that was founded in 1966. The company operates a global payment system that enables businesses and consumers to make electronic transactions. Mastercard’s products and services include credit cards, debit cards, and prepaid cards. The company is considered one of the leading payment processors in the world and its brand is widely recognised globally. Apple also earns recurring revenue through its services, which include its iTunes, App Store, and streaming television businesses.
Characteristics of Blue Chip Stocks
This blue chip stock should provide some exposure to the emerging trend of on-demand entertainment. You might bank those steady dividends now by reinvesting them back into the stock for a later date when you might need the money. Blue chip companies have typically been around for decades and have already survived stock market downturns.
Is Netflix a blue-chip company?
Plus, they're titans of their respective industries. On the other hand, companies like Netflix and Tesla are generally not considered blue chips. They are large and wildly popular stocks, but they aren't the biggest players in their respective industries, nor do they have an established record of profitability.
We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy. Riley Adams is a licensed CPA who worked at Google as a Senior Financial Analyst overseeing advertising incentive programs for the company’s largest advertising partners and agencies. Previously, he worked as a utility regulatory strategy analyst at Entergy Corporation for six years in New Orleans.
For that reason, they are often sought after and considered low-risk investments. The easiest way to identify blue-chip companies is to look into the constituents of Sensex or Nifty-50. We can also refer to a list of the highest market capitalization stocks and treat them as blue chips. Since they are generally large companies, blue chip stocks tend to be stable, so most people purchase them intending to hold them for a long period of time.
- Despite the uncertainty, some leading blue chips with competitive advantages are trading for pretty attractive valuations given the decline in the market over the past few years.
- Thanks to its consistent earnings growth record, FLIC has raised its dividend for 45 consecutive years.
- Ongoing earnings growth should lead to additional increases in future years.
- The increase in net interest income was primarily due to an increase in the interest rate spread of 28 basis points.
If valuations in the broader market decreases, the valuations of many blue chips could decrease too. Zions Bancorporation is a bank holding company that operates full-service banking offices in 11 western states in the U.S. The company also offers a range of investment, mortgage, insurance, and electronic commerce services.
Blue Chip Meaning and Examples
However, UL currently trades near its five-year low, which presents risks. However, those that want to speculate on underappreciated blue-chip stocks to buy may consider Unilever. For instance, Gurufocus.com’s proprietary calculations Blue chip stock list for fair market value (FMV) identify UL as modestly undervalued. Operationally, Unilever enjoys a very strong net margin of 12.74%. This ranks much higher than the consumer staple sector’s average yield of 1.89%.
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Best Blue Chip Stocks
They represent the crème de la crème of equities — the biggest, richest companies. A blue chip is a nationally or internationally recognized, well-established, and financially sound company that is publicly traded. Blue chips generally sell high-quality, https://investmentsanalysis.info/ widely accepted products and services. Investors can purchase blue-chip stocks individually or through various mutual funds. The Dow Jones Industrial Average tracks the price of 30 of the largest blue-chip stocks listed on U.S. stock exchanges.
- As previously noted, blue chip stocks typically pay consistent and steady dividends to their investors.
- As discussed above, many blue chip stocks tend to have steady earnings growth and pay dividends, making them a favorite on Wall Street and Main Street alike.
- You can purchase stocks individually through a brokerage firm or buy a basket of stocks by investing in mutual funds or ETFs.
- Earnings do not cover its dividend, as the company is poised to incur losses this year.
- Blue chips don’t often experience negative, fundamental changes that would inspire investors to sell immediately.
What are the best blue chip stocks in Europe?
What are the top 10 European blue chip stocks? The top 10 European blue chip stocks based purely on market cap are LVMH, SAP, L'Oreal, ASML Holding, Unilever, Sanofi, Linde , Siemens, Anheurser-Bush InBev and Total SA.