Most investors want big rewards, but not the big risk that can come along with them.
Unfortunately, that’s not always easy, especially in times of uncertainty. But don’t worry. Even in times of chaos, some of the safest stocks to own are blue-chip companies. These are the best-of-the-best in terms of industry leaders. They have a history of growth and returning cash to shareholders.
In fact, here are three of the top blue-chip stocks to watch in the new year.
Blue-Chip Stocks to Buy: Microsoft (MSFT)
One of the top blue-chip stocks to buy is Microsoft (NASDAQ:MSFT).
Up over 55% in the last year, Microsoft has remained a strong investment. In recent months, the company reported first-quarter earnings that beat expectations with earnings per share of $1.38 on sales of $33.1 billion. In the year prior, MSFT earned $1.14 a share on sales of $29.1 billion.
The company boosted its quarterly dividend by 11% to 51 cents a share. The board of directors also just approved a new buyback program, authorizing up to $40 billion in share repurchases.
And Wedbush analyst Dan Ives just reiterated an “outperform” rating on the stock with a price target of $185, raised from $170 a share. Again, that’s thanks to the growth of the company’s cloud business.
“Microsoft remains in an enviable position heading into 2020 on the heels of its cloud success as it continues to fire on all cylinders around its Office 365 and Azure strategic vision,” Ives wrote in his research note. He also said customers see “a clear acceleration of larger and more strategic enterprise cloud deals as Redmond is poised to win the majority of the next phase of cloud deployments vs. the likes of Amazon and [Amazon CEO Jeff] Bezos.”
Apple (NASDAQ:AAPL) could take a big bite out of 2020.
Up 100% in the last year, Apple is still a powerful investment thanks to the coming 5G iPhones and the potential for more buybacks. Analysts at Bank of America and RBC Capital for example just raised their price targets to $330 a share. CFRA analyst Angelo Zino reiterated his “buy” rating with a target of $330.
He believes Apple’s December quarter results will again beat expectations, “given healthy demand trends for the iPhone 11 as well as improving demand in China.”
Needham analysts Laura Martin and Dan Medina just raised their price target to $350 from $280 a share. Apple has numerous upside factors. The duo cite its compensation structure, relationships with wealthy consumers and its “gatekeeper” status.
In early 2019, Apple boosted its dividend by 5% after increasing it by 16% in 2018.
With Apple’s strong financials, earnings growth and 5G catalysts, it’s unlikely the AAPL stock will go anywhere but up.
Over the last year, shares of Medtronic (NYSE:MDT) stock are up 41%.
MDT is one of the world’s biggest makers of medical devices with more than 4,500 patents. Medtronic is probably one of the safest healthcare stocks on the market, and it has been steadily increasing its dividend for decades. At the moment, MDT pays a dividend yield of 1.9%.
Better, earnings remain strong. The company just beat quarterly profit estimates thanks to “strong performance in its unit that makes surgical instruments.”
Its minimally invasive therapies business saw revenue of $2.14 billion, which was ahead of estimates calling for $2.13 billion. Net sales of $7.71 billion beat estimates for $7.66 billion. And it now expects to post 2020 adjusted profits of $5.57 to $5.63 a share, which is up from a previous forecast for $5.54 to $5.60.
Analysts were only looking for 2020 EPS of $5.56.
As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.