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After Apple … the 3 Next-Best Blue-Chips

These 3 companies have made gains dwarfed only by Jobs' empire

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You just can’t go wrong with Apple (NASDAQ:AAPL) stock these days. Just look at these recent returns:

  • 50% gains for AAPL stock in the past year
  • 120% gains for AAPL in the past two years
  • 190% gains for AAPL in the past three years
  • 455% gains for AAPL in the past five years
  • 4,600% gains for AAPL in the past 10 years

Given the dominant nature of the gadget giant, the $12 billion in cash on its balance sheet and its track record of innovation, it’s easy to see why a great many investors agree that Apple simply is the best stock out there.

But if you want diversification, you can’t put every cent in Apple alone. Where else, then, should you stash your cash?

Even though there aren’t a lot of other growth options out there — and certainly no large-caps that have the explosive potential of Apple — there are a handful of other blue-chip stocks that are incredibly attractive buys. If you already own Apple and are looking for other investments to fill out your portfolio, consider these picks as the second-best stocks to buy right now behind the Silicon Valley superpower:

McDonald’s

McDonalds After Apple ... the 3 Next Best Blue ChipsMcDonald’s (NYSE:MCD) isn’t quite as dramatic as Apple when it comes to stock performance. The company has “only” doubled since 2007 and “only” tripled since 2005 — compared with 330% gains since 2007 and 900% gains since 2005 for Apple.

But you have to admit, those gains still are incredibly impressive — especially for a mammoth blue chip like McDonald’s that is dominant worldwide.

Also worth consideration is the fact that, since 2007, McDonald’s has paid dividends totaling $9.26 per share. Since McDonald’s stock was trading around $45 four years ago, that means on top of doubling your money via the share appreciation, you would have gotten back about 20% of your initial investment via dividends alone. Or if you reinvested those funds, you really could have supercharged your returns even more.

Looking forward, McDonald’s shows no signs of slowing down. It has surpassed analysts’ expectations in four of its past five earnings reports, most recently with second-quarter numbers boasting a 15% increase in profits. While its revenue has risen at a modest 3.6% annual rate during the past five years, net income has surged at a 14.6% annual rate — proving MCD can maintain margins and grow profits even if sales don’t soar.

McDonald’s, like Apple, knows how to deliver small-cap gains despite its blue-chip size. That makes this pick a keeper.


Article printed from InvestorPlace Media, http://investorplace.com/2011/09/apple-blue-chip-stocks-to-buy-ibm-mcd-visa/.

©2014 InvestorPlace Media, LLC

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