- The name “blue chip” comes from the game of poker, where blue chips have the highest value
- Blue chips stocks are the shares of financially sound companies
- Blue chips are companies with high market capitalization, usually, in billions
- There are several advantages and disadvantages associated with blue chips
What are the top 10 blue chip stocks?
had 95 stocks in his portfolio. But you don’t have to have that many. Anywhere from 10 to 20 will get you diversity. 3. You don’t have to own technology companies. Many blue-chip investors ignore the sector because many companies don’t pay dividends.
Why are some stocks called Blue Chips?
- If this is over 100% it's bad news - the company can't cover the dividend and often will have to use debt.
- Anything over 70% is risky, and a bad year might endanger the dividend.
- The sweet spot is between 40 and 60%.
What are some examples of blue chip stocks?
SEARCHING FOR BLUE CHIP STOCKS-KEY SECTORS
- Utilities & Energy. The global economy runs on electricity, oil and natural gas. ...
- Consumer Staples. Another sector that is essential to our lives is consumer staples. ...
- Technology & Telecommunications. For our next sector of blue chips stocks with rich dividends let’s talk about technology and telecommunications.
- Health Care. ...
- Services. ...
- Industrials. ...
What are the best blue chip companies?
They should be just fine on the way out, too.
- Automatic Data Processing. Dividend yield: 1.9% Automatic Data Processing ( ADP, $191.89) is a steady Eddy that has grown sales, earnings and dividends at a respective 6%, 7.5% and 9.5% ...
- Bristol Myers Squibb. ...
- Cadence Design Systems. ...
What are blue chips in investing?
Key Takeaways A blue chip refers to an established, stable, and well-recognized corporation. Blue-chip stocks are seen as relatively safer investments, with a proven track record of success and stable growth.
Why are stocks called blue chips?
Key Takeaways The term "blue chip" comes from the game of poker, where blue chips are the highest value pieces. A company must be well-known, well-established, and well-capitalized to be a blue chip.
What is a blue-chip example?
Blue-chip stocks are companies that have been around for a long time, are worth a lot of money, and are financially healthy. Most blue-chips are household names like Nike and Coca-Cola.
Which are blue-chip companies?
Blue Chip Shares High Market Capitalization Based on market capitalization, India's leading blue chip companies are the state bank of India, Bharti Airtel, Tata consultancy services, Reliance Industries, Coal India, HDFC, ITC, Infosys, ICICI Bank, ONGC, GAIL, and Sun pharma.
Are blue chip stocks safe?
Blue-chip stocks are not high risk, so they're popular among investors with lower risk tolerance. While blue-chip stocks aren't bulletproof, their history of resisting market downturns makes them an appealing choice for many investors.
Which Bluechip fund is best?
IDBI India Top 100 Equity Fund.Canara Robeco Bluechip Equity Fund.Kotak Bluechip Fund.ICICI Prudential Bluechip Fund.BNP Paribas Large Cap Fund.SBI Bluechip Fund.Franklin India Bluechip Fund.Aditya Birla Sun Life Frontline Equity Fund.More items...•
Do blue chip stocks pay dividends?
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. Blue-chip stocks tend to pay reliable, growing dividends.
How do you pick a stock?
7 things an investor should consider when picking stocks:Trends in earnings growth.Company strength relative to its peers.Debt-to-equity ratio in line with industry norms.Price-earnings ratio as an indicator of valuation.How the company treats dividends.Effectiveness of executive leadership.More items...
Is Apple a blue chip?
Examples of blue-chip stocks Indices like the FTSE 100 and S&P 500 contain a mix of blue-chip stocks and large- or mid-cap companies that aren't considered blue chip. Blue-chip stocks are subject to change, but some common examples include: Apple. Coca-Cola.
Is Google a blue chip?
Blue chip stocks are stocks from a company that has a long-standing reputation of quality, reliability, and the ability to operate profitably over many years. These companies tend to be household names. General Mills, Apple, Google, and Disney are all blue chip stocks.
Is Amazon blue chip?
Blue-chip stocks are ones instantly recognized as established, dominant names in their respective industries. Take Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and The Coca-Cola Company (NYSE:KO), for example.
Who owns blue chip?
Boyd GamingBlue Chip Casino, Hotel and Spa is a riverboat casino located in Michigan City, Indiana. It is owned by Boyd Gaming.
Blue chip stock definition
Blue chip stocks are well-known companies that generally have long-term track records of success. A blue chip company tends to be a large, well-established leader in its sector and may also have a substantial consumer-facing business.
What makes a stock a blue chip stock?
Because blue chip stocks are usually the most dominant names in their respective industries, there are a limited number of them. However, there is no official list of blue chip stocks or any formal arbiter who dictates which companies land the blue chip designation.
Should you invest in blue chip stocks?
Despite the Kodak and Sears examples, it’s important to note that blue chip stocks can be the bedrock of an investing portfolio. Some may still be in full-on growth mode while many others are very mature companies.
Examples of blue chip stocks
While this is by no means an exhaustive list of all the stocks that can be classified as blue chip, this sampling helps show that blue chip stocks come from all industries.
Alternatives to blue chip stocks
If you’re new to investing and considering buying individual blue chip stocks, you may reconsider and instead invest in a broader, diversified index. For example, the S&P 500 includes all the major blue chip names, while also including plenty of other companies that are profitable and growing.
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.
Why are blue chip stocks so popular?
Because of their popularity, blue-chip stocks can be easy to buy and sell. This helps ensure that investors will be able to buy or sell a stock when they desire. Tax-free benefits. A blue-chip stock can be included in a stocks and shares ISA, which can protect gains from taxation.
What makes a blue chip stock a good investment?
There is no single definition of what a blue-chip stock is, but they share common attributes that include strong balance sheets which include large, positive cash flows, enduring business models that create fundamental and intrinsic value which , in return, help these stocks to deliver solid growth. These are just some of the reasons that these stocks are considered to be secure investments. Investors who own blue-chip stocks rely on them for their consistent growth and also for their ability to provide regular dividend payments.
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 are the disadvantages of blue chip stocks?
Disadvantages to blue-chip stocks. For most investors, blue-chip stocks are appealing investments. 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, ...
What does it mean when you hear the word "blue chip"?
When we hear the words “blue chip” we may think of something of the highest quality and value. In the game of poker, the blue chips always represent the highest dollar value. A blue-chip panel of experts is considered to consist of individuals of the highest knowledge and character to bring to a subject.
Do blue chip stocks pay dividends?
Blue chips have a strong dividend history. Most, but not all, blue-chip stocks have a history of paying a dividend. And many make dividend growth as a reward to their shareholders a primary goal. One of the reasons this is possible is because blue-chip companies typically have rock-solid balance sheets.
What is blue chip stock?
A blue-chip stock is typically a stock issued by a massive company with a stellar reputation. A stock is a small piece of a company referred to as a share, and most stocks give you the right to vote on the future of a company. Blue-chip companies are usually household names, and they're well-established.
What is the market cap of blue chip stocks?
Most blue-chip stocks have a market capitalization in the tens or hundreds of billions of dollars, or even in the trillions, which means there is plenty of liquidity, making it easy to buy and sell shares. The market cap is the total value of all the company's outstanding shares.
What is market cap?
The market cap is the total value of all the company's outstanding shares. Additionally, these companies tend to be leaders in their industries, with most of them being household names, so investors tend to invest with confidence that the company won't disappear or start to struggle anytime soon.
Why are blue chip stocks so popular?
They usually aren't as popular as momentum stocks, but they still have plenty of trade activity every day because they are trustworthy names.
What to do if you don't want to pick out individual blue chip stocks?
If you don't want to pick out individual blue-chip stocks on your own, you might opt for a blue-chip fund. Index funds or exchange-traded funds offer a low-cost way to get exposure to a large number of blue chips, all in one place. ETFs are available on stock exchanges just like stocks, so they are just as easy to buy as individual stocks.
How to tell if a stock is blue chip?
To determine whether a stock is a blue-chip stock, you should look at several factors, such as any potential dividend payment, the rating on the company's bonds, their earnings growth and whether they can pay off its debt.
Why do you buy and hold blue chips?
Thus, a buy-and-hold strategy is best with blue chips because over time, they tend to rise due to their reputations and solid earnings growth. There is never any guarantee of a positive return with any stock, but many investors see blue chips as a safer bet in the long term than some other types of stocks.
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.
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.
