Reliance Industries is one of the largest companies in India and is a leader in the oil and gas, petrochemicals, and telecommunications industries. Click here to instantly download your free spreadsheet of all 350+ Blue Chip Stocks now, along with important investing metrics. Gordon Scott has been an active investor and technical analyst or 20+ years. In a world that’s increasingly shifting to online shopping, that’s a big reason to be bullish.
A dividend payment is a way for shareholders to “collect rent” on the shares they own. Older investors may choose to focus more on capital preservation by putting a larger percentage of their investments in bonds and cash. The blue chip stocks’ attractive risk-reward profiles make them among the most popular for conservative investors. But even more risk-tolerant investors should consider buying blue chip stocks to diversify their portfolios better and provide stability during turbulent stock market conditions. They don’t offer the meteoric growth of a hot startup or today’s most popular cryptocurrency, but instead give your portfolio steady returns over periods of time measured in decades. Like their poker namesake, blue chip stocks might just be the best investments in the game.
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While explosive growth stocks can generate life-changing gains during bull markets, they often face existential risk during downturns or crises. That’s why even growth-focused investors should allocate a portion of their portfolio to dependable blue-chip stocks. At the same time, you may not want to invest in certain types of blue chip stocks that might be in the midst of a downturn. For example, what if a blue chip business is about to be phased out of the market because its technology is derived from a bygone day? You need to be on the lookout for these things so that you can easily make wise choices. Visa has met or beaten earnings expectations for 4 straight quarters and has seen both profit and revenue growth in each of the last 5 years.
Despite some pandemic-related volatility, Clorox has compounded its dividend at a 6.3% annual rate over the past five years. Its balance sheet remains rock-solid with $367 million of cash against less than $3 billion of debt. While supply chain constraints impacted recent results, management is working to improve operations and its financial ratios over time. Lockheed has been investing in innovation, which will ensure long-term growth. The company has been investing in next-generation defense technology like hypersonics. Recently, the company was selected to develop nuclear-powered spacecraft.
And this combination provides a smoothing effect for portfolios. These stocks may not outperform pure growth stocks during robust bull markets, but they are also likely to be among your “less bad” performers during market corrections. However, the “price” that investors pay for that stability is muted (but not nonexistent) organic growth.
Best Blue-Chip Stocks to Buy: JP Morgan Chase (JPM)
Clearly, the cloud business growth has remained strong, contributing nearly 50% of total revenue. The cloud business is likely to ensure that top-line growth remains robust. MSFT stock is also among those blue-chip stocks that witnessed advantage of micr a strong rally in 2021. However, with strong business momentum, the stock is likely to remain in an uptrend. First, electric vehicle adoption is still at an early stage in most parts of the world, with immense scope for revenue growth.
You can also begin to establish your portfolio using these same assets, especially if you have enough money to invest in something that’s a bit more expensive. While you don’t want to overspend, you also want to hold onto assets that are more appropriate for you. Blue chip is a nickname given to stocks of a well-established and trusted company. These are companies that investors rely on due to their credibility and reliability. These large-cap stocks often have a market valuation of $10 billion or more. You can invest in blue chip stocks through a stock brokerage such as Fidelity or Charles Schwab.
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With rising pricing power, an excellent balance sheet, and a recession-resistant mix of staple food and beverages, PepsiCo appears poised to deliver stability during rocky markets. The stock provides investors with a quality option at a reasonable valuation. I find it hard to justify leaving PEP stock out of any blue-chip portfolio, no matter how obvious of a pick it may be.
This is a great option for investors who don’t want to purchase individual stocks or simply want a more set it and forget it option for this percentage of their portfolio. Blue-chip stocks are good stocks to invest in but may only be right for some portfolios. Blue chip stocks India can be a good investment option for investors who are looking for stable returns and long-term growth. Choosing blue chip stocks in India for your portfolio can be a daunting task, especially if you are new to investing. However, there are certain factors that you can consider to help you make an informed decision.
With a reasonable 25-times price-earnings ratio and a 2.2% dividend yield, the stock looks poised to satisfy investors’ hunger for stability. Despite near-term macro concerns, Honeywell’s leadership sees strength ahead. Commercial flight activity continues to recover, fueling aerospace demand. Energy, non-residential https://1investing.in/ construction, and pent-up infrastructure investment provide additional tailwinds. The company’s defensive attributes combined with its upside potential check all the blue-chip boxes. Many investors are currently seeking safe harbor, given the economic uncertainty and volatility in the market.
Meanwhile, priority areas like cybersecurity, artificial intelligence, and modernizing IT infrastructure necessitate Booz Allen’s expertise. The company’s top line expanded by 18% year-over-year to $2.65 billion, in the latest reported quarter. Year-end sales growth is estimated to be above 11.4%, and I believe this is excellent growth for a company of this size. However, even with no acquisition, the company has a strong asset base for stable production into the 2040s.
In our current bull-run, speculative meme stocks have also been in focus. However, even a high-risk portfolio needs to have some exposure to blue-chip stocks. Lastly, the Morningstar Capital Allocation Rating is an assessment of how well a company manages its balance sheet investments and shareholders’ distributions. Analysts assign each company one of three ratings—exemplary, standard, or poor—based on their assessments of how well a management team provides shareholder returns.
Are blue-chip stocks a good investment?
Key states include Washington, Oregon, and Arizona, which account for nearly 80% of loans. Profits are derived mostly from interest sources, as non-interest income makes up only about 9% of net revenue. On May 1st, 2023, Sonoco Products reported first quarter results for the period ending March 31st, 2023. For the quarter, revenue was down 2.3% to $1.73 billion, which was $110 million lower than expected. Adjusted earnings-per-share of $1.40 compared unfavorably to $1.85 in the prior year, but was $0.08 above estimates. For the year-to-date period, the company’s GAAP diluted EPS was $(4.02), while the adjusted diluted EPS was $2.82.
Remember, not all blue chip stocks are the same, but they have underlying characteristics that make them easy to spot. 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.
What makes a stock a blue chip?
The second bank on our list of the best blue-chip stocks to buy, Wells Fargo has taken it on the chin as the banking crisis has unfolded. But Wells Fargo isn’t a regional bank; in fact, it remains one of the top deposit gatherers in the U.S. The bank beat first-quarter estimates, and deposits slipped modestly. 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. Wells Fargo stock trades 29% below our fair value estimate of $58. Investors also appreciate the dividends blue-chip stocks typically pay.
Over the past five years, TSCO stock has grown by nearly 150%, driven by consistently high profit growth. Likewise, its dividend per share has grown at a 25.8% annualized pace over the past half-decade. In today’s late-cycle environment, I believe doubling down on quality is prudent. While I don’t anticipate a recession hitting imminently, this economic expansion has been historically elongated. And with markets jittery, valuations compressed, and volatility persisting, blue chips provide ballast. This provides ample flexibility for robust dividends, share repurchase, and aggressive investments.
The mega-cap definition of blue chips, on the other hand, is more concrete. It also opens the door to large dividend-payers that aren’t in the DJIA. It also excludes DJIA companies that don’t pay dividends, of which there are currently three.
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However, blue-chips are popular among investors, especially older or more risk-averse investors, because of their reliability. 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. No one type of stock should make up the bulk of your portfolio.
- The Coca-Cola Company has paid dividends to investors for over 120 years, since 1893.
- It will have turned in a steady return and typically paid dividends year in and year out.
- Blue chips have the size, financial strength and cash flow to pay dividends.
- The mega-cap definition of blue chips, on the other hand, is more concrete.
With that said, blue-chip stocks deserve a place in every portfolio. In this article, we’ll explain why there’s never a bad time for investors to buy the blue chips. 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. Blue chip stocks India are considered to be the most reliable and stable stocks in the Indian stock market. These stocks are issued by large, well-established companies with a long history of financial stability and growth.