However, organisations might be considered ‘blue-chips’ if they have a huge market capitalisation, an established reputation, and a strong history of growth. Blue-chip investments are generally considered low risk, and have a reputation for delivering reliable returns. This is probably one of the reasons why legendary investor Warren Buffet enjoys stocking up on blue-chips. Blue-chip stocks are not immune to crashes or bankruptcy, but such occurrences tend to make the headlines. As these stocks are primarily owned by the investing public, if there is some bad news in the market, it could cause substantial damage to the share price.

• Investment is an activity to invest an asset to obtain a greater profit.
• This is another advantage of holding large-cap shares, which ties into the fact that blue-chips are often a safe bet when it comes to meeting investor expectations.
• Blue-chip stocks are stocks that are classified as main shares on the listing board on the IDX.
• Later in the same month, UBS has had to buy out Credit Suisse given substantial capital flight in the latter in recent quarters.

The Service Center Based Distribution segment includes revenue from the local service centers and businesses from scheduled maintenance and repair of their customers’ machinery, equipment, and facilities. The Fluid Power & Flow Control segment specializes in selling hydraulic (water pressure) and pneumatic (air/gas pressure) technologies, specialty flow control products, and automation products. Retail net sales grew 5.6% to $259 million, while Foodservice net sales were 19.2% higher at $219 million. Retail sales saw favorable inflationary pricing impacts, as sales volume declined 3.8%. In Foodservice, sales volume fell 4.6% as the company exited certain businesses during fiscal 2022. Lancaster reported second-quarter earnings on February 2nd, 2023, and the results were somewhat mixed.

Investing Principles: Top 5 Principles to Investing

Earnings-per-share rose from $1.25 to $1.45 year-over-year, and we see $6.05 for 2023. However, blue-chips are popular among investors, especially older or more risk-averse investors, because of their reliability. That doesn’t mean they’re immune to market downturns, but it does mean they’ve shown a history of weathering these storms and bouncing back. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence.

It was founded in 1939 and offered over 100,000 metal products (including alloy, aluminum, brass, copper, steel, titanium, etc.) across its ~315 locations. The company has a degree of recession resiliency, as it has remained profitable every year since its IPO in 1994 and is well-positioned to benefit from global supply shortages. Blue-chip stocks cut across various industries and some notable ones include Walmart, American Express, Nike, Microsoft, Home Depot, JPMorgan Chase and Exxon Mobil. Just about any group you can think of has its all-stars that lead the rest of the pack (think baseball).

Best-Performing Blue Chip Stock #9: Merck & Co., Inc. (MRK)

White chips are often the least valuable, maybe representing just $1 per chip. The color blue signifies the chip that has the highest value on the table. This term was thus taken from the poker world and put to use as stock market terminology.

The study aims to describe two dimensions of the buyers’ behavior, when they buy shares that do not lead to the control of the target companies (below 50%). The result shows that investors buy small shares in blue chip companies, compared to other companies, taking into account their performance and the audit opinion on the annual financial statements. Blue chip, stock of a large, long-established, and well-financed company, regarded as a sound investment and usually selling at a high price relative to its earnings.

blue chip

A blue chip company can be a multinational firm that has operated successfully for a number of years, is a dominant leader in its industry, and is widely recognized. Blue chip companies operate profitably despite adverse economic conditions, which helps to contribute to their long records of stable and reliable growth. Blue chips are established companies that are generally well known and that have substantial competitive advantages. Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications.

When many investors sell aggressive growth stocks and purchase blue-chip ones, we call it a flight to quality. Blue chip companies are businesses that investors see as reliable and profitable. Not only do these companies operate profitably in good times but also in bad times. In other words, they are large and extremely creditworthy businesses. Today it is one of the most valuable companies in the world and controls electronic money transfers across all six continents.

Other Blue Chip Stock Resources

Such companies are known for slow but stable growth in their earnings and dividends and are, therefore, favoured by conservative investors. The term (a reference to blue poker chips, which usually have the highest value) has become a general expression for superior quality or prospects. Investment is an activity to invest an asset to obtain a greater profit. The investment there’s in great demand by investors are stock investments. Based on market capitalization, stocks are classified into first-tier, second-tier, and third-tier stocks. Stocks that have the highest market capitalization are first-tier or blue-chip stocks.

• Extensive coverage makes it way easier for investors to become aware of the companies’ major events and updates, which may influence their share price.
• More specifically, the stocks of companies with a market capitalization of at least $5 billion.
• This allows you to find a good fit while the program does much of the hard work for you.
• Although there could be more downside in the near term, many leading blue chips could do well in the long term as the U.S. economy and global economy continues to grow.
• After shifting away from housewares, Lancaster Colony has been making food products since 1969.
• Our partners cannot pay us to guarantee favorable reviews of their products or services.

One company will focus on consumer health products, considered the weaker segment of J&J’s business. The other will contain its highly regarded pharmaceuticals and medical devices segment. Some well-known blue-chip technology stocks include Apple Inc., Microsoft Corporation, and Alphabet Inc. (the parent company of Google).

Incorporating Blue-Chip Stocks Into an Investment Strategy

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