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Newly Blue: 5 Blue-Chip Stocks to Buy

These stocks have every reason to be considered blue chips

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Blue-Chip Stocks to Buy: Cisco (CSCO)

blue chip stocks to buy cisco stock Some investors are happy to place the label of blue chip stock on IBM (IBM), but for some reason similar enterprise technology companies don’t enjoy the same status in their eyes.

That’s nonsense. Even though IBM is (ostensibly) over 100 years old, a company like Cisco (CSCO) shouldn’t be denied the same label just because it doesn’t have the same age.

Consider that Cisco is worth over $125 billion in market capitalization, and has operated since the 1980s. Oh yeah, and after Citigroup (C) and General Motors (GM) were booted from the Dow Jones Industrial Average thanks to the financial crisis, they were replaced by this relatively young tech stock in the flagship stock market index.

And despite criticism in recent years about how the company foolishly chased consumer products like the Flip video camera and is losing out in the new era of tech, CSCO happened to be No. 1 in cloud computing infrastructure market share last quarter — beating out Hewlett-Packard (HPQ) and IBM.

Cisco only recently began paying dividends, starting in 2011. But those dividends have tripled in short order from 6 cents quarterly to 19 cents per quarter currently. That’s good for a 3.1% yield.

Critics will say that CSCO stock has been very sleepy and has gone nowhere since its dot-com bust. But remember, blue-chip stocks are about stability and not explosive moves. The slow-and-steady nature of Cisco for the last 10 years actually proves pretty well why this stock should be included in the conversation of new blue chip stocks.

Jeff Reeves is the editor of and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at or follow him on Twitter via @JeffReevesIP

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