Since Visa makes its money on transaction fees, the company performs well when spending rises. That’s a good thing, since the economy generally grows more than it contracts. Higher prices raise average transaction values, which in turn generates more fees. UnitedHealth is one of the largest healthcare companies in the U.S., thanks to a string of acquisitions that have added depth and diversity to its operations.
10 Best Blue-Chip Stocks to Buy for the Long Term – Morningstar
10 Best Blue-Chip Stocks to Buy for the Long Term.
Posted: Tue, 06 Jun 2023 14:31:23 GMT [source]
We have focused on large-cap equities that have a long-term record growing profits and dividends, plus a reasonable valuation. 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.
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These funds contain a curated collection of investments and allow you to purchase a large selection of stocks in one transaction. It’s easy and instant diversification — at least, of course, among blue-chip companies. As befits the sometimes high-risk nature of stock picking, the term “blue chip” derives from the card game poker. The simplest sets of poker chips include white, red, and blue chips, with American tradition dictating that the blues are highest in value.
In other cases, the funds or ETFs might be focused exclusively on blue chips, such as an ETF that tracks the Dow Jones Industrial Average (which comprises 30 of the largest blue chip stocks). However, just about every investor can benefit from having a portion of their portfolio invested in blue chip stocks. It doesn’t have to be a set percentage; different investors will have different viewpoints about how much risk they want to assume. Long-term investors own blue chip stocks because of their wide moats, dependable dividends and steady earnings. They can lend a stock portfolio ballast during periods of market turbulence.
What is a Blue Chip Stock?
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- The purpose of the watchlist is to develop a list of the stocks you want to build positions in and then keep track of them, waiting for opportune entry points.
- A generally accepted benchmark is a market capitalization of $10 billion, although market or sector leaders can be companies of all sizes.
- Coca-Cola (KO -0.43%) has been a leader in the beverage industry for more than a century as its namesake soft drink spawned a global empire.
- Nonetheless, blue chips can play an important role in a portfolio.
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 https://forexhero.info/top-8-python-libraries-for-natural-language/ confidence. The Exploration and Production segment is Canadian Natural’s core business, while the other two businesses provide a nice diversification.
Top 10 Canadian Blue Chip Stocks
I identified around 50 blue chip stocks from the Toronto Stock Exchange. Investors seeking exposure to those companies considered most valuable often turn to indexes as a way to slice a piece of the blue-chip pie. Exchange-traded funds and index (mutual) funds focus provide an entry point into blue-chip investing without the cost-prohibitive price. Blue-chip stocks provide a way to invest in stable, good-performing corporations with minimal risk. Its streak of consecutive annual dividend payment increases dates back to the early 1960s, a track record placing it among the top 10 dividend stocks on the market.
- Reinvesting dividends is a solid strategy that can boost total return and deliver the benefit of compounding.
- Since both chains are known for competitive pricing, the company as a whole may benefit if the U.S. falls into recession later this year.
- After making the first buy, go back to step two and repeat the process.
- As noted above, blue-chip stocks are generally, but not always, household names.
People who prefer not to pick stocks are also typically invested in blue chip stocks if they own broad-market funds. Investors can add new stocks they find or become interested in and also cut out any that don’t maximize the portfolios’ goals. What makes the right blue chip stocks depends on the investor, the goal of the portfolio and the allocation targets for holdings. A $1,200 stock may be attractive for many reasons, but the price is so high it may be a problematic fit for smaller portfolios.
Should I buy blue-chip stocks?
NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. Intact Financial Corporation is the largest provider of property and casualty insurance in Canada and a leading provider of specialty insurance in North America. The company’s popularity can be gauged from the fact that about one in every five Canadians is a customer of Intact Financial products and services. The bank has five business segments – personal & commercial banking (49% of earnings), capital markets (21%), wealth management (18%), insurance (7%) and investor & treasury services (5%).
The trend reversed in 2022, as the company faced cost inflation and negative currency trends. Even so, PG continues to produce lots of cash–enough to fund $8.8 billion in dividends and $10 billion in share repurchases in fiscal year 2022. Dividends are a more definite and predictable source of return than stock price appreciation. Once the dividend payment is in your account, it’s yours—and you didn’t have to sell the stock in the process. A quick comparison between the DJIA and the S&P 500 over different time frames demonstrates how this can play out. Over the past year—a tough time for investors–the DJIA’s total return with dividends reinvested is 0.36%, compared to a loss of -5.31% for the S&P 500.
What you may find interesting is that many of the Canadian Dividend Blue Chip Stocks also trade on the NYSE as cross-listed stocks. Please note that from a market capitalization perspective, none of the Canadian REITs have made it on the list below. Stay on top of your next investment decision with the Dividend Snapshot Screeners. Review the Chowder Rule along with the 3, 5, and 10 year ratios for dividend growth, EPS growth and the payout ratio to pick a solid investment for your portfolio.
