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Blue-Chip Stocks: Definition, Risks, Examples

blue chip corporations

We call the shares of the largest blue-chip companies large capitalization stocks. More specifically, the stocks of companies with a market capitalization of at least $5 billion. A blue chip company is famous for the quality and wide acceptance of its products. Summing up everything mentioned above, blue-chip stocks can be fairly considered safe and good investment instruments for your retail investor accounts even on the choppy stock market.

blue chip corporations

First, a theoretical review of the CSR is presented, followed by a literature review on the CSR’s indicators and the state of the CSR in the Macedonian practice. Lincoln National reported fourth quarter and full year 2022 accounting for medical practice results on February 8th, 2023, for the period ending December 31st, 2022. The company had net income of one penny per share in the fourth quarter, which compared unfavorably to $1.20 in the fourth quarter of 2021.

They’re less volatile than small-cap stocks

The results will provide managers with recommendations for improving operational efficiency through competitive mapping, as well as a list of the most attractive targets for investment. Blue-chip stocks occupy the most respected level of the stock market. As leaders in their industries, these companies have strong histories — some are more than 100 years old — and deliver consistently strong performance. Whether the market overall is up or down, blue chips prove themselves as steady and reliable investments. However, just about every investor can benefit from having a portion of their portfolio invested in blue chip stocks. It doesn’t have to be a set percentage; different investors will have different viewpoints about how much risk they want to assume.

That’s why many investors turn to low-cost index funds or exchange-traded funds instead. These funds contain a curated collection of investments and allow you to purchase a large selection of stocks in one transaction. It’s easy and instant diversification — at least, of course, among blue-chip companies. Investors also appreciate the dividends blue-chip stocks typically pay.

Plan your trading

Obviously, the company specializes in financial services, and its most popular products include debit, credit, and prepaid cards. Stocks can be bought individually or purchased as a basket of a diversified common stock fund when you invest in mutual or exchange-traded funds (ETFs). However, investing in funds assumes operating with considerable sums of money, which is not an option for everyone. If you decide to purchase stocks through a brokerage, there are several options available. Depending on your needs, you can choose a full-service broker, an online broker, or a discount broker.

Is Tesla a blue chip company?

With two ratings agencies giving Tesla investment grade debt ratings, Tesla is now considered a blue chip company from a corporate debt perspective.

From that moment on, Apple has been developing a wide range of top-notch devices, software, and cloud services. The most popular Apple product used by consumers from all around the world is the iPhone. The net interest margin for the first quarter decreased by 16 basis points, to 3.53%, in comparison to 3.69% in the fourth quarter of 2022. Asset quality remained strong with non-performing assets of $167.9 million, or 0.62% of total assets, on March 31, 2023, in comparison to 0.66% of total assets, on December 31, 2022. Overall, the results benefited from a steady loan balance and increased rates, resulting in a boost to net interest income (NII).

Advantages and Disadvantages of Blue Chip Stocks

In late January, Exxon reported (1/31/23) financial results for the fourth quarter of fiscal 2022. Its production in the Permian reached an all-time high, and its total production rose by 3%. However, oil and gas prices moderated off their blowout levels in previous quarters. As a result, Exxon saw its earnings-per-share dip -24% sequentially, from $4.45 to $3.40.

  • Earnings do not cover its dividend, as the company is poised to incur losses this year.
  • For example, Apple earned blue chip status when it joined the Dow in 2015.
  • Conducting thorough research and analysis of the company and its industry can help you make an informed investment decision.
  • These are usually companies with a long track record of financial stability.
  • Revenue for the Medical segment decreased by 7% to $3.8 billion, while segment profit was down 66%.

First, it must be large enough to make it through a downturn, as noted earlier. The market capitalization of a blue chip company is usually in the billions of dollars. Secondly, a company must have a sufficiently high credit rating to qualify as a blue chip. In particular, the downgrading of a company’s debt to junk bond status is sufficient to disqualify it from being a blue chip. Although they are in different sectors, they are all known as blue chip companies. Blue chip companies are the mature firms that represent the stalwarts of an industry.

Global Presence and Market Dominance

Today, it is used by investors across the world to describe quality stocks. From an investor’s point of view, blue chip companies are much less risky than start-ups. At the present moment, Apple is one of the bluest of all blue-chip companies and is an attractive option for retail investor accounts. The company has over 70,000 permanent full-time employees and more than 3,000 full-time employees who work on a temporary basis.

We expect steel prices to moderate this year, but we still expect Reliance Steel & Aluminum to post strong earnings-per-share of about $20.00 this year. For the quarter, acquisitions contributed to a 0.5% increase in revenue. Management raised the fiscal year 2023 earnings-per-share guidance range from $6.90 to $7.55 to $8.10 to $8.50. On January 26th, 2023, AIT reported second quarter 2023 results for the period ending December 31st, 2022. The company reported $1.71 in earnings-per-share for the quarter, which beat analysts’ estimates by 34 cents and amounted to 40.4% year-over-year growth. Revenue for the quarter increased 20.9% year-over-year to $1.1 billion and beat analysts’ estimates by $81 million.

As a result, blue-chip indices are widely followed and their performance is regularly reported in financial news. However, due to business deceleration in used vehicle sales and rental, Ryder provided guidance for earnings-per-share of $11.05-$12.05 in 2023. It also provided guidance for the first quarter of 2023, expecting sales volumes to grow 1%-3% over last year’s quarter and average selling prices to dip 3%-5% sequentially to more normal levels.

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What is a blue chip corporation?

Blue-chip stocks are big companies known for being valuable, stable and established. Blue-chips are popular among investors for their reliability, though they're not immune to market downturns. Most blue-chip stocks are part of a large-cap market index like the S&P 100, Dow Jones Industrial Average or Nasdaq 100.