In many ways, the battles on Wall Street center on the difference between potentiality and predictability. It comes down to how you want to play the game. If you’re looking to put big numbers on the scoreboard, chances are, the defensive component of your game will be vulnerable. On the other hand, you could favor a strong defense over a robust offense, which brings us to blue-chip stocks.
When you’re targeting the biggest and most established enterprises in the U.S. (and the rest of the world), you’re doing so because you want to make forward progress. This is about running the ball for a few yards, going for a layup rather than a three-pointer or simply moving your teammate to the next base. It’s not exciting but the prospect of failure (while not zero) is mitigated.
Faced with political turmoil at home and geopolitical conflicts abroad, going for the sure thing (relatively speaking) isn’t such a bad idea. With that, below are blue-chip stocks to consider.
Walmart (WMT)
In theory, big-box retailer Walmart (NYSE:WMT) should struggle amid the soaring rise of online transactions. Back during the worst of the COVID-19 crisis, e-commerce transactions as a percentage of total retail sales hit an all-time high of 16.4%. After fading, this metric has been steadily marching northward. As of the first quarter, this figure stands at 15.9%.
That’s alarming for the brick and mortars and yet I have confidence that Walmart will be one of the top blue-chip stocks to hold. It’s a one-stop shop for pretty much everything. Not only that, Walmart doesn’t charge a membership fee. Therefore, it enjoys the biggest practical footprint that a retailer can hope to achieve. Financially, it’s been delivering the goods, posting an average earnings per share of 55 cents. This beat out the consensus view of 50 cents.
Now, as a defensive retailer, WMT stock isn’t cheap, trading hands at 0.86X sales. Further, this figure is higher than the prior year’s average of 0.71X. That said, analysts anticipate steady growth in the years ahead. By fiscal 2026 (calendar 2025), Walmart might post $650.17 billion in sales, up from last year’s $594.85 billion.
Bank of America (BAC)
Generally, I’m not the biggest fan of financial institutions. That said, amid broader economic and monetary policy changes, Bank of America (NYSE:BAC) might be worth a look. In particular, the Federal Reserve – while holding interest rates steady for now – hinted at the possibility of future rate cuts. If so, that should improve the volume of BofA’s various lending programs.
Financially, the banking giant is a mixed bag on paper. Over the past year since Q2, the entity posted an average EPS of 71 cents. This was below the collective consensus view of 75 cents. However, the company incurred an ugly miss in Q4, delivering 35 cents against a target calling for 68 cents. Without that blemish, the situation would have looked much different in the past four quarters.
Right now, BAC stock trades hands at 3.21X sales. That’s not great compared to other big banks. However, it’s not that much of a premium compared to the prior year’s average of 2.83X. Further, experts see steady expansion over the next two years.
By 2025, revenue could be up $99.15 billion with a high-side estimate of $101.35 billion. Last year, the company posted sales of $91.38 billion. It’s at least one of the blue-chip stocks to consider.
IBM (IBM)
I haven’t talked about IBM (NYSE:IBM) in quite some time so it’s good to get back on the horse. The legacy tech juggernaut makes arguably an excellent case for blue-chip stocks thanks to its proven acumen. Sure, in the years past, the company struggled to find its footing. However, by focusing on relevant sectors like cloud and enterprise-level cybersecurity, IBM stock looks interesting again.
In particular, “Big Blue” has much to give in the realm of artificial intelligence. Yes, AI is dominated by the usual suspects at the moment. However, as enterprises dig further into deep learning and neural networks, IBM’s many decades of research and development should prove extraordinarily relevant.
The company should also gain respect for quietly exceeding expectations. In the past year since Q2, it posted an average EPS of $2.35. This figure beat the consensus target of $2.24, yielding an earnings surprise of 5.43%. Plus, the sales multiple of 2.83X is reasonable, especially compared to the prior year’s average of 2.51X.
By fiscal 2025, EPS could rise to $10.69. That’s above last year’s result of $9.62. Revenue is trickier, with sales calling for $61.11 billion by end of 2025. That’s slightly lower than last year’s print of $61.86 billion. However, the high-side estimate calls for $62.41 billion.
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.
