While most financial advisors may direct you to blue-chip stocks to buy now, the problem with this well-meaning concept is that everybody else also has the same idea. Because of their massive footprint, these high-profile companies feature transparent, predictable businesses. However, the other side of this relationship centers on a decided lack of upside potential.
Nevertheless, every now and then, some top enterprises slip under the radar. Here, the best blue-chip stocks for 2023 might not always be generating headlines. Or if they do, those headlines might not be the most encouraging for prospective investors. Still, underneath the hood lie compelling operations that may yield significant rewards. In other words, you can have your cake and eat it too. For risk-averse investors, these are the blue-chip stocks with strong fundamentals to consider.
Lam Research (LRCX)
An American supplier of wafer fabrication equipment and related services to the semiconductor industry, Lam Research (NASDAQ:LRCX) easily ranks among the hidden-gem blue-chip stocks to buy now; that is, of course, you’re one of those experts on wafer fabrication equipment. Lam’s quiet, everyday relevance for critical semiconductor industries launched LRCX to a nearly 21% return so far this year. In the past 365 days, it’s up over 9%.
Financially, what makes Lam an all-around strong candidate for best blue-chip stocks for 2023 is consistency. As data from Gurufocus.com demonstrates, Lam is consistently profitable. As well, it features a three-year revenue growth rate of 26.6%, above 81.77% of sector players.
Enticingly, LRCX also ranks among the blue-chip stocks with low risk and high reward. At present, the market prices shares at a forward multiple of 17.61. As a discount to projected earnings, Lam ranks better than 61.19% of the competition. Finally, Wall Street analysts peg LRCX as a consensus moderate buy. On average, the price target is $545.06, implying 9% upside potential. However, the most optimistic target calls for $600 or up 20%.
Marathon Petroleum (MPC)
A relatively easy case for blue-chip stocks to buy now, Marathon Petroleum (NYSE:MPC) specializes in petroleum refining, marketing, and transportation. The former two components represent the downstream segment of the hydrocarbon energy value chain whereas the latter aligns with the midstream segment. Fundamentally, the possible rise in energy prices due to broader oil production cuts cynically augurs well for MPC.
Another attractive feature for MPC is that it also ranks among the blue-chip stocks with strong fundamentals. Operationally, Marathon’s three-year revenue growth rate pings at 27.1%, outpacing 81.45% of sector rivals. Also, its free cash flow growth rate during the same period is 57.1%, above 85.28% of competitors.
Notably, investors can also consider MPC as one of the blue-chip stocks with low risk and high reward. Currently, the market prices MPC at a trailing multiple of 4.31. As a discount to earnings, Marathon ranks better than 71.79% of the competition. Lastly, analysts peg MPC as a consensus strong buy. Their average price target comes out to $150.85, implying over 22% upside potential.
Applied Materials (AMAT)
Headquartered in Santa Clara, California, Applied Materials (NASDAQ:AMAT) is a leader in materials engineering solutions. Enterprise-level clients use Applied Materials’ offerings to produce virtually every new chip and advanced display in the world, per the company’s website. Thanks to its powerful relevancies, AMAT deserves consideration as one of the blue-chip stocks to buy now. Since the Jan. opener, shares popped up over 14%.
Overall, AMAT also legitimately deserves the label of blue-chip stock with strong fundamentals. Anchored by a solid balance sheet, investors may focus on the company’s three-year revenue growth rate of 23.9%, which beats out 77.7% of other semiconductor firms. Also, its FCF growth rate pings at an impressive 21% during the aforementioned period.
Enticingly, the market prices AMAT at a forward multiple of 14.98. As a discount to projected earnings, Applied Materials ranks better than 66.42% of sector players. Also, it features a dividend yield of 0.92% and a low payout ratio of 13.2%, perhaps making it one of the blue-chip stocks with dividend growth. Turning to Wall Street, analysts peg AMAT as a consensus moderate buy. Their average price target hits $135.77, implying nearly 23% upside potential.
Based in Norway, Equinor (NYSE:EQNR) is an international energy company. Throughout its history, Equinor converted natural resources into energy. Now, it’s embarking on a broader transition to support clean and renewable initiatives. Over the intermediate term, the bullish dynamics of the hydrocarbon market may lift EQNR. So far, though, EQNR gave up 13% of its equity value since the Jan. opener.
Despite the turbulence, EQNR deserves consideration as one of the blue-chip stocks to buy now. Financially, the company benefits from robust stats. For instance, Equinor commands a cash-to-debt ratio of 1.22, above nearly 61% of sector peers. Operationally, it enjoys an impressive three-year revenue growth rate of 39.5%.
Also, what makes EQNR a candidate for the best blue-chip stocks for 2023 is the value proposition. Currently, shares run a price-earnings-growth ratio of only 0.11 times. In contrast, the sector median stands at 0.76 times. To close out, analysts peg EQNR as a consensus moderate buy. Their average price target lands at $37.05, implying 31% upside potential.
Taiwan Semiconductor (TSM)
Although it’s difficult to call Taiwan Semiconductor (NYSE:TSM) a candidate for hidden gem blue-chip stocks to buy now, it does make an intriguingly bullish case. First, let’s get address the giant pink elephant in the room. Due to worsening tensions between the U.S. and China, Taiwan Semiconductor operates in a geopolitical hotspot. Still, unless the Chinese government seeks to destroy its economy, it may play it cool regarding the breakaway island.
Financially, the company surprisingly delivers the goods because of its massive importance to the global semiconductor supply chain. Notably, TSM’s three-year revenue growth rate comes out to 28.4%, ranked better than 83.28% of its peers. Also, its FCF growth rate during the same period lands at an impressive 53%.
For all the heat, TSM is undervalued, making it one of the best blue-chip stocks for 2023. Presently, the market prices TSM at a forward multiple of 15.64, favorably below 64.18% of the industry. Looking to the Street, analysts peg TSM as a unanimous strong buy. Their average price target stands at $118.67, implying over 44% upside potential.
Rio Tinto (RIO)
A mining and exploration company, Rio Tinto (NYSE:RIO) deserves the label of hidden gem blue-chip stocks to buy now. Primarily, the company’s headquarters are located in the U.K., making it less likely to be known by the average American. Also, Rio’s core industry – metals mining and extracting – isn’t the sexiest in the world now dominated by memes. Plus, since the Jan. opener, RIO slipped almost 13%.
Taking the negativity aside, RIO makes for one of the best blue-chip stocks to buy for 2023 because of its core financials. Operationally, the company features a three-year revenue growth rate of 11.7%, outpacing 61.5% of its peers. On the bottom line, its trailing-year net margin stands at 22.31%, above 86.52%.
As a bonus, Rio Tinto is undervalued. The market prices RIO at a forward multiple of 8.48. As a discount to projected earnings, the mining specialist ranks better than 68.78% of the competition. Lastly, analysts peg RIO as a unanimous strong buy. Their average price target pings at $95.64, implying 54% upside potential.
While it’s not quite a hidden gem, biopharmaceutical firm Moderna (NASDAQ:MRNA) could be a hidden gem right now. With fears of the SARS-CoV-2 virus all but shriveled in the rearview mirror, nobody cares about the vaccine race. Well, I shouldn’t say nobody cares but the furor certainly subsided. Nevertheless, Moderna can leverage its acumen to develop more relevant solutions, making it a worthwhile idea.
For its long-term potential, MRNA should rank among the blue-chip stocks to buy now. As well, the finances bolster confidence in the bullish view. Currently, Moderna features an Altman Z-Score of 8.09, indicating high fiscal stability and a low risk of bankruptcy. Operationally, its three-year revenue growth rate shot up into the stratosphere.
Further, on the bottom line, the company prints a net margin of 44.3%, above nearly 96% of the competition. And it’s also technically undervalued, priced at only 6.76 times trailing earnings. On a final note, analysts peg MRNA as a consensus moderate buy. Their average price target stands at $221.92, implying almost 65% upside potential.
On the date of publication, Josh Enomoto 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.