Blue Chip Stocks Definition
- Sell diversified and high quality products and services in a variety of geographic locations
- Competitive advantage in the market through their reputation and cost efficiencies
- Long-term share price returns
- Consistent dividend payments to common stock holders with a tendency to increase dividends payable to each share
- Solid balance sheets with secure assets and minimal debt levels allow them to borrow money at a lower cost than competitors
- Excellent credit ratings
- Known to overcome operate profitability in economic downturns
- Large and steady revenue streams and market capitalization
Benefits of Owning Blue Chip Stocks
Blue chip stocks can be some of the best investments in the market because they provide consistent dividend payments and long-term price returns. While many consider blue chips as boring and outdated, these stocks have consistently demonstrated growth and profits.
The Dow Jones Industrial Average
The Dow Jones Industrial Average provides a list of the thirty most prestigious blue chip companies around the world. Editors of the Wall Street Journal analyze and select the list of blue chips for the Dow Jones. This list rarely changes because of the stability of blue chip stocks.
How to Invest in Blue Chip Stocks
- Direct Stock Purchase Plan
- Dividend Reinvestment Plan
Examples of Blue Chip Stocks
- Johnson & Johnson
- General Electric
- General Mills
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