Updated on March 30, 2023
Investors are interested in betting in favour of the best blue-chip stocks to get high rewards. Blue-chip stocks are shares of well-established companies known for their ability to stay profitable in both good and bad economic times.
Blue-chip stocks are considered safe and reliable investments because of their market leadership, years in the business, large capitalization, and high market profitability. Some investors use blue-chip stocks to balance their portfolio with riskier options and as a safe haven for their money.
‘Blue chip’ is a poker term often used to describe a company considered valuable and prestigious. In poker, blue chips hold the highest value and, in the world of investing, are used to highlight the highest-priced stocks in the market.
Generally, blue-chip stocks earn an average rate of return of 10%, which is on par with the indices on which they feature. A fantastic indicator of whether a stock is blue-chip or not is whether it lists on a popular stock index. Indices such as the Dow Jones Industrial Index, or Do Jones 30, highlight 30 of the best-performing blue-chip stocks in the US.
Here are the best blue-chip stocks for you to invest in:
3M (ticker: MMM)
This is an American company specialising in fields like industry, worker safety, U.S. healthcare, and consumer goods. It prodigiously produces over 60,000 products under different brands, including adhesives, laminates, passive fire protection, window films, dental and orthopedic products, electrical and electronic connecting and insulating materials, and so much more.
This company is one of the most successful in the industrial sector and therefore counts as a blue-chip stock. The company’s inventions in health and safety products capture the attention of both businesses and consumers alike.
Market capitalization: $71.33 billion
Amazon (ticker: AMZN)
Here is a true pioneer of a company in the e-Commerce industry with one of the world’s largest online retail stores. The company offers everything from homeware to electronics, healthcare to subscription T.V. services, cloud computing, online advertising, and artificial intelligence. Consumers and Investors consider it one of the most significant cultural forces globally.
Amazon’s (AMZN) subsidiaries include Ring, Twitch, IMDb, and Whole Foods Market. The company has grown its reputation through technological innovation and aggressive reinvestment of profits into capital expenditures. With over 200 million Amazon Prime subscribers, the company is bigger than Walmart (outside of China).
Market capitalization: $952.9 billion
Apple (ticker: AAPL)
This tech giant is one of the ‘Big four’ technology companies and is well-known for its cutting-edge products and software; iPhones, Mac computers, and iOS software. Apple was the first company to hit the trillion-dollar mark in 2018 and is the world’s largest technology company (by revenue). In 2021, the company reported revenues of $365 billion, and as of 2022 became the world’s biggest company by market capitalization.
Apple is the fourth largest personal computer maker and the second biggest manufacturer of mobile phones in the world.
Market capitalization: $2.36 trillion
Coca-Cola (ticker: KO)
Coca-Cola has existed since 1892 and still enjoys a significant market share in the industry. Customers enjoy the company’s soft drinks and syrups from almost every country in the world. This is one of the most recognizable brands across the globe.
Market capitalization: $271 billion
Microsoft (ticker: MSFT)
An American multinational technology company known for producing computer software, consumer electronics, personal computers and others.
The company has some of the most popular operating systems in the world; Windows, MS Office, and Internet Explorer browser. Consumers and investors alike recognize it as the world’s largest software maker. Its Xbox video consoles and Microsoft surface touchscreen computers are its flagship hardware products.
Market capitalization: $1.84 trillion
Johnson & Johnson
This company is well-known for its consumer products, such as baby shampoo, band-aids, and Tylenol pain reliever. However, the healthcare giant doesn’t just focus on consumer products but also makes a wide range of medical devices for doctors and other medical professionals.
Johnson & Johnson also has a vast pharmaceutical business and produces drugs like the arthritis treatment Remicade, prostate cancer drug Zytiga, and psoriasis drug Stelara.
Market capitalization: $463 billion
American Express (ticker: AXP)
This financial giant is another blue-chip company to consider adding to your portfolio. The company is both a credit card company and a payments network. Its primary income generators include credit card, transaction, and processing fees. The company revenue will increase from both new users and higher transaction volume.
The company’s management has asserted that it will be able to secure double-digit profits in the coming years. It also plans to pay out roughly a quarter of its profits to shareholders. In June 2022, it raised dividend payments by 20%.
Market capitalization: $115.19 billion
Nike (ticker: NKE)
With a logo as famous as its client list, this blue-chip company specializes in designing, developing, manufacturing, and marketing athletic footwear, apparel, equipment, accessories, and services. It is the global leader in athletic shoes and apparel, as well as a huge manufacturer of sporting equipment.
The Nike brand is valued at $32 billion and employs over 76,700 people worldwide, making it one of the most valuable brands in the athletic industry.
Market capitalization: $165.78 billion
Lockheed Martin (ticker: LMT)
This is an American company with a footprint in the aerospace, arms, defense, information security, and technology industries. The company is one of the biggest players in the sectors within which it operates, employing roughly 115,000 people, including 60,000 engineers and scientists worldwide.
Due to its sheer size and scale of operation, it enjoys large defense contracts from governments such as the US government. As of 2009, it received $38.4 billion in US government contracts, while foreign government contracts amounted to roughly $5.8 billion.
Market capitalization: $ 126.70 billion
Starbucks (ticker: SBUX)
This is an American coffeehouse chain with its headquarters in Seattle, Washington. The company is the world’s largest coffeehouse chain, with a presence in over 80 countries and upwards of 33,833 stores.
According to experts, this brand’s fresh take on traditional coffee products greatly influenced the second wave of coffee culture. Starbucks offers various products guaranteed to entice even the most hardened anti-coffee evangelist.
Market capitalization: 114.28 billion
Other blue-chip stocks to consider include: AbbVie (ticker: ABBV), Honeywell International (ticker: HON), Proctor & Gamble (ticker: PG), Mastercard (ticker: MA), JP Morgan Chase (ticker: JPM), Walmart (ticker: WMT), Caterpillar (ticker: CAT), UnitedHealth Group (ticker: UNH), Oracle (ticker: ORCL), Northcorp Grumman (ticker: NOC), McDonald’s (ticker: MCD), Home Depot (ticker: HD), Kroger (ticker: KR), Intel (ticker: INTC) and many more.
In conclusion, investors flock to blue-chip stocks for their stellar reputation, performance, profitability, and ability to pay consistent dividends. Some of the world’s most loved and admired blue-chip stocks include companies like 3M, Amazon, Apple, Nike, Starbucks, and others whose operations impact the customers they serve and investors who risk their money in these corporations.
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