SPECIAL REPORT The Top 7 Stocks for 2024

7 Blue-Chip Stocks to Buy and Hold Forever: November Edition

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  • McDonald’s (MCD): The Golden Arches consistently produces strong quarterly financial results. 
  • Visa (V): The credit card giant just raised its dividend another 16%. 
  • IBM (IBM): The legacy technology giant is getting a boost from its AI investments. 
  • Continue reading for the complete list of blue-chip stocks to buy and hold!
blue-chip stocks to buy and hold - 7 Blue-Chip Stocks to Buy and Hold Forever: November Edition

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As we enter November and market volatility continues, blue-chip stocks are looking like a good bet for investors. These are stocks of well-known companies, most of whom have been in business for decades and are leaders in their respective categories. Strong earnings, consistent growth, reliable dividend payments, and durable competitive advantages are just a few of the benefits that come with owning blue-chip stocks. These securities also tend to decline less in a market downturn and rebound quickly when stocks recover. With uncertainty continuing to reign over equities, now is a good time for investors to take positions in steady blue-chip names. Here are seven blue-chip stocks to buy and hold forever: November edition.

McDonald’s (MCD)

McDonald's restaurant in Thailand.
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McDonald’s (NYSE:MCD) never seems to disappoint and has certainly earned a position on this list of blue-chip stocks to buy and hold. The Golden Arches is about as reliable a blue-chip stock as an investor can hope to find. As is almost always the case, the quick service restaurant chain announced financial results recently that beat Wall Street expectations across the board. The company reported EPS of $3.19 versus $3 that had been expected among analysts. Revenue in the quarter ended Sept. 30 totaled $6.69 billion compared to $6.58 billion that was forecast. The company’s revenue rose 14% from a year earlier.

McDonald’s said that its global same-store sales grew 8.8% in Q3, beating estimates of 7.8%. The company’s U.S. same-store sales gained 8.1%. Successful marketing campaigns, a rise in digital delivery orders, and strategic price increases on food items yielded exceptional results. The company’s same-store sales in Asia, which includes both China and Japan, grew 10.5% in the most recent quarter. Looking ahead, McDonald’s said that the economic environment is unfolding in line with its expectations for the remainder of this year and heading into 2024.

MCD stock is flat on the year (down less than 1%), but has gained 50% over the past five years. The stock also pays a quarterly dividend of $1.67, giving it a yield of 2.55%.

HSBC Holdings (HSBC)

HSBC logo on corporate building
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HSBC Holdings (NYSE:HSBC) just crushed its Q3 print, announcing that its profit rose a 235% from a year earlier. The results were so good that the British bank announced a special dividend payment and a new $3 billion stock buyback program. The London-based financial giant said that its Q3 after tax profit amounted to $6.26 billion. This was up from $2.66 billion in the same period of 2022. Europe’s largest bank by assets said that its profit boost came from higher interest rates charged on the various loans it made. Revenue rose to $7.71 billion in Q3, up 139% from $3.23 billion a year ago.

Due to the strong financial results, HSBC’s board of directors approved a special dividend payment of 10 cents per share. The lender also initiated a new share buyback program of up to $3 billion, which is to begin immediately and be completed by the end of February 2024. HSBC has now announced three share buybacks in 2023 totaling $7 billion. Additionally, it announced three special dividend payouts that total 30 cents per share. While most bank stocks are in the red this year, HSBC stock is up 15%.

Chevron (CVX)

Chevron logo on blue sign in front of skyscraper building
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As an oil major, Chevron (NYSE:CVX) is, and will always be, subject to crude prices. This is a fact. And the ups and downs of crude oil prices impacted the company’s most recent earnings, which missed Wall Street expectations. The energy company announced EPS of $3.05, which was well below the $3.70 that analysts had forecast. However, Chevron did manage to beat expectations with its Q3 revenue, reporting sales of $51.9 billion compared to $51.4 billion that had been expected. Beyond the latest earnings, there are many reasons to view Chevron among the best long-term blue-chip stocks to buy and hold.

First, Chevron recently announced that it is acquiring former rival Hess Corp. (NYSE:HES) for $53 billion in an all-stock deal. The Hess acquisition will grow Chevron’s shale and deep water oil production. Second, Chevron is spending heavily to expand its oil and natural gas reserves and pivot to a low-carbon future. And third, Chevron pays a generous dividend that currently yields $1.51 per share for a yield of 4.17%. CVX stock has retreated along with crude oil prices for much of this year. So far in 2023, Chevron’s share price has declined 17%. This presents a buy the dip opportunity.

IBM (IBM)

Photo of IBM (IBM) building as seen through the canopy of a tree. IBM logo is in large letters on side of building.
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Don’t count out IBM (NYSE:IBM). The technology concern just reported third-quarter financial results that beat Wall Street forecasts on the top and bottom lines. For the quarter ended Sept. 30, IBM reported EPS of $2.20, which was better than the $2.12 forecast by analysts. Revenue in the July through September period totaled $14.75 billion, up 5% from a year ago, and better than the $14.73 billion that was forecast. Company executives said that the strong print was driven by the success of its artificial intelligence (AI) strategy. IBM has been making a big push into AI, and customers are increasingly adopting the company’s “Watson X AI” platform.

IBM executives said they earned hundreds of millions of dollars from generative AI projects in Q3, and suggested an annual run rate of about $1 billion. IBM’s Q3 results were also helped by growth in the company’s key software business unit, as well as a continued expansion of its consulting service and a strong performance from the mainframe business. The company reconfirmed its previous full-year guidance for revenue and cash flow. While IBM stock has lagged the market for years, it has gained 5% since the Q3 print. IBM also pays a quarterly dividend of $1.66 per share, which equates to a yield of 4.60%, among the highest of any tech stock.

Coca-Cola (KO)

KO stock PEP stock: a can of Coca-cola and a can of Pepsi on either side of a glass of brown soda and sitting on top of a pile of ice
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Like McDonald’s, soft drink maker Coca-Cola (NYSE:KO) is a steady name among blue-chip stocks to buy any hold. It always seems to deliver for its shareholders. The company’s Q3 results were reliably good and exceeded Wall Street forecasts. The Atlanta-based company reported EPS of 71 cents versus 69 cents that had been expected. Revenue came in at $11.91 billion compared to $11.44 billion that had been anticipated among analysts. The Q3 sales were up 8% from a year earlier. The company also raised its guidance for the rest of 2023, saying it expects EPS growth of 5% to 6% and revenue growth of 8% to 9%.

Somewhat ironically, KO stock has declined this year as investors worry about the company’s ability to continue raising prices without losing customers. Concerns over a new class of weight loss drugs and their potential impact on soft drink sales have pulled down the share price. However, neither of those issues have impacted Coca-Cola to date, and management suggested in their latest earnings call that such concerns are overblown. Like the other names on this list, Coca-Cola pays a nice dividend of 46 cents a share each quarter, for a yield of 3.26%. KO stock has fallen 10% on the year.

Visa (V)

several Visa branded credit cards
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Speaking of dividends, credit card firm Visa (NYSE:V) just raised its quarterly payment to stockholders by 16% following strong financial results that topped Wall Street estimates. Visa is now paying its shareholders a quarterly dividend of 52 cents per share, giving it a yield of 0.90%. The dividend increase comes after a rebound in spending on international travel drove fiscal fourth quarter results higher, Visa reported. The company recorded EPS of $2.33, which was better than the $2.25 consensus estimate among analysts, and up 21% from the same quarter of 2022.

Revenue in the quarter was $8.6 billion, up 11% from a year ago and matching Wall Street estimates. Visa also reported free cash flow of $6.6 billion, which was well above the $4.70 billion that was expected by analysts. Visa’s said that its cross-border payment volume increased 21% year-over-year in the quarter, with the company processing $3.2 billion of credit and debit card transactions. As for guidance, Visa said it expects “high single-digit to low double-digit” revenue growth and “low-teens” earnings growth over its next fiscal year.

In addition to the dividend increase, Visa bought back $4.1 billion of its own stock in the most recent quarter. The company announced a new $25 billion share buyback program beginning immediately. V stock is up 14% year-to-date.

Chipotle Mexican Grill (CMG)

a pedestrian walks past a Chipotle
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Chipotle Mexican Grill (NYSE:CMG) is another long-term winner among blue-chip stocks to buy and hold. CMG stock has gained 310% over the last five years, including a 42% gain so far in 2023. While the quick service specialty restaurant chain doesn’t pay a dividend, it continues to reinvest heavily in the growth of its business. Chipotle’s consistently strong financial reports reflect this fact. The company most recently announced Q3 results that beat analyst expectations, including EPS of $11.36 compared to $10.55 that was the consensus expectation of analysts.

Revenue in Q3 amounted to $2.47 billion, which was in line with forecasts. Earlier in October, Chipotle raised its menu prices for the first time in more than a year, citing rising food inflation as the reason. The company had previously paused price hikes as consumers pulled back their spending on discretionary food items. Chipotle has demonstrated that it has pricing power, or the ability to raise prices without alienating customers. The company’s Q3 same-store sales rose 5%, beating estimates of 4.6%. And Chipotle continues to grow, opening 62 new restaurant locations during Q3. Looking to 2024, Chipotle said it expects to open 285 to 315 new restaurants.

On the date of publication, Joel Baglole 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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/7-blue-chip-stocks-to-buy-and-hold-forever-november-edition/.

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