19 Blue-Chip Stocks to Explore

He particularly enjoys creating model portfolios that stand the test of time. Not only is it revising some of its oldest brands, but it’s streamlining its business to compete more effectively with other consumer packaged foods companies. There will be one-fifth of the products and fewer divisions, saving the company more than $2 billion in the process. Sometimes it’s hard to know why investors run from a particular stock. In the case of Starbucks, investors seem to be concerned about the speed of recovery for some of its international markets. Starbucks comes with a dividend yield that’s only slightly higher than the average dividend yield for the S&P 500–and that’s okay.

Let’s take a few minutes to dig into blue chip stocks to determine if they suit your portfolio. Blue chips are considered good investments because they are financially stable, have consistent growth and dividends and maintain a strong market presence. They are less risky than smaller companies and can withstand economic downturns.

What makes a stock a blue chip?

Higher interest rates charged on home mortgages continue to cool the housing market, said Lennar in its earnings print. Federal Reserve signaled three interest rate cuts in 2024, which should lower mortgage rates in the year ahead. The average 30-year fixed rate mortgage in the U.S. fell https://forex-world.net/software-development/top-web-design-and-development-consulting/ below 7% recently, dropping to 6.95%, its lowest level in months. Lennar said its new orders rose 32% from a year earlier in the latest quarter, while deliveries were up 19%. Once upon a time, Kraft Heinz’s stock was struggling and investors wondered if its best days were behind it.

The term blue chip originated from poker and was later used in finance to describe reliable and stable stocks or companies with a history of consistent performance. It has become synonymous with top-tier, well-established companies https://day-trading.info/popular-penny-stocks-on-robinhood/ in the stock market. While blue chip companies can be reliable, that also comes with slower growth. This feature makes them a conservative option for investors looking for a safe bet for an already established portfolio.

List of Recommended Blue Chip Investments

They have highly experienced and disciplined leaders who know what levers they can pull to address changing conditions. Blue-chip stocks are premium quality equities—large, mature companies with a reputation for stable growth and consistent shareholder returns. They’re often the safest and most predictable assets you can buy on a stock exchange. Verizon is one of the largest wireless carriers in the country.

• Here’s a bit more on each of these blue-chip stocks for the long term, as of September 15.
• Look for firms demonstrating market leadership, innovation and long-term growth potential.
• Those dividends are a primary reason why these stocks deliver higher total returns in soft markets.
• No one type of stock should make up the bulk of your portfolio.
• It has about 95,000 employees and serves customers in more than 200 countries.

However, blue-chip investments are not without their list of considerations. While offering stability, these stocks might limit capital appreciation and susceptibility to economic downturns. In combining blue-chip stocks with other investment options, a balanced portfolio strategy ensures resilience and optimal returns across market fluctuations. The only packaged foods maker on our list of the top blue chip companies to buy, Nestle stock trades 10% below our fair value estimate of $131. The largest food and beverage manufacturer in the world by sales, the company’s famous brands include its namesake, Nescafe, Perrier, and Purina, among others. The second undervalued technology company on our list of the best blue chip stocks to buy, ASML stock trades 20% below our fair value estimate.

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A change in the fundamental factors underlying the Morningstar Medalist Rating can mean that the rating is subsequently no longer accurate. 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. The bank also has a sizable presence in the middle-market commercial space and boasts a large adviser network, and these factors support its wide economic moat rating.

You can buy blue chip stocks as individual stocks or through funds that contain tens or hundreds of stocks. Investing in individual shares of blue chip stocks comes with greater risk than investing in diversified mutual funds and exchange-traded funds (ETFs). Forbes Advisor has surveyed the stock market to pick the best blue chip stocks. We have focused on large-cap equities that have a long-term record growing profits and dividends, plus a reasonable valuation. Blue chip stocks are the cornerstone of buy-and-hold portfolios. Blue-chip stocks tend to outperform where stability and consistent dividends are paramount.

About Jeffrey Neal Johnson

While blue chips can be more resilient in downturns, they don’t have the growth potential of smaller companies. Blue-chip stocks aren’t as volatile as smaller, younger companies. They typically manage downturns with a been-there, done-that pragmatism. Many have been operating for decades and have powered through all types of financial market and economic crises.

• Dividends are a more definite and predictable source of return than stock price appreciation.
• Costco’s revenue was $57.80 billion, which aligned with expectations.
• These companies have stood the test of time and are respected by their customers and shareholders.
• 3M’s commitment to developing innovative products has led to a portfolio of more than 100,000 patents.
• The company reported earnings of $15 million and earnings-per-share of $0.04 compared with earnings of $292 million and earnings-per-share of $0.84 in the prior year.

Apple, Berkshire Hathaway, Coca-Cola, Johnson & Johnson, and American Express are all blue chip stocks with operations primarily based in the U.S. However, just about every investor can benefit https://bigbostrade.com/education-therapy-for-control-issues-html/ 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.