Buying blue-chip stocks usually comes with the idea that you’re not really going to be wringing all the best out of growth in the markets.
You get big, diversified companies that are built for stability rather than speed.
But nothing can be further from the truth.
First, there is now a shift from growth to value stocks going on with institutional investors. And they represent a vast majority of the trading happening day to day.
These kinds of rotations into one sector and out of another are massive. And this one presents a great opportunity for smart investors to buy big, quality stocks that will now get a significant tailwind from this new sector rotation.
Second, many of these blue-chip stocks are already on fire because they represent the best in their industries and during the pandemic they have continued to be market leaders. Others are part of significant trends that have been in place and will continue to grow.
The eight most reliable blue-chip stocks in the market today won’t be surprises, but they are important stocks to own.
- Amazon (NASDAQ:AMZN)
- Apple (NASDAQ:AAPL)
- Microsoft (NASDAQ:MSFT)
- Dollar General (NYSE:DG)
- AbbVie (NYSE:ABBV)
- Walmart (NYSE:WMT)
- Visa (NYSE:V)
- Procter & Gamble (NYSE:PG)
Here’s a look at what makes each a dependable investment today.
Blue-Chip Stocks to Buy: Amazon (AMZN)
Unless you have been living under a rock for the past decade, you have a good idea what a massive force this company has been, not only for retail, but also in the cloud computing space.
Remember, that even today, its Amazon Web Services (AWS) division makes up a lion’s share of the company’s overall operating profits and it continues to outpace the growth of the overall company.
Combine that with the massive revenue the retail and advertising sectors add and you have massive, cash-rich juggernaut.
And during the pandemic lockdowns, AMZN demand grew significantly. AMZN stock is up 63% year to date for good reason. And that momentum hasn’t slowed.
This beacon of consumer electronics companies has finally become a media contender. By that, I mean Apple TV.
The challenge with creating a “walled garden” of equipment and software (i.e., Apple products support Apple devices) is that when you want to break out into the broader world of non-Apple consumers, it can be tough slogging.
But the pandemic certainly helped Apple pull this off. And a good amount of new programming that has critics talking about its quality content has helped as well.
Add to that the recent ruling in Ireland that Apple doesn’t owe $14 billion in taxes will be a boost to its bottom line.
The stock is up 33% year to date and 90% in the past 12 months, pretty good for company with a $1.7 trillion market cap. And AAPL stock still has a 2.7% dividend.
It’s hard to believe that in the era of disruptive technology companies, which always includes Microsoft, it has been an industry leader since 1975 when it inked its first contract with Big Blue, aka, IBM (NYSE:IBM).
At the time, IBM was master of all it surveyed. Times have certainly changed, but they have continued to change for the better for MSFT stock.
Its software got it to the party, but since then it has added hardware that is now competitive with the best hardware makers around, including on the gaming front.
And its transition to a recurring model has really been a gamechanger, especially in the current uncertain climate.
MSFT stock is up 30% year to date and delivers a nearly 1% dividend.
Dollar General (DG)
This chain of retail stores has been around since 1939. It has an excess of 16,000 stores in more than 45 states.
If you haven’t seen or visited a Dollar General it’s likely because you live in the big city. These stores are built to service more rural communities outside the big city centers.
That gives them very little competition since even the big box retailers can’t touch every small community, but have to find strategic locations where they can draw on a number of small communities. This also makes it one of the most enduring blue-chip stocks to watch today.
Dollar General stores are in those towns. So, consumers may drive 45 minutes to a big box store on the weekend to do grocery shopping, but to grab a light bulb or some snacks or laundry detergent, the Dollar General is around the corner.
And the pandemic has boosted DG’s operations significantly. Not only are the stores convenient, but they’re small, so you don’t spend all day exposed. Plus, the prices are low, which helps if you’re one of the tens of millions who have lost your job.
DG stock is up 22% year to date and has a 0.8% dividend.
No, ABBV doesn’t have a leading candidate for a Covid-19 vaccine.
It has one better. It has the top-selling drug of all time. Humira.
And that isn’t the only arrow in its quiver. But in just the past 3 years, Humira brought in nearly $20 billion — a year. That isn’t a blockbuster, that’s a city buster.
Usually, a blockbuster is a drug that can do $1 billion or more a year. AbbVie has four of them, with others close behind, making it one of the premier biopharmaceutical names among all the blue-chip stocks to consider.
It has a huge pipeline of approved drugs on the market, as well as more drugs in the pipeline. That is what’s key when looking at pharmaceutical companies.
ABBV stock is only up 12% year to date, while the dumb money chases a Covid-19 vaccine. And it’s trading at a modest price-to-earnings ratio of 17x.
Walmart is the biggest retailer in the world when it comes to brick-and-mortar stores. Although, if you include online shopping, Amazon is the champ.
But Walmart is doing everything it can to cover that ground as well. This month it’s planning to launch its full attack on Amazon Prime, with Walmart Plus. This service is expected to offer free same-day shipping of groceries and products, early access to sales, discounts to gas at Walmart gas stations and (for some) free 2-hour delivery access.
All that for an annual fee of $98. Prime costs about $20 more a year.
This is going to be a very interesting holiday season as the two U.S. retail titans vie for primacy.
WMT stock is up 11% year to date and has a 1.6% dividend.
This payments services firm has been around since 1958, and is really the reason credit and debit cards exist today. That history has helped ensure its placement among the top blue-chip stocks to buy today.
Initially credit cards were issued by banks and vendors that partnered with the issuing banks. Visa was a group of California banks that got together to issue a card that could be used across the state.
And then the concept grew into a national organization.
But that isn’t why V stock remains a major player today. The innovation that was at the core of its birth has remained and that innovation today means Visa is one of the leading companies in the digital banking revolution.
Remember, Visa is not a bank. It allows consumers to buy on credit and then holds that transaction for the banks until the consumer pays. It makes money off the consumer transaction as well as a fee from the bank for assuming some of that risk.
The play here is it’s dominance in one of the biggest financial trends that’s occurring right now: the digitization of banking.
V stock is up 3% year to date and offers a 0.6% dividend.
Procter & Gamble (PG)
If you’re a company that has been around since Houston, Texas was founded, U.S. troops were still fighting the Second Seminole War in Florida, the Panic of 1837 happened, and Martin van Buren took over the presidency from Andrew Jackson, you’re one of a very select few.
And staying in business for 183 years makes you the kind of business that has products that are necessary and demanded in good times and bad.
What’s more, through those good and bad times, you continued to deliver both growth and safe, reliable dividends for your investors. That’s Procter & Gamble.
If you’re looking for a rock-solid, long-term growth stock, PG stock should be on the top of that list. Its collection of consumer staples, like Pampers, Charmin, Bounty, Oral B, Braun, Gillette, Tide and many others, are a testament to its dominance in the U.S. (and global) marketplace.
Its consolidation of brands that has been going on in recent years, has only strengthened its position.
The stock has had less attention in recent months as sexier stocks have prevailed. But that doesn’t mean it has lost any of its long-term potential or value.
PG stock is about break even year to date and has a 2.5% dividend.
As of this writing, Gregg Early didn’t hold a position in any of the aforementioned securities.