The drinks and food on your shelf, the hair products in your bathroom, the credit card in your wallet and the shows you watch. Blue chip stocks are reliable, which is why they’re so appealing to investors. Not all blue chip stocks are the same, but they have underlying characteristics that make them easy to spot.

Blue-Chip Stocks Explained

Lincoln National reported third quarter 2023 results on November 1st, 2023, for the period ending September 30th, 2023. The company generated net income of $4.79 per share in the third quarter, which compared favorably to ($10.47) in the third quarter of 2022. A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance.

Invest For The Long-Term With Blue Chip Stocks

However, thorough research and analysis should be conducted before investing. Coca-Cola is a blue chip stock with a highly profitable business and a nearly unparalleled history of returning cash to shareholders through dividends. The company owns one of the world’s most powerful collections Blue chip stock list of brands. It also has one of the largest and most powerful infrastructure and distribution networks in the consumer goods sector. Thanks to its competitive advantages, Coke has been able to deliver consistent earnings growth and increase annually for more than six decades.

• The company has also been actively streamlining its product lines and investing in e-commerce to adapt to changing consumer shopping behaviors.
• It’s also below the five-year average, suggesting the stock is priced to buy right now.
• Ongoing earnings growth should lead to additional increases in future years.

What is a blue chip stock?

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. Because they are backed by dependable, high-quality businesses, stocks in the category are often appealing as long-term investment candidates. The U.S. plays host to more blue chip companies than any other country.

Why invest in blue chip stocks?

Price stability, strong financial health and long-established track records make blue chip stocks attractive for most investors. These stocks belong to well-established, large-cap companies with a consistent performance history, making them a safer investment option. Blue chips weather economic downturns better than smaller or riskier stocks, offering investors security. Overall, their reputation, reliability and historic performance make them an appealing choice for investors looking for steady, reliable returns over the long term. Johnson & Johnson boasts a diversified business model across pharmaceuticals, medical devices and consumer health products, providing stability and resilience across various market conditions. The company has a robust pipeline of innovative pharmaceuticals and medical devices, fostering long-term growth prospects.

UNH is also leveraging technology to improve outcomes and lower costs. Gains that come purely from stock price increases, on the other hand, can be elusive. Those gains aren’t definitively yours until you liquidate the position.

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 recent launches, including cardiovascular drug Vyndaqel, Conover says. Pfizer provided 2024 guidance that acknowledged the firm would be unlikely to hit the previous 6% growth-rate guidance from 2020 to 2025 (excluding covid-19 product sales). Despite the falling outlook, management reiterated support for the dividend, which we believe is secure and will likely support the stock valuation.

While some note the near-term headwinds from cautious consumer spending, others believe PepsiCo’s strong brand portfolio and global presence position it well for the long run. PepsiCo’s business is resilient and should hold up well even if the U.S. economy is in recession. T-Mobile’s 5G network leadership, “Un-carrier” customer-centric strategy, and smart capital allocation continue to drive industry-leading growth. In Q2, it reported the highest postpaid phone net additions in company history. Cash flow is also surging, with Q2 free cash flow up 54% year-over-year.

The company’s focus on user experience and sleek design has positioned it as a leader in the technology industry. Over the years, Apple has diversified its offerings, including services like Apple Pay and subscription services like Apple TV+. Each investor https://investmentsanalysis.info/ may identify the best “blue-chip stock” differently, but many high-quality blue-chip companies relied on for decades are found in major market indexes. The Dow Jones, composed of the 30 largest U.S. companies, is a renowned “blue-chip” index.