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.
Our estimates are based on past market performance, and past performance is not a guarantee of future performance. Many traders prefer to spread their investments over a larger number of stocks, as part of a diversified trading portfolio. As well as shares, you can also trade on other related financial markets, like indices, ETFs and share baskets, as well as forex, commodities and treasuries. You can open a spread betting or CFD trading account to trade on the price movements of thousands of global shares in the stock market. We offer over 9,500 shares and ETFs across a diverse range of sectors, including blue-chip technology, retail, healthcare, travel and engineering stocks. Idea is to highlight those companies which have the capabilities to pay consistent-dividends.
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. That’s why many investors best audiobooks for learning how to trade stocks turn to low-cost index funds or exchange-traded funds instead. These funds contain a curated collection of investments and allow you to purchase a large selection of stocks in one transaction.
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. the new investor’s complete guide to brokers Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
Lancaster Colony has beaten the market for decades with 15% annual returns, compared to 10% for the S&P 500 over the past 30 years. Lowe’s is a Fortune 500 company that operates a chain of retail home improvement and appliance stores in the US, Canada, and Mexico. All of them have increased their dividends for more than 50 years straight. Public lets you buy any stock with any amount of money — commission-free. After applying the above-mentioned filters, out of all listed companies, only about 150 passed all our filters.
If you have ever wondered what blue chip dividend stocks are, why they are attractive, where you can find them, and what the best ones are, you have come to the right place. Blue-chip stocks provide a way to invest in stable, good-performing corporations with minimal risk. With Stash, you can buy shares of blue chip ETFs and individual shares of blue chip companies.
- The truth is that over the years, there’s a case to be made for both.
- A blue-chip stock is a great way to generate a reliable income stream.
- There is no official list but one easy way to identify a blue chip stock is to look at the Dow Jones Industrial Average.
- “Dividend King” is an informal label given to companies that have increased their dividend payouts for 50 years or more.
- If a stock is considered blue chip, it is generally the market leader or one of the top performers in its sector.
Another way for investors to gain exposure to blue chip stocks is through an index fund that benchmarks the Dow Jones Industrial Average . And speaking of ETFs, another benefit of blue chip stocks is that investors can find an ETF that specializes in blue chip stocks. 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.
Best Blue-Chip Stocks to Buy: Pfizer (PFE)
One thing is for sure, most of the time, blue-chip stocks trade at a high P/E multiple. So, if these stocks are so expensive, is it worth buying them? Some companies found themselves in the right place at the right time. Think about the housing market boom or the commodities market fueled by China’s debt-fueled infrastructure binge.
Blue chips are generally considered the best-known, most established, and best-capitalized companies in the world. Blue-chip stocks are the shares of well-established, financially stable and profitable companies that are referred to as having « blue-chip » status. Blue-chip stocks can offer a lower-risk and less volatile investment opportunity, and they are often considered to be safe haven assets, given their leadership status within their industries.
You’re our first priority.Every time.
When you open a new, eligible Fidelity account with $50 or more. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. Microsoft is known for inventing some of the most widely used operating systems throughout the world, including Windows, MS Office and the Internet Explorer browser.
Because of their lower risk, more established company, and consistent performance, these are considered ideal for most portfolios. Because they are so big, blue chip companies also tend to drive returns for the whole market, Greenman said. So by owning a collection of blue chip stocks, you’re owning a good representation of the entire market. There is no official list but one easy way to identify a blue chip stock is to look at the Dow Jones Industrial Average. All of the 30 companies included in that list are generally considered blue chip stocks.
Blue Chip Dividend Stocks – Investment Checklist
The offers that appear in this table are from partnerships from which Investopedia receives compensation. Investopedia does not invest in the united states include all offers available in the marketplace. Investopedia requires writers to use primary sources to support their work.
- NerdWallet strives to keep its information accurate and up to date.
- The blue-chip term came into financial parlance in the early 1920s.
- Learn everything you need to know about sell to open versus sell to close in this options trading guide.
- He leads a team responsible for researching financial products, providing analysis, and advice on personal finance to a vast consumer audience.
But out of these companies, only a handful could fetch a high GMR score. Their business is so sound that they’ve become the leaders of their industry. Moreover, they also enjoy a competitive advantage over their business rivals. Needs to review the security of your connection before proceeding.
The Role of Stock Indexes
However, just because a stock has performed well historically doesn’t mean it will continue to do so in the future. Instead of a momentary blip, however, home improvement spending has remained elevated post-COVID lockdowns, resulting in excellent growth for Home Depot. These factors will allow Walmart to raise its dividend well into the future. The company has raised its dividend continuously for the last 49 years. Look for management to continue to reward shareholders through an increasing dividend and share buybacks. Both businesses have incredibly reliable demand and can be expected to grow revenue for years to come.
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. While a blue chip company’s utter failure may not be common, these stocks are still subject to price fluctuation. While the value of blue chip stocks tends to be stable, every company has ups and downs, and no one is immune to market forces. Just like any stocks, shares can lose value, and dividend payments can fall if the company’s profits do. All investing involves risk, including the risk that you could lose money; blue chip stocks are not an exception. Despite the benefits they typically offer investors, even blue chip companies can fail.
The company was one of the biggest benefactors during the pandemic thanks to consumers flush with cash and more time spent at home. JPMorgan Chase has an exceptionally strong balance sheet prepared to weather challenging times. Unless soda suddenly stops being purchased, expect Coca-Cola to continue its incredible streak of increasing profits and rewarding shareholders via dividends.
For the fourth quarter of 2021, the company reported revenue growth of 29% to $83.4 billion. DividendsDividends refer to the portion of business earnings paid to the shareholders as gratitude for investing in the company’s equity. Market CapitalizationMarket capitalization is the market value of a company’s outstanding shares. It is computed as the product of the total number of outstanding shares and the price of each share.
They lack the sizzle and pop of sky-rocketing start-ups, but that’s only because they’re the big kids on the block. In our blue chip screener’s algorithm, ITC scores a very high rating. Till now what we have seen are a few good and bad points about blue-chip stocks. So in this portion, we will see three ways one can plan to invest in blue-chip stocks. No matter how good the company is, buying its stocks at overvalued price levels will not help. In dealing with blue-chip stocks, emphasis must be on the price at which it is bought.
Berkshire Hathaway owns a litany of businesses, from insurance companies to fast-food chains and everything in between. Despite its long standing as a technology products company, Apple’s focus has recently been on growing its Services revenue, a segment which generated nearly $70 billion last year. This shift has allowed the company to leverage its brand loyalty and create a variety of new, high-margin revenue streams which will continue to support Apple’s profitability for years to come.