Content
According to their website, the Motley Fool Stock Advisor stock subscription service has done seven times better than the S&P 500 over the last 17 years. Steady Eddies also tend to be the largest companies, and thus not have high growth prospects. These stocks are often more expensive than stocks from less established companies. A company might be able to pivot a product or service, but it’s still smart to look at which industries have the most growth potential moving forward and which industries are starting to die out.
Because blue chips are large, proven businesses spread across a wide range of industries, they are less volatile than shares of smaller companies. Investors—especially retired investors who are looking for some income—also appreciate the dividends that blue chips often pay. Blue-chip stocks offer stability, safety and dividends through companies with well-entrenched businesses that have proven they can stand the test of time (and pay dividends while doing it). Blue-chip stocks also tend to be substantial businesses, large or mega caps, with deep moats related to their brands, product(s) or industries. They offer an element of safety and income for investors in the long haul. Among the many benefits is reduced volatility and, in many cases, market-beating dividend yields.
How Do You Invest in Blue Chips?
The 30 stocks that make up the Dow Jones Industrial Average (DJIA) are often considered blue chips. Some examples include Microsoft, Apple, Coca-Cola, Chevron, and Boeing Corp. Brokerage services for alternative assets available on Public are offered by Dalmore Group, LLC (“Dalmore”), member of FINRA & SIPC.
- U.S. Treasuries (“T-Bill”) investing services on the Public Platform are offered by Jiko Securities, Inc. (“JSI”), a registered broker-dealer and member of FINRA & SIPC.
- Eight rate it a strong buy, 20 rate it a buy and three recommend holding.
- Its revenue was down 21% year-over-year, and up 2% from the previous quarter.
- The consolidation has made Applied Materials a great bet if you think semiconductor demand will continue to rise over the next decade or two.
- Blue chips may not be the answer if cheap dividend stocks are the goal.
UMC’s trailing-12-month ROCE of 28.31% is 495.5% higher than the industry average of 4.75%. Its trailing-12-month levered FCF margin of 17.94% is 163.4% higher than the 6.81`% industry average. The Biden-Harris Administration has announced the first CHIPS for America funding opportunity to reinvigorate the domestic semiconductor industry. The Bipartisan CHIPS and Science Act includes $39 billion in semiconductor incentives. AVGO shares were trading at $874.88 per share on Tuesday morning, up $62.15 (+7.65%). Year-to-date, AVGO has gained 57.60%, versus a 10.72% rise in the benchmark S&P 500 index during the same period.
The 7 Best Blue Chip Stocks To Buy Now
UGI Corporation is a gas and electric utility that operates in Pennsylvania, in addition to a large energy distribution business that serves the entire US and other parts of the world. It was founded in 1882 and has paid consecutive dividends since 1885. Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view.
AVGO has an A grade for Momentum and Quality and a B for Sentiment. It is ranked #11 out of 91 stocks in the Semiconductor & Wireless Chip industry. Click here for the additional POWR Ratings for Growth, Stability, and Value for AVGO. AVGO’s shares have gained 56% over the past nine months to close the last trading session at $812.73. AVGO’s trailing-12-month ROCE of 54.45% is significantly higher than the industry average of 0.63%.
Alphabet is another blue chip stock worth considering if you’re buying blue chip stocks and creating a diversified portfolio with large market caps and a proven track record of growth. These stocks may not outperform pure growth stocks during robust bull markets, but they are also likely to be among your “less bad” performers during market corrections. All in, KLA returned a total of $659 million to shareholders in the three months ending March 31.
More In Analyst Stock Picks
The stocks of these companies provide the opportunity for outsized future growth. However, these securities also add the possibility for an outsized risk to the downside. After making the first buy, go back to step two and repeat the process. Building a portfolio https://g-markets.net/helpful-articles/ultimate-guide-to-macd/ of blue-chip stocks is not a single purchase but repeated buying that creates larger positions over time. In this manner, dividends can be compounded and used to enhance returns. Yet, they’re not immune to market downturns and economic upheaval.
This was attributed to strong demand, with passenger capacity recovering up to eighty percent of pre-COVID levels in December. Their total revenue also increased by 8 percent from the second quarter to S$4.85 billion. Learn more about what to expect for Singapore banks after their record first quarter earnings. SEIL is one of the largest independent power producers in India, operating two coal-fired plants with a capacity of 2.6GW.
The stock has also lost the favor of many analysts, suffering from earnings estimate cuts. This, combined with a bearish landscape, may make for tough sledding in KLIC shares. And the sledding was tough for the stock in 2022, down more than 38% for the year-to-date in October. 2022 was certainly been one of the most difficult years for semiconductor stocks in recent memory. But for intrepid investors, it may represent what history will show was one of the greatest buying opportunities ever. There’s also the continued digitization of industrial economies – which drives the growth in cloud computing, which drives data center spending, which drives the demand for more and more semiconductors.
Marvell Technology
Here are a few tips on how to buy blue-chip stocks and build a winning portfolio. And keep in mind that many of these companies increase their dividends every year. The Coca-Cola Company has paid dividends to investors for over 120 years, since 1893. Blue chips get their name from the game of poker, where a blue chip has the highest value and is the most attractive to players. And their strength and reliability make them compelling investments for investors of all experience levels, from beginners to experts.
Semiconductor supply companies face a big concentration as there are a limited number of customers big enough to service the foundries and related companies. So, when one or all of these customers face troubles, it can spell trouble for KLA too. Though Taiwan Semiconductor (TSM) and Advanced Micro Devices (AMD) are still growing, for example, Nvidia’s (NVDA) sales were flat in the most recent quarter.
The company designs and manufactures analog and embedded semiconductors. Its customers include companies in the personal electronics, automotive, industrial and communications sectors. GlobalFoundries has grown 9.85% year to date, from $51.70 at the beginning of the year to $59.40 on June 8.
For a company with a market cap of around $53 billion, this is a big number. Thanks to industry consolidation, Applied’s business model has become far less cyclical than in times past. Revenue has been steadily on the rise for years, and so have profit margins; the company’s operating profit was more than 30% in 2022. Many countries are trying to establish more localized chip fabrication capabilities because of the COVID-19 pandemic. CHIPS Act and the European Chips Act have tens of billions of dollars earmarked to expand chip manufacturing.
Weak orders overshadowed good results last quarter, and we maintained our fair value estimate on the stock. Cisco stock is 11% undervalued relative to our $56 fair value estimate. The largest drugmaker on our list of the best blue-chip stocks to buy, Roche stock trades 29% below our fair value estimate of $57. The company’s drug portfolio and industry-leading diagnostics provide significant competitive advantages and underpin our wide economic moat rating, says Morningstar strategist Karen Andersen. “This Swiss healthcare giant is in a unique position to guide healthcare into a safer, more personalized, and more cost-effective endeavor,” she notes.
The A800 has the same processing power of its flagship A100 chip, but has a narrower interconnect bandwidth to receive data from other chips, which is critical for AI applications. Specifically, while the A100 can send data at 600 gigabytes per second, the A800 can only transmit data at 400 gigabytes per second. Kulicke and Soffa Industries (KLIC, $47.66), which provides semiconductor manufacturing equipment and services, had stellar 2021 results. These comparisons have made more recent results look not quite as good.
Its forward non-GAAP P/E multiple of 10.80 is 47.3% lower than the industry average of 20.47. PLAB, along with its subsidiaries, manufactures and sells photomask products and services in the United States, Taiwan, China, Korea, Europe, and internationally. Beyond what is stated above, we’ve also rated TSEM for Growth and Value. TSEM’s forward EV/EBITDA of 6.71x is 52.6% lower than the industry average of 14.15x. Its forward Price/Book multiple of 2.01 is 48% lower than the industry average of 3.86.
Funds tied up in unsold units could affect its earnings and cash flow. Nvidia’s (NVDA, $277.49) share price has been on a roller-coaster ride over the past 12 months. The stock was down more than 61% for the year-to-date in October 2022, after the U.S. government initiated new restrictions on chip exports to China.
In the stock market, blue-chip companies are the largest, most valuable and most desirable stocks available on the stock market. For those investors blue chip stocks can be a viable alternative. Having a few of these stocks in your portfolio, even if they occupy a very small percentage, can help offset the gut-churning volatility that can affect every investor’s actual risk tolerance. Blue-chip stocks tend to be among the most stable, best-performing stocks available to retail investors. These stocks allow investors to buy shares in stable companies that have a large market capitalization. While blue chip stocks are appropriate for use as core holdings within a larger portfolio, they generally shouldn’t be the entire portfolio.
Semiconductor stocks have struggled for the greater part of the past year, but all the drivers remain in place for success once the macro clouds clear. The chipmakers power much of the world’s technology, making it possible for loved ones to talk face-to-face from across an ocean or for Wall Street to move billions of dollars in the blink of an eye. Moving operations to the cloud is the way of the future for many companies.