While there is no formal definition of a blue-chip stock, these companies are known for being valuable, stable and established. They’re typically big names — often household names — in their industries, and investors count on them for their reliability. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor.
Index funds and ETFs track an index, which is a specific segment of the stock market. Since blue-chip stocks typically have large market caps, a large-cap index fund or ETF is a good way to get exposure to these companies. You can also buy a fund that tracks the S&P 500 or the Dow Jones Industrial Average since both include blue-chip stocks. Investors also appreciate the dividends blue-chip stocks typically pay. Dividends are especially attractive if you’re investing for income, as many investors do in retirement. As a result of the uncertainty, it could be a good idea for long term investors to own a well diversified portfolio of leading stocks across many different sectors.
J&J is splitting into two companies by November 2023, and this is worth watching. One company will focus on consumer health products, considered the weaker segment of J&J’s business. The other will contain its highly regarded pharmaceuticals and medical devices segment.
Blue Chip Stocks
Since these organizations have a large market capitalization, superior reputation, and strong performance record, they are extensively safe for investment. With time, blue chips grow steadily and offer high dividends. Investment advisors assist investors in selecting the right blue chip company. We ranked each stock based on the number of hedge funds in our database that owned shares of the same stock at the end of the fourth quarter. On February 15th, 2023, Albemarle announced fourth quarter results for the period ending December 31st 2022.
He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet’s insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.
The Walt Disney Company (NYSE:DIS)
Westamerica is the seventh largest bank headquartered in California. For those investors blue chip stocks can be a viable alternative. And speaking of ETFs, another benefit of blue chip stocks is that investors can find an ETF that specializes in blue chip stocks.
For the year, revenue grew 120% to $7.3 billion while adjusted earnings-per-share totaled $22.84 compared to $4.05 in the prior year. On January 23rd, 2023, Bank of Marin Bancorp released its fourth quarter 2022 results for the period ending December 31st, 2022. For the quarter the company reported record earnings of $12.9 million which represents a 5.7% increase compared to the $12.2 million for the third quarter of 2022.
Earnings for 2022 were $5.79 per share, which is a 14.7% decline from the $6.79 per share in 2021. Management expects moderate growth in the next twelve months, excluding PPP loans. Full year 2023 NII is expected to increase at a rate in the high single digits relative to end of 2022.
And when investors turn to the financial press, they find that analysts and advisors will offer different opinions. The truth is that over the years, there’s a case to be made for both. Investors of all experience levels can appreciate the stability and reliability that blue chip businesses give to shareholders. An investor can directly approach a brokerage firm to purchase blue chip security. Alternatively, one can invest in exchange-traded funds or mutual funds. ETFs pool investors’ funds into a basket of securities; this includes blue chip securities, as well.
INVESTMENT BANKING RESOURCESLearn the foundation of Investment banking, financial modeling, valuations and more. Growth RatesThe Growth rate formula is used to calculate the annual growth of the company for a particular period. It is computed by subtracting the prior value from the current value and dividing the result by the prior value. Cash FlowsCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment.
CEO Warren Buffett has one of the most impressive track records of market-beating returns in history and prefers to invest the company’s cash in lieu of paying dividends. That strategy has worked out great for shareholders so far. Ideally, investment portfolios should include diverse components—bonds, cash, blue chip securities, mid-caps, and small caps. Blue chip shares are a safe option—they can survive tough market cycles.
Best Blue Chip Stocks to Buy According to Hedge Funds
That’s why they can make excellent investments for the long-run. And their strength and reliability make them compelling investments for investors of all experience levels, from beginners to experts. And keep in mind that many of these companies increase their dividends every year. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
Blue chip companies usually sell high-quality and broadly-used products and services. They are known for their long-term track records of stable and reliable growth, helping them operate profitably regardless of current economic conditions. Blue chip stocks are smart choices for investors of all kinds. Beginning investors are likely familiar with the products and services of blue chip companies. Familiarity with a company makes stock buying more comfortable, and it’s exciting to become a partial owner of a business you know.
Blue-Chip Stock #6: Associated Banc-Corp. (ASB)
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. Coca-Cola particularly stands out for increasing its dividend. Its streak of consecutive annual dividend payment increases dates back to the early 1960s, a track record placing it among the top 10 dividend stocks on the market. Apple also earns recurring revenue through its services, which include its iTunes, App Store, and streaming television businesses. Apple’s market capitalization climbed above the $1 trillion mark in 2018 and then up to an unprecedented $2 trillion in 2020.
However, these securities also add the possibility for an outsized risk to the downside. Another way for investors to gain exposure to blue chip stocks is through an index fund that benchmarks the Dow Jones Industrial Average . For example, if you own $1,000 shares of KO stock in June 2022, you would be in line to collect $5,520 in annual dividends. By reinvesting those dividends you would buy 22.66 new shares without having had to add any of your own money.
Conversely, more conservative investors need not stick to fixed income, low growth assets. Buying blue chip stocks can offer the opportunity for capital gains that may, in many cases, outpace the rate of inflation which is a concern with fixed-income investments. And since many blue chip stocks pay dividends and rising dividends at that, investors have another avenue for collecting income from these high-quality stocks. Blue chip companies have solid business models and impressive track records of returns for investors. These returns often include regular and growing dividend payments, making blue chip stocks among the most popular for conservative investors.