- As concerns over a looming recession grow, these are some blue-chip stocks to buy that could help decrease portfolio volatility.
- 3M (MMM): The recent purchase of LeanTec could improve long-term growth projections
- Amgen (AMGN): A new manufacturing facility in North Carolina could help expand revenue and drive down costs.
- Boeing (BA): Relocating headquarters close to Washington, D.C. signals a shift to defense technologies.
- JP Morgan Chase (JPM): Investments in cloud-based share management technology could provide significant growth opportunities ahead.
- Microsoft (MSFT): Acquisitions into metaverse related technologies could help grow revenues.
Blue-chip stocks to buy, our topic today, are in the limelight thanks to their overall financial stability. Yet, despite their excellent reputation, most have not been immune to the extreme volatility on Wall Street. However, these corporate giants are still among the best-positioned companies to weather the coming storm.
Research by Barclays (NYSE:BCS) suggests blue chips “are well-established, nationally recognized businesses with strong balance sheets to help them weather any downturn.” Most blue-chips are also known for their stable dividends. And S&P Global (NYSE:SPGI) highlights “U.S. stock dividends are forecast to hit record highs this year.” Therefore, those who seek dividend income are looking at blue-chip shares closely.
So far in 2022, fears of an impending recession have compounded investor concerns over high inflation and rising interest rates. As a result, the S&P 500 index has dropped over 17% year-to-date (YTD), while the Dow Jones Industrial Average index has declined 12% during the same period. In comparison, the NASDAQ Composite index has tumbled 28%.
Historically, blue-chip companies have weathered economic downturns better than smaller ones. Consequently, investors typically flock to these well-established bastions to safeguard against a potential bear market.
With that information, here are 5 blue-chip stocks to buy that provides safe haven in May.
Blue Chip Stocks to Buy: 3M (MMM)
The first of the blue-chip stocks to buy on our list for today is 3M (NYSE:MMM), the multinational conglomerate that operates in industry, safety, health care, and consumer goods segments. The company produces some 60,000 products under various well-known brands, including Scotch, Post-It, and Ace.
In late April, 3M released Q1 results. Sales came in at $8.8 billion, down 0.3% year-over-year (YOY). Adjusted earnings per share (EPS) declined 10% to $2.65, compared to $2.95 the year before. Free cash flow (FCF) was $700 million.
Also in late April, 3M announced it acquired technological assets from LeanTec, an inventory management company for vehicle repair shops. Management plans to integrate the technology into its existing 3M RepairStack Performance Solutions, improving inventory management and streamlining repair services.
MMM stock has declined 15% YTD. Shares are trading at 13.87 times forward earnings and 2.46 times trailing sales. At present, the dividend yield is 3.99%, and the 12-month median forecast stands at $161.00.
Next on our list is the biopharma giant Amgen (NASDAQ:AMGN). It manufactures over two dozen medications for various illnesses, including heart disease and cancer.
In late April, Amgen announced Q1 results. Revenue increased 6% YOY to $6.24 billion. Diluted EPS was $4.25, up 15% from $3.70 the year before. FCF was $2.0 billion for the quarter.
Recently, the company broke ground on a new manufacturing facility in North Carolina. It will use state-of-the-art manufacturing technology to maximize efficiency and lower costs. This facility is slated to begin production in 2027.
AMGN stock has dropped about 3% over the past 12 months but has appreciated 8.9% YTD. Shares are trading at 13.19 times forward earnings and 5.04 times trailing sales. The dividend yield is 3.19%, and the 12-month median forecast is at $245.00.
Blue Chip Stocks to Buy: Boeing (BA)
Boeing (NYSE:BA) is one of the world’s largest aerospace and defense (A&D) companies, and manufactures the 7X7 series commercial airplanes. More than 10,000 Boeing aircraft are currently in service, representing almost half of all commercial planes used today.
In late April, Boeing issued the Q1 report. Revenue was $14 billion, an 8% decrease from the year before. Diluted loss per share was $2.75, compared to a loss per share of $1.53 the year before. FCF was -$3.56 billion.
At the beginning of May, Boeing announced it was relocating its global headquarters to Arlington, Virginia, just outside of Washington, D.C. According to management, the move gives Boeing increased access to customers, shareholders, and top engineering talent. Additionally, the company plans to build a new research and development hub, also in northern Virginia.
BA stock has plunged almost 37% YTD. Meanwhile, shares are trading at 33.90 times forward earnings and 1.25 times trailing sales. The 12-month median forecast stands at $225.00.
JP Morgan Chase (JPM)
Our penultimate blue-chip stock pick is JP Morgan Chase (NYSE:JPM), one of the world’s oldest, most well-established financial institutions. It operates through four segments: Consumer & Community Banking, Corporate & Investment Banking, Commercial Banking, and Asset & Wealth Management. The company manages over $2.6 trillion in assets in over 100 countries.
In mid-April, JP Morgan Chase reported Q1 earnings. Revenue totaled $31.6 billion, compared to -$1.5 billion the year before. Diluted EPS turned positive at $2.63, compared to a loss of $1.87 the previous year.
Recently, the financial services group announced the acquisition of Global Shares, a provider of cloud-based share plan management name. Analysts concur the transaction will mean new technologies for clients in wealth management.
JPM stock has declined 24% YTD. Shares are trading at 10.54 times forward earnings and 2.98 times trailing sales. The current price supports a dividend yield of 3.36%, and the 12-month median forecast stands at $150.63.
Blue Chip Stocks to Buy: Microsoft (MSFT)
The final stock on today’s list is the tech behemoth Microsoft (NASDAQ:MSFT). Its products include the Windows Operating System, Microsoft Office, Surface computers, Azure cloud computing, Xbox gaming consoles, and Xbox Game Studios.
In late April, Microsoft released Q3 FY22 report. Revenue was $49.4 billion, representing an 18% increase YOY. Diluted EPS was $2.22, compared to $2.03 the previous year.
Recently, the company announced the acquisition of Minit, a process mining technology company. Minit uses technology to improve efficiency and improve various processes in small businesses. Additionally, Microsoft completed the acquisition of Nuance, which focuses on speech recognition and artificial intelligence.
MSFT stock has lost around 20% YTD but has gained more than 8% in the last 12 months. Shares are trading at 24.21 times forward earnings and 10.25 times trailing sales. The dividend yield is 0.95%, and the 12-month median forecast is $360.00.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.