The second-largest investment bank in the world by revenue, Goldman Sachs stock fell 8% in 2022 as the Federal Reserve tightened monetary policy amid rampant inflation. In the company’s April 2023 Q1 results, PG revealed that, although it has seen rising input costs, it nonetheless boosted profit margins for the first time in more than two years. The company raised prices by close to 10%, which helped generate a 4.1% increase to net sales—all despite sales volume falling 3%. It’s also below the five-year average, suggesting the stock is priced to buy right now.
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The stock is more expensive than in recent years; shares trade at a P/E of 18 versus a five-year average of 17. However, the company’s growth, strong position with next-generation nicotine products, and high starting dividend yield seem enough to justify a long-term investor scooping up shares. Blue chip stock list Blue-chip stocks, on the whole, are popular investments due to their proven long-term track record of financial stability and performance. The share prices of these companies have often grown steadily for decades and most of them pay relatively high, and often increasing, dividends.
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- Realty Income looks like one of the best-positioned REITs to deliver reliable income and bounce back as the economic picture improves.
- Once the dividend payment is in your account, it’s yours—and you didn’t have to sell the stock in the process.
- P&G’s long-standing history of dividend payments and steady growth makes it an attractive choice for income-oriented investors.
- Nestle faces competition from local operators, and past missteps have caused the firm to miss out on or be late to the latest consumer trends.
For this reason, many young and risk-hungry investors looking for high returns turn to small and medium-sized companies that can still grow substantially. Especially investors under 25 years of age tend to take on more risk, according to a Business Insider article. Since individual blue-chip stocks are easily accessible it isn’t hard to create a portfolio full of high-quality blue-chip stocks.
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This revived growth has Philip Morris poised to shower investors with cash over the coming decades. Additionally, the payout should grow nicely since analysts believe the company will grow earnings at a high-single-digit pace over the long term. Organic smoke-free product revenue grew over 18% year-over-year in Q2, which shows just how much momentum these next-generation products have. Philip Morris is a growing business again despite the secular decline in smoking. As shown in our guide on dividend investing, many dividend-paying blue-chip stocks manage to outperform the average market return. Even though this is true, investing in blue-chips generally doesn’t offer you the potential of exceptional share price appreciation as the companies already have a large market cap.
#1 Proven Track Record
While PepsiCo is recession-resistant, management has noted that consumers have resisted price increases. As a result, the stock has dipped to a price-to-earnings (P/E) ratio under 22 versus its five-year average https://investmentsanalysis.info/ of 26. The stock seems fairly valued today (not too expensive, but not cheap). Investors looking for a long-term stalwart that can deliver slow and steady growth should consider PepsiCo a stock they can trust.
Indeed, 14 of the 21 names listed below are components of the blue-chip barometer. True, hedge funds collectively have a rather poor long-term track record vs the broader market. It should also go without saying that not all blue chip stocks are created equal. Thanks to their relative stability and safety, blue-chip stocks function well as core portfolio holdings—particularly for novice investors and those who prefer low-maintenance stocks. The dividends also ease the stress of bear markets and provide funding to reinvest at the best possible time, when share prices are low.
These are the stocks you carry through downturns because you know they’ll come out the other side. They’re also the stocks you can reasonably ignore when you don’t have time to babysit your investment portfolio. The mega-cap definition of blue chips, on the other hand, is more concrete.
First, we provide paid placements to advertisers to present their offers. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This site does not include all companies or products available within the market. While nobody knows what the market or the economy will do in the future, volatility returned to the markets and could make things a bit bumpy over the coming months. A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
Here’s a little bit about each of these blue-chip stocks for the long term.
Identifying the “best” blue-chip stocks can depend on various factors, including your investment goals, risk tolerance, and market conditions. Blue-chip stocks are typically shares of well-established companies with a history of stable performance, reliable earnings, and a strong market presence. These stocks are often considered more resilient during economic downturns. Stable and reliable, having a blue chip stock in your portfolio is not likely to be a bad thing. This stability points to strong financial footing, meaning no debt and a lot of efficiency. Blue chip stocks are often protected from severe volatility, making the risks limited.
The company is a clear leader in its corner of the technology industry and has powerful competitive advantages. The tech giant has a fantastic history of delivering earnings growth, and it frequently ranks as the world’s most profitable company. Blue chip companies typically have powerful competitive advantages and decades of profitable operations under their belts. These investment vehicles also tend to be less volatile than individual stocks, making them particularly appealing to people who are retired or nearing retirement.