What does blue chip stock mean in stocks?
If a stock is considered blue chip, it is generally the market leader or one of the top performers in its sector. Typically, a blue chip stock is a component of major stock market averages and indexes, such as the S&P 500 index in the United States.
A blue chip stock is defined as a security that represents an equity position in a company possessing most of the following characteristics: An industry leader with a dependable business model. A proven track record and strong reputation with consumers and shareholders.
What Is a Blue Chip Stock? A blue chip stock is stock issued by a large, well-established, financially-sound company with an excellent reputation. Normally, such companies have operated for many years, have dependable earnings, and usually pay dividends to investors.
blue chip stock. Stock in a corporation with a national reputation for quality, reliability, and the ability to operate profitably . Dividends. A sum of money paid regularly by a company to its shareholders out of its profits.
Anchored by core Google properties and its $150 billion stockpile, Alphabet has the stability and vision to drive transformational growth, which is why it's on this list of stable blue-chip stocks. While ad revenue missed last quarter, Alphabet's Q4 sales still rose 13% year-over-year to $86 billion.
Year to date, the Dow, the S&P 500 and the Nasdaq Composite are up 3.3%, 7.1%, and 8.6%, respectively. Inclusion of Amazon is seen as a strategic move to increase the blue-chip index's exposure to new-economy stocks. Broadly, Amazon is categorized as a consumer discretionary company.
By investing in blue-chip stocks, investors can build a well-diversified portfolio. Here, we have identified three stocks from the Retail - Wholesale sector — Walmart Inc. WMT, The Home Depot, Inc. HD and Costco Wholesale Corporation COST.
The term "Blue Chip" came from poker, where blue chips were the most valuable. Because of their consistency and dependability, these stocks are considered high-value, low-risk investments in the stock market.
Blue chip stocks are usually less risky and thus considered safer than other stock-based investment options. That's because one of the major determining factors of a blue chip stock is that it must be a well-capitalized company, meaning it should have the financial fortitude to endure an inevitable economic downturn.
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.
What is the difference between a stock and a blue chip stock?
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.
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.
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%.
Netflix (NFLX)
Streaming pioneer Netflix (NASDAQ:NFLX) usually makes the list of the top blue-chip entertainment stocks. Through its transformative streaming service, the platform has disrupted the cable industry and then some.
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.
During economic slowdowns, investors turn to blue chip stocks to protect their investments. For example, during the financial crisis in the last decade, some blue chip companies survived the crisis and investors who held shares in these companies were able to recover their earnings.
Fortunately, there are still some great blue-chip stocks that investors can buy with confidence in 2024. Whether or not the current rally holds, these long-term, blue-chip winners are set to keep delivering steady gains for many years to come.
Walmart has a conensus rating of Strong Buy which is based on 25 buy ratings, 3 hold ratings and 0 sell ratings. The average price target for Walmart is $65.73. This is based on 28 Wall Streets Analysts 12-month price targets, issued in the past 3 months.
Lowe's is a blue-chip stock that offers investors reliability and resilience amid market fluctuations. Its 49-year history of dividend growth highlights its financial health and commitment to shareholders. Plus, with its stock buybacks, Lowe's enhances shareholder value over the long term.
Investors should aim to sell a stock after it experiences considerable growth and before it decreases in value. It is difficult to predict when a stock will start decreasing in value, but economic conditions and news reports can be good predictors.
Is Costco a blue chip stock?
Costco Wholesale
Prior to the pandemic, Costco (COST 1.25%) and Carnival (CCL 0.40%) were both considered resilient blue chip stocks for long-term investors.
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.
Blue-chip stocks possess several key characteristics, such as: Financial Stability: Blue chips generally have strong balance sheets and show consistent profitability and growth over time. Market Leadership: Blue chips are industry leaders with a dominant market share and clear competitive advantages.
The stock might respond to that sluggishness by staying relatively weak through most of 2024, but that's a small price to pay to gain exposure to one of the strongest consumer staples companies on the planet. co*ke deserves a spot on most investors' watch lists for 2024 and beyond.
Some examples of blue chip stocks are Coca Cola, Apple, IBM, American Express, McDonalds, DuPont, and American Express.
