If you are interested in Blue-Chip Stocks and wondering which ones are the best to buy in 2023. We will explore the best 8 blue chip stocks to buy in 2023. Let’s dive straight in.
What are Blue Chip Stocks?
Blue chip stocks are the stocks of renowned, outstanding companies that are industry leaders. These companies have a great reputation, have persevered through the years, and are respected by their shareholders and customers.
Blue chip companies have strong business models and a proven track record of providing investors with positive returns. Blue chip stocks are among the most well-liked by conservative investors because of these returns, which frequently include consistent and rising dividend payments. However, even more risk-tolerant investors should consider investing in blue chip companies to increase the diversification of their portfolios and offer some stability during volatile market conditions.
8 Best Blue-Chip Stocks to buy in 2023
Below are the 8 best Blue-Chip Stocks to buy in 2023.
One of the biggest businesses in the world, Apple (NASDAQ:AAPL), has led technological advancements throughout its existence. The company set the standard for innovation with its Macintosh computers in the 1980s, iPods in the early 2000s, and today’s ubiquitous iPhones, iPads, and Apple Watches. In a world where people rush to the newest technological trends, Apple’s goods inspire notable loyalty from its customer base.
Apple also generates recurring income through its services, which include its streaming television, iTunes, and App Store businesses. In 2018, Apple’s market value exceeded $1 trillion; in 2020, it reached an all-time high of $2 trillion.
Berkshire Hathaway is one of the blue-chip stocks that doesn’t issue a dividend. The company has a reputation for safety and security and consistent performance with diverse companies. Through its subsidiaries GEICO and Gen Re, Berkshire Hathaway (NYSE: BRK.A)(NYSE:BRK.B) is a significant player in the insurance sector, providing several commercial and personal protection lines. However, Berkshire also controls various companies, including the Berkshire Hathaway Energy utility company, the restaurant chain Dairy Queen, and the railroad, giant BNSF.
As its namesake soft drink spawned a worldwide empire, Coca-Cola (NYSE:KO) has been a leader in the beverage business for more than a century. However, Coca-Cola has also evolved with the times. It now offers a significantly wider range of goods, including juices, sports drinks, and bottled water, designed for more health-conscious customers.
Coca-Cola stands out for increasing its dividend in particular. Since the early 1960s, it has increased its yearly dividend payment in a continuous pattern, earning it a spot among the top 10 dividend stocks on the market.
Johnson & Johnson
One of the best Blue-Chip Stocks to purchase in 2023 is Johnson & Johnson (NYSE:JNJ). It is well known for its widely used consumer products, such as Tylenol painkillers, Band-Aids, and baby shampoo. However, J&J is a true healthcare giant that manufactures a broad range of medical devices to aid doctors and other medical professionals in performing life-saving procedures. Johnson & Johnson also operates a large pharmaceutical industry and manufactures drugs like the arthritis treatment Remicade, the prostate cancer drug Zytiga, and the psoriasis drug Stelara.
American Express (NYSE:AXP) is another well-known blue chip company to consider. It functions as both a payments network and a credit card company. Credit card fees and transaction processing fees are their primary sources of income. With more users and increased transaction volume, the business is well-positioned to grow both revenue streams. Despite being over 170 years old, it is still pertinent today: An encouraging development was that millennial and Gen Z customers made up more than half of new card accounts in 2021.
The management of American Express is confident that it can increase earnings at a double-digit rate going forward and intends to distribute about a quarter of its profits as dividends to shareholders. It has already increased the payout for 2022 by 20%. (As of June 2022). Future increases should result from ongoing earnings growth.
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Since the early 1980s, Pfizer has provided its shareholders with enormous returns of 2,649%. It generated a record-breaking $100.3 billion in revenue alone in 2022 and $31.37 billion in profits. In 2021, the company’s holdings came to $181.5 billion. But because it’s down almost 18% from last year, it might be a good deal for buyers searching for sales.
Amazon is undoubtedly the king of e-commerce and the No. 2 largest retailer globally, trailing only Walmart. During the pandemic, its business model proved particularly resilient, and its March 2022 stock split reduced the share price from over $3,000 to roughly $102 today. In addition to being a much more manageable sum of money for the average trader, the stock’s year-to-date decline of more than 35% makes it an incredible deal for those seeking discounts.
Walmart bucked the general pattern of brick-and-mortar stores succumbing to the onslaught of e-commerce and is still the largest retailer in the world. It has a $386.51 billion market cap and runs over 10,500 shops. Walmart has given its stockholders gains of about 58% over the last five years, in addition to a 1.58% dividend.
Why Should You Invest in Blue-Chip Stocks?
Any one class of stocks shouldn’t make up your portfolio. Even if you engage in businesses generally regarded as rock-solid, diversification is still important in the investment process. Diversifying entails s spreading your money across various company kinds. This means considering companies with small, midsize, and large market capitalizations and firms from different sectors and regions.
However, because of their reliability, blue-chip stocks are well-liked by investors, particularly elderly or more risk-averse investors. They are not immune to market downturns but have a track record of surviving them and coming out on the other side.
Investors also value the dividends that blue-chip stocks frequently give. Dividends are enticing if you’re investing for money, as many retirees do. Typically, blue-chip stocks offer consistent, increasing dividends.
Most experts counsel novice investors to start with well-known corporations, and blue-chip stocks are among the safest and most secure investments they can make for their portfolios. But don’t let that reality lull you into thinking you are safe.
Blue-chip stocks can be made obsolete by new technology and disruptive startups or destroyed by poor management or controversies, just like every company that has ever existed.