With a firm foothold in the payments processing industry, Visa will likely be a blue chip stock for many years to come. Along with Mastercard, Visa is 1 of 2 primary credit card companies functioning in the United States, with American Express and Discover following behind.
What are blue-chip stocks and why are they popular?
Blue-chip stocks are popular among investors due to their stable earnings, steady cash flows and proven business models. Investors with long time horizons who want modest but consistent returns typically turn to blue-chip stocks. As leaders in their industries, these companies’ share prices tend to be high.
What is a blue chip fund?
These blue chip funds bundle multiple blue chip stocks into a single security, offering a simple way to diversify across many high-quality stocks. These investment vehicles also tend to be less volatile than individual stocks, which can be particularly appealing for people who are retired or nearing retirement.
Can I include blue-chip stocks in my Isa?
A blue-chip stock can be included in a stocks and shares ISA, which can protect gains from taxation. Many blue-chip companies offer diversification. Because of the size of these companies, many blue-chip stocks can offer investors exposure to different sectors in one stock.
Is American Express a blue chip stock to buy?
Financial giant American Express ( NYSE:AXP) is another blue chip stalwart to consider. It’s both a credit card company and a payments network. Its main revenue generators include credit card fees and transaction processing fees. The company is poised to increase both revenue streams with new users and higher transaction volume.
What is considered a blue chip stock?
What Is a Blue Chip Stock? A blue chip stock is a huge company with an excellent reputation. These are typically large, well-established, and financially sound companies that have operated for many years and that have dependable earnings, often paying dividends to investors.
What is the best blue chip stock?
Apple Inc. (AAPL)Analysts recommend these blue-chip stocks in 2022. ... Apple Inc. ( ... UnitedHealth Group Inc. ( ... Visa Inc. ( ... Mastercard Inc. ( ... Home Depot Inc. ( ... Thermo Fisher Scientific Inc. ( ... Comcast Corp. (More items...•
Is Mastercard a blue chip stock?
Payment processing giant Mastercard is a blue chip company in the digital payments space. As one of the most recognizable global names in electronic payments, Mastercard has competitive advantages that enable it to maintain its dominant marketplace position.
Which shares are blue chip shares?
A blue-chip share is generally a constituent of a prominent share market index like the Dow Jones Industrial Average in the US. Although there is no official list of blue-chips, the best place to start here in Australia would be the S&P/ASX 20 Index (ASX: XTL).
Is Visa a good long term investment?
Visa (NYSE:V) has an annual dividend growth rate over the last 5 years of 17.91% and a low payout ratio of just 21.54%. The company's characteristics make Visa attractive for dividend income investors seeking dividend growth stocks and for investors with a long investment horizon aiming to invest for their retirement.
Is Visa overvalued?
Is Visa Valuation Too High? Visa's stock price has been hovering around $200 per share for the majority of 2020. This represents an all-time high market cap of over $420 billion. The company also raised its quarterly dividend to $0.30 per share, or a $1.20 annual yield.
Is Apple a blue chip stocks?
Examples of blue-chip stocks Apple. Coca-Cola. Disney. IBM.
Is Coca-Cola a blue chip stock?
Even by the highest standards, blue chip stocks have managed to set themselves apart. Think about companies such as Apple, Coca-Cola, and Walmart, for instance.
Is Amazon blue chip?
Blue-chip companies usually have big market caps, strong balance sheets, and solid history. Some examples of the blue-chip stocks are Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), The Coca-Cola Company (NYSE: KO), and The Walt Disney Company (NYSE: DIS).
How do you know if a company is a blue chip?
Several parameters can be considered to identify blue chip companies. They include consistent annual revenue over a long period, stable debt-to-equity ratio, average return on equity (RoE) and interest coverage ratio besides market capitalisation and price-to-earnings ratio (PE).
Is Walmart a blue chip stock?
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. These stable, profitable, and long-lasting companies are relatively safe investments.
Is Tesla a blue chip stock?
Tesla (TSLA) is expected to be about to finally get rid of its “junk bond” rating and become a “blue chip” – something somewhat overdue for the sixth most valuable company in the world.
What stocks Will Boom 2022?
The below table covers some of the most important factors while evaluating Growth stocks.COMPANY NAMENSE CODEBSE CODEBajaj FinanceBAJFINANCE500034Britannia IndustriesBRITANNIA500825Muthoot FinanceMUTHOOTFIN533398Petronet LNGPETRONET5325224 more rows•Jul 8, 2022
What is the best stock to buy in 2022?
Stocks With Growth Potential for 2022Lithia Motors Inc. (LAD) ... Travel + Leisure Co. (TNL) ... Mueller Industries Inc. (MLI) ... First BanCorp (FBP) ... Herc Holdings Inc. ... Devon Energy Corp. ... Marathon Oil Corp. ... Qualcomm Inc.More items...•
What is the most reliable stock to buy?
Best safe stocks to buyBerkshire Hathaway. Berkshire Hathaway (NYSE:BRK. ... The Walt Disney Company. ... Vanguard High-Dividend Yield ETF. ... Procter & Gamble. ... Vanguard Real Estate Index Fund. ... Starbucks. ... Apple.
What stock paid the highest dividend?
9 highest dividend-paying stocks in the S&P 500:Lumen Technologies Inc. (LUMN)Altria Group Inc. (MO)Pioneer Natural Resources Co. (PXD)Vornado Realty Trust (VNO)Simon Property Group Inc. (SPG)Oneok Inc. (OKE)Devon Energy Corp. (DVN)Kinder Morgan Inc. (KMI)More items...
How many blue chip stocks are there?
There is no official list of blue chip stocks. However, generally speaking, investors consider a member of the Dow Jones Industrial Average to be among the bluest of the blue chips. There are 30 blue chip stocks using this strict measure, since there are 30 companies in the Dow Jones. That list is currently as follows:
What are some examples of blue chip stocks?
For example, many investors might consider well-known mega-cap stocks like Berkshire Hathaway, Amazon, Alphabet, and Facebook blue chip stocks. However, because they don't pay a dividend, they are disqualified from blue chip status in the eyes of some investors.
What is the main qualifier for blue chip stocks?
While investors might use different criteria to compile a list of blue chip stocks, the main qualifier is elite durability. That's a trait fewer than 50 companies typically possess, making blue chip stocks a select group that most companies strive to join one day.
What is blue chip?
Blue chips are generally considered the best-known, most established, and best-capitalized companies in the world. Here's a look at how many companies are in this elite group. Image source: Getty Images.
Is a company well established?
Similarly, some investors narrowly define well-established companies as those that have been operating for many decades and aren't likely to be displaced by competitors, broken up by regulators, or disrupted by an unexpected disaster. Because of that, several mega-cap tech companies might be well known and well capitalized (e.g., Tesla and Netflix with their $200 billion+ market caps), but some investors don't view them as well established since they don't have multidecade operating histories.
Is blue chip stock a good investment?
Blue chip stocks are an elite group. They are the most stable, profitable, and enduring companies, which generally makes them among the safest investments and, like a blue chip in poker, highly valuable to investors. Blue chips are generally considered the best-known, most established, and best-capitalized companies in the world.
Who is the CEO of Whole Foods Market?
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors.
Why are blue chip stocks good?
Good news is priced into blue-chip stocks. While blue-chip stocks are known for their stability, they are not without risk. This is because of the halo effect these stocks receive. Their stability creates a "benefit of the doubt" that is typically baked into the stock's price. When these stocks are the focus of bad news (e.g. a product recall, a poor earnings report, an executive scandal), the stock can be punished. And while younger investors, in general, have a higher risk tolerance than investors who are at or nearing retirement age, they may be better served to invest in stocks that have the ability to rebound from losses faster.
Why are blue chip stocks so attractive?
Blue-chip stocks are known for their stability. This doesn't mean that blue chip stocks don't grow. It simply means that these stocks tend to show less volatility than the broader market. They will typically have an attractive price-earnings ratio. This stability is one of the qualities that make these attractive stocks to buy particularly for buy-and-hold investors who are looking for value and growth. While these stocks may not show the aggressive growth of small-cap or mid-cap stocks, they offer a higher degree of certainty for investors who can count on these stocks to rise during good times, but perhaps not fall as dramatically when the stock market is down.
What does it mean when a blue chip stocks don't grow?
This doesn't mean that blue chip stocks don't grow. It simply means that these stocks tend to show less volatility than the broader market. They will typically have an attractive price-earnings ratio.
What is market rank?
MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
What does a beta of 1 mean?
They typically have a beta of around 1, which means that these stocks have a high correlation with the broader market.
What is blue chip stock?
A blue chip stock is a large, financially-sound, nationally-recognized and well-established business. 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. Learn more.
Do blue chip stocks beat the stock market?
However, the stability and well-known brand names associated with these stocks can also limit the profit profits for younger investors for a few reasons: Blue-chip stocks do not generally beat the stock market – Almost by definition, blue-chip stocks drive the market averages.
What is a Blue-Chip Stock?
A blue-chip stock is a huge company with an excellent reputation. These are typically large, well-established and financially sound companies that have operated for many years and that have dependable earnings, often paying dividends to investors. A blue-chip stock typically has a market capitalization in the billions, is generally the market leader or among the top three companies in its sector, and is more often than not a household name. For all of these reasons, blue-chip stocks are among the most popular to buy among investors. Some examples of blue-chip stocks are IBM Corp., Coca-Cola Co. and Boeing Co.
Why are blue chip stocks important?
Investors turn to blue-chip stocks because they have dependable financials and often pay dividends.
What companies went bankrupt in 2008?
The bankruptcies of General Motors and Lehman Brothers, as well as a number of leading European banks during the global recession of 2008, is proof that even the best companies may struggle during periods of extreme stress.
Is blue chip a part of a larger portfolio?
Blue Chips as Part of a Larger Portfolio. While blue-chip stocks are appropriate for use as core holdings within a larger portfolio, they generally shouldn't be the entire portfolio. A diversified portfolio usually contains some allocation to bonds and cash.
Can blue chip stocks survive?
There is a perception among investors that blue-chips can survive market challenges of many kinds; while this may be largely true, it is not a guarantee. For this reason, it's crucial to diversify a portfolio beyond only blue-chip stocks.
Who is James Chen?
James Chen, CMT, is the former director of investing and trading content at Investopedia. He is an expert trader, investment adviser, and global market strategist. Somer G. Anderson is an Accounting and Finance Professor with a passion for increasing the financial literacy of American consumers.
Who is Marcus Reeves?
Marcus Reeves is a writer, publisher, and journalist whose business and pop culture writings have appeared in several prominent publications, including The New York Times, The Washington Post, Rolling Stone, and the San Francisco Chronicle. He is an adjunct instructor of writing at New York University.
Why are blue chip funds good for retirement?
Blue chip funds offer an easy way to build diversified exposure to high-quality stocks, and these equities can be particularly good investment vehicles for people who are in or nearing retirement because they tend to be less volatile than individual stocks.
What is Disney's history?
Walt Disney ( NYSE:DIS) has an illustrious history, starting with its namesake creator’s disruptive innovations in the animation industry. Since the early 20th century, Disney has transformed itself into an overarching media and entertainment titan. Its movie studios have made massive acquisitions to become a driving force in Hollywood, but it has also built out its television business, which includes key assets like the ABC broadcast network and the ESPN sports franchise. Disney also has huge exposure to the travel industry, with its theme parks being landmark destinations for many vacationers and its cruise ships helping to introduce Disney fans to the seas. Add to that an extensive network of retail stores, and it's clear how Disney has mastered the art of touching its customers' lives in many different ways.
What is an industry leader with a dependable business model?
An industry leader with a dependable business model. A proven track record and strong reputation with consumers and shareholders. A history of delivering strong returns over the long term. Pays dividends to shareholders and regularly increases its payouts.
What is Motley Fool?
An industry leader with a dependable business model. A proven track record and strong reputation with consumers and shareholders. A history of delivering strong returns over the long term. Pays dividends to shareholders and regularly increases its payouts. Source: The Motley Fool.
Do you have to have a percentage to invest in blue chip stocks?
However, just about every investor can benefit from having a portion of their portfolio invested in blue chip stocks. It doesn't have to be a set percentage, as different investors will have different viewpoints about how much risk they want to assume. The more you want to preserve and protect the money you have invested in the stock market, however, the more attractive blue chip stocks will be as you try to meet your objectives and reach your long-term financial goals.
Is blue chip a good investment?
Blue chip stocks are smart investments for investors of all kinds. Beginner 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. Meanwhile, long-time investors will have seen blue chip stocks rise to the top over the long haul, outlasting their weaker rivals and finding ways to stay relevant and keep growing even as their industries change.
Do blue chip stocks hold up?
Blue chip stocks often hold up better during dramatic downturns than their smaller rivals, and their investors tend to remain more confident about their long-term prospects than about those of less established businesses. Many of these companies pay substantial dividends and have payout growth streaks that have earned them a spot among the illustrious ranks of the Dividend Aristocrats and Dividend Kings.
What is Abbvie worth?
AbbVie, a drugmaker worth more than $200 billion, boasts an enviable portfolio of medicines that includes the world's highest-grossing drug in Humira and a handful of other billion-dollar products, like plaque psoriasis treatment Skyrizi, cancer medication Imbruvica and Botox. More traditional income investors will appreciate ABBV's 4.4% dividend, the second-highest on this list. The stock trades for just 9.5 times forward earnings, making AbbVie one of the more conservatively priced blue-chip stocks to buy. AbbVie's $63 billion acquisition of Botox maker Allergan is starting to pay off: Last quarter, both cosmetic and therapeutic Botox sales more than doubled year over year.
How much dividend does JNJ pay?
Worth around $400 billion, JNJ pays a 2.6% dividend, which is more than double the rate that U.S. 10-year Treasurys pay. Analysts expect earnings per share (EPS) to rise by about 12% in 2021. The stock trades for less than 24 times earnings. These are the top blue-chip stocks for 2021.
What are the best blue chip stocks to buy in 2021?
First among the best blue-chip stocks to buy for 2021 is the health care and consumer goods giant Johnson & Johnson. The company has been around since 1886 and has been a healthy, diversified "steady Eddy" stock for decades. In fact, JNJ is such a well-rounded, financially sound company that rating agencies have given its debt a perfect AAA rating – a measure of risk that suggests Johnson & Johnson has a lower risk of defaulting than the U.S. government. Worth around $400 billion, JNJ pays a 2.6% dividend, which is more than double the rate that U.S. 10-year Treasurys pay. Analysts expect earnings per share (EPS) to rise by about 12% in 2021. The stock trades for less than 24 times earnings.
What is the oldest company in the US?
A classic consumer defensive stock, Procter & Gamble is the oldest company on this list, having been founded in 1837. Much as times may change certain industries, Procter & Gamble is essentially timeless and recession-proof, selling necessities like toothpaste, razors, laundry and dish detergent, toilet paper, and shampoo. Its highly recognizable brands are too numerous to list but include Tide, Crest, Gillette and Pampers. You can count on reliable single-digit revenue and earnings-per-share growth year in and year out. A dividend aristocrat, PG has raised its dividend payout for 64 consecutive years. The $350 billion company currently offers a 2.4% dividend yield. In the last fiscal year, the company returned $19.3 billion to shareholders through buybacks and dividends.
How much is 3M worth?
An industrial giant, 3M is an incredibly well-diversified company worth north of $110 billion that's been around since 1902. Unsurprisingly, 3M's business is benefiting from some semblance of a return to normalcy, with its transportation and electronics division (led by areas such as automotive parts, its semiconductor business and factory automation) and its health care segment (driven by its oral care, medical solutions and food safety operations) driving growth in the second quarter. Although not the most exciting of the best blue-chip stocks to buy, the company's established business lines do benefit from a culture of innovation: 3M strives to have 30% of revenue come from products introduced in the last four years and allows technical employees 15% of their paid time to work on personal projects. MMM trades for less than 20 times earnings and pays a 3.1% dividend.
How much will Berkshire Hathaway stock increase in 2021?
Analysts expect earnings per share (EPS) to rise by about 12% in 2021. The stock trades for less than 24 times earnings. The largest company on this list, famed financial conglomerate Berkshire Hathaway, which grew to prominence under the iconic long-term investor Warren Buffett, is worth around $530 billion.
Is Johnson and Johnson a good stock?
The consummate blue-chip stock, Johnson & Johnson is a well-diversified health care and consumer goods company with a corporate history dating to 1886. Worth about $470 billion, JNJ is so safe that the big three rating agencies all grade its debt as AAA, the highest rating. By comparison, the U.S. government itself has a AAA rating from only two of the three agencies. Despite reliability that even Uncle Sam can't match, this stock pays a dividend at a 2.4% annual rate, roughly double the 10-year U.S. Treasury yield. JNJ shares have performed well this year, boosted in a large part by the resurgence of its medical devices segment, which saw revenue jump 62.7% in the second quarter as demand for elective procedures began to normalize.
What is a FBGRX?
Fidelity Blue Chip Growth Fund (FBGRX) invests 80% of its holdings in blue chip stocks. These tend to be from companies with medium to large market capitalizations that Fidelity Management & Research believes have higher-than-average growth potential.
What is Vanguard dividend appreciation?
Vanguard Dividend Appreciation ETF (VIG) strives to duplicate the performance of the S&P U.S. Dividend Achievers Select Index. This index includes companies who have raised their annual dividend payments for at least 10 years, a similar approach to funds that model the S&P 500’s dividend aristocrats.
What is blue chip stock?
A blue chip stock is an investment with a proven history of steady growth and staying power. There aren’t precise criteria that define blue chip stocks, but generally speaking they have the following characteristics:
Do blue chip companies have dividends?
Dividends. Blue chip companies have relatively low levels of debt and excellent cash flow. They tend to reliably return some of this cash flow to their shareholders in the form of regular dividend payments.
Is blue chip a good investment?
If you’re new to investing, blue chips can be an excellent way to begin investing in the stock market . Before you buy, however, get to know the advantages and downsides you should understand:
Do blue chip companies have exponential growth?
Because blue chip companies have been in business for quite some time and already command high share prices, you probably won’t experience exponential growth over the short term. Instead, you’ll see steady, but perhaps much less exciting, returns build over years and decades.
Can you concentrate your money in a few companies?
While blue chip companies have demonstrated histories of weathering market ups and downs, concentrating your money in just a few could still leave you vulnerable to unexpected dips—as well as mean you miss out on potential large gains from other companies.
