What are blue chips in stock?
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.
Income stocks provide regular income by distributing a company's profits, or excess cash, through dividends that are higher than the market average. Blue-chip stocks are shares of well-established companies with a large market capitalization.
Potential Risks and Considerations
The value of their stock may fall during severe economic downturns. fluctuations in Interest Rates: Blue Chip stocks are susceptible to fluctuations in interest rates, which can effect borrowing costs and profitability.
Every portfolio should include blue chip stocks. Such shares tend to be highly immune to market downturns, though not invincible. The household names these stocks represent tend to hold value through thick and thin and grow over time.
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.
Company (Ticker) | Sector | Market Cap |
---|---|---|
Nvidia Corp. (NVDA) | Technology | $2.26T |
JPMorgan Chase & Co. (JPM) | Financial | $576.94B |
Salesforce (CRM) | Technology | $292.14B |
Caterpillar (CAT) | Industrials | $182.99B |
Because blue chip companies are relatively stable, blue chip stocks are considered a low-risk investment. In all likelihood, no matter what happens tomorrow, the most established companies in the banking or real estate sector would not collapse overnight, so investing in them is a relatively safe bet.
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.
The Dow Index – popularly known as Wall Street's blue-chip index – has a new look since the beginning of trading on Feb 26. The restructuring of the 30-stock index resulted in the exit of medical-retailer Walgreens Boots Alliance and the entry of the e-commerce super giant Amazon.com Inc. AMZN.
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.
Which stock will boom in 2024?
S.No. | Company | Industry/Sector |
---|---|---|
1. | Tata Consultancy Services Ltd | IT - Software |
2. | Infosys Ltd | IT - Software |
3. | Hindustan Unilever Ltd | FMCG |
4. | Reliance Industries Ltd | Refineries |
As a small example, Costco Wholesale (NASDAQ:COST) has trended higher by 226% (capital gains) in the last five years. This has led to this list of blue-chip stocks under $20.
![What are blue chips in stock? (2024)](https://i.ytimg.com/vi/74wu3yPTOEI/hq720.jpg?sqp=-oaymwEcCNAFEJQDSFXyq4qpAw4IARUAAIhCGAFwAcABBg==&rs=AOn4CLBQKGca3MtaRm1o56ginZViCRzhtw)
- Walt Disney Co. (DIS)
- PDD Holdings Inc. (PDD)
- Occidental Petroleum Corp. (OXY)
- Match Group Inc. (MTCH)
- Grupo Aeroportuario del Sureste SAB de CV (ASR)
- Target Corp. (TGT)
- Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ)
- Citigroup Inc. (C)
Name | Symbol | % Loss |
---|---|---|
Bajaj Finance | BAJFINANCE | -10.37 |
Zee Entertainment Enterprises Ltd. | ZEEL | -8.51 |
Bajaj Finserv Ltd. | BAJAJFINSV | -6.82 |
Godrej Consumer Products Ltd. | GODREJCP | -6.41 |
- Broadcom Inc. (NASDAQ:AVGO)
- Eli Lilly and Company (NYSE:LLY)
- JPMorgan Chase & Co. (NYSE:JPM)
- Berkshire Hathaway Inc. (NYSE:BRK-B)
- Apple Inc. (NASDAQ:AAPL)
- Visa Inc. (NYSE:V)
- Alphabet Inc. (NASDAQ:GOOG)
This Zacks Rank #3 (Hold) stock has a trailing four-quarter earnings surprise of 7.3%, on average. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Home Depot: Headquartered in Atlanta, GA, HD stands as another distinguished blue-chip stock, dominating the home improvement retail sector.
In general, the average rate of return on blue-chip stocks is around 10%, which is similar to the indices that they are featured on. A good indicator of blue-chip status is if the company is listed on a renowned stock index.
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.
How do I invest in blue-chip stock? You can purchase blue-chip stocks through online brokerage firms or gain access to them through blue-chip funds. Given the high price-tag per share for some blue-chip stocks, some investors are opting to buy into these companies through fractional trading offerings.
How do you know if a stock is blue-chip?
Stocks that are considered blue-chip stocks generally have these things in common: Large market capitalization. Market cap is a measure of the size and value of a company. Blue-chip stocks are often large-cap stocks, which typically means they have a market valuation of $10 billion or more.
It may make sense to sell the stock as soon as the technical level is breached on the downside. If a stock breaks through a key resistance level on the upside, it may signal more gains and a higher trading range for the stock, which means it's advisable to sell part of the position rather than all of it.
The highest analyst price target is $230.00 ,the lowest forecast is $175.00. The average price target represents 13.33% Increase from the current price of $185.07. Amazon's analyst rating consensus is a Strong Buy. This is based on the ratings of 41 Wall Streets Analysts.
Costco has a conensus rating of Strong Buy which is based on 20 buy ratings, 6 hold ratings and 0 sell ratings. The average price target for Costco is $777.08. This is based on 26 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
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%.