Blue-Chip Stocks: What They Are and the 10 Best for 2024

As the market thrives, there’s more interest in blue-chip stocks … so what are these stocks?

Blue-chips come from some of the world’s largest companies. So why the interest now?

Just look at the economy: it’s going strong. And throughout 2023, the stock market hit new all-time highs. A lot of investors and traders are loving the current bull market — and looking for more ways to both invest and trade.

In this post, I’ll tell you what I’d consider when selecting the best blue-chips to buy.

And I’ll give you some solid examples of blue-chip stocks. Plus, I’ll share with you examples of some of the best blue-chip stocks to buy in 2024.

Let’s dive right in!

What Are Blue-Chip Stocks?

Before we take a deep dive into some of the more interesting blue-chip stocks, let’s start with a definition.

Blue-chip stocks are large, well-established companies at the top end of the stock market. These companies have often been around for decades or longer, have solid track records, and are often industry leaders.

There’s no hard-and-fast rule defining exactly what a blue-chip stock is. As a rule of thumb, think of the longstanding giants: industry leaders with a market cap of at least $5 billion or much more. You can probably consider stocks that hit these criteria blue-chips.

You may also wonder where the term “blue chip” comes from. It’s actually derived from poker terminology. Historically, in poker-chip sets, the blue chips hold the highest dollar value. Therefore, we use the term to describe the highest-value companies as blue-chip stocks.

Examples of Blue-Chip Stocks

You’d have to be completely off the grid for your entire life to not know many blue-chip companies.

I’d also be willing to bet that you’ll use a bunch of blue-chip company products within 24 hours of reading this post…

Let’s look at a few examples of blue-chips:

Microsoft: This computer behemoth is most famously known for the Windows operating system and MS Office application suite. Microsoft is one of the largest publically traded companies in the world, with a market cap of over $1.2 trillion as I write this.
Johnson & Johnson: This consumer health products firm has been around since the 1800s. Most famously known for shampoo and baby powder, the company actually produces so much more. Think Band-Aids, over-the-counter meds, dental floss, medical instruments, and more.
ExxonMobil: America’s largest oil and gas company has roots dating back to John D. Rockefeller’s Standard Oil company in the 1800s. The company is involved in a huge number of activities in the energy industry, both domestically and internationally.
Visa: The financial services company is best known for its Visa credit card system used throughout the world. Though it dates back to the 1950s, surprisingly, the stock first listed in 2008. Today, Visa trades on the NYSE and has a market cap of over $400 billion.
Apple: This consumer electronics firm first started at the dawn of the personal computer, back in the 1980s. Over the years, Apple has reinvented itself, from financial troubles in the ‘90s to regaining prominence with the iMac and iPhone after the turn of the century. The company currently has a market cap of over $1.2 trillion and major cash reserves of over $200 billion in the bank.

Why Are Blue-Chip Stocks Interesting to Investors?

Before I go further, let me say that nothing I say here should be taken as investment advice or advice to invest in blue chips. Always talk to a licensed professional before investing. All investments are risky and there’s no such thing as a risk-free or ‘safe’ investment. Do your research.

Also, what you invest in depends on your investment goals.

That said, there are a number of reasons investors look to purchase blue-chips. Here are a few big ones:

They’re relatively stable: These businesses have often been around for decades or longer, turning a profit most years and providing necessities for the modern world. Blue-chips will likely still be around in a decade or two.
They often pay a dividend: Since these are often mature businesses that make consistent profits, they often pay out a dividend to shareholders each quarter. That can be a boost to those looking for an income from their stock portfolio, such as people who are retired.
They’re (somewhat) recession-resistant: When there are problems in the economy and the stock market declines, blue-chip stocks often retain value better than smaller stocks. That’s probably due to the fact that blue-chips tend to be leaders in their industries, are well-managed businesses, and produce goods and services that people will need and use, no matter the state of the economy.
They’re familiar to many investors: Some investors want to hold stocks that they’re familiar with. They don’t always have the time or interest to research smaller stocks. The average person knows Coca-Cola, Apple, and Wal-Mart. And that can make a lot of investors feel more comfortable with investing their money into these stocks.

What You Need to Get Started With Blue-Chip Stocks

Investing in blue-chip stocks is super simple in 2024. You just need a few things:

A stock brokerage account: There are many American stockbroker firms where it’s easy to open an account. But not all are equal. Read this post to learn how to find the right broker for your needs.
Capital to purchase a blue-chip stock: Capital is just a fancy word for the amount of money you’re willing to risk on a stock. If you’re just starting out, it doesn’t have to be much. As little as $500 or $1,000 should do.

Once your brokerage account is set up and verified, you need to place your capital into your account. This is often done via wire transfer.

Next, you’ll need to decide which stock or collection of stocks you want to invest in.

To pick a good stock, it’s a good idea to analyze the company’s financial data, the news stories, and the stock chart.

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What Is the Average Rate of Return on Blue-Chip Stocks?

When you invest in a stock, there are two ways that you can get a return on your investment:

Capital growth: A stock price goes up from the price at which you bought it, allowing you to sell at a higher price and lock in a profit.
Dividend payments: The company pays out some or all of its profits to the shareholders in the form of a dividend.

Each stock is different and makes different returns over time. Returns are hard to predict, and even the world’s best investors have trouble knowing what a stock will do. That said, to get some idea of the returns possible in blue-chip stocks, we can look at what they’ve historically returned.

To do this, we can analyze the historical performance of the S&P 500 index. That’s a collection of the 500 largest stocks traded on American stock exchanges. The index dates back to 1926, but first included 500 different stocks in 1957.

It could be said that the S&P 500 includes mainly blue-chip stocks.

When we look at the data from 1957 up until 2018, we can see that collectively, the stocks included in this index returned an average of 8% per year over that time. That’s a combination of capital gains and dividend payments.

Let me give you an idea of what growing your capital at 8% per year over that 61-year period looks like … If you invested $10,000 in 1957 and reinvested all your gains each year, you’d have $1,093,576 by 2018.

Those returns aren’t guaranteed, and past performance isn’t indicative of future returns. But that’s a snapshot of the returns that blue-chip stocks have made over the years.

10 Top Blue-Chip Stocks for 2024

By now, it’s possible that you’re sold on the idea of investing in blue-chip stocks, you just need to find some good ones to buy.

Let’s look at a few to get a better idea of which of the blue-chips might do well over the coming year. The StocksToTrade team and I made a list of 10 blue-chip stickers that we think are worthy of a closer look.

To compile this list, we took the companies that are in the Dow Jones Industrial list. That’s a collection of America’s top 30 stocks. We’re also including the stock charts and company fundamentals for each pick.

Without further delay, here’s the list of blue-chip stocks to put on your watchlist…

American Express Company (NYSE: AXP)

Apple Inc. (NASDAQ: AAPL)

Walt Disney Co. (NYSE: DIS)

Home Depot Inc. (NYSE: HD)

Johnson & Johnson (NYSE: JNJ)

Mcdonald’s Corp. (NYSE: MCD)

Microsoft Corporation (NASDAQ: MSFT)

Procter & Gamble Co. (NYSE: PG)

UnitedHealth Group Inc. (NYSE: UNH)

Visa Inc. (NYSE: V)

Bonus: High-Yield Blue-Chip Stocks

Next up, we have two blue-chip stocks that didn’t quite make the top-10 list. But these stocks have high dividend yields compared to other large companies…

Caterpillar Inc. (NYSE: CAT)

JPMorgan Chase & Co. (NYSE: JPM)

Are You Ready for Blue-Chips Stocks?

By now, you know what a blue chip is and why investors are interested in them. And you’ve even got a solid watchlist for interesting blue-chips to buy … What’s next?

The reality is that in 2024, the modern stock market is competitive. Finding success in the markets requires hard work and smart tools. The right tools can help you keep track of news, price action, changes in trading volume, social media buzz, and chart patterns of your favorite stocks.

There’s a lot to do. Back in the day, you’d need subscriptions to a number of services. The software was clunky. It took so much work to find trading and investment opportunities. Thankfully, those days are long gone.

Today you can access just about every tool you need to find the hottest stocks, all in the one program — StocksToTrade.

StocksToTrade is an all-in-one trading and analysis platform for all the major U.S. stock markets. We spent a lot of time and money fine-tuning the exact trading platform that’s perfect for serious traders and investors.

How do we know? Because at StocksToTrade, we’re real traders, not just marketers or accountants trying to sell trading software.

It’s no accident that many of the world’s best stock traders begin each trading day by loading up our platform. But you should see it for yourself. Get your 14-day trial of StocksToTrade for just $7.

Are Blue-Chip Stocks too Boring and Slow for You?

I’ve been obsessed with the stock market for as long as I can remember. In fact, when I was in grade school, I’d beg my father to bring home the newspaper so I could read the business stories and check stock quotes.

Today, I’m obsessed with the markets more than ever. I spend huge chunks of my time in front of my trading screens … But I don’t really focus on blue-chip stocks…

Why? I’m more interested in trading stocks with the potential big moves … 10%, 20%, or more in a single day.

You find them at the smaller end of the stock market — low-priced and penny stocks. I think trading smaller-cap stocks can be great for traders with small accounts.

These stocks can make big price moves, and the big traders at hedge funds and investment banks don’t get involved. The opportunities are too small for their million-dollar bankrolls. That leaves prime opportunities for average retail traders.

Ready to learn more about small-cap and penny stocks? I run a trading community called StocksToTrade Pro.

Inside StocksToTrade Pro, you’ll have daily access to me, as I share my trading screens and tell you exactly what I think about the market each day in twice-daily webinars.

You’ll have access to our chat room with other growing, helpful traders just like you.

Plus, you can attend regular training webinars where I share cutting-edge tactics that work in the markets right now.

If you’re looking for the most exciting trading opportunities in the stock market, join us at StocksToTrade Pro today!

Conclusion

Blue-chip stocks can allow you to profit from the success of some of the world’s largest companies, and many investors hold a bunch of them in their portfolios.

The stock market’s hot right now … We’re in a very long-running uptrend, and if that continues, most blue-chips should do well. But not all blue-chips are equal. So always do thorough research before you invest or trade a dime of your capital.

No matter which stocks you hold — penny stocks, small-caps, or blue-chips — it’s important to keep up with the latest news, price movements, and chart patterns.

StocksToTrade can help you research, analyze, and manage your stock positions in a single, convenient, streamlined trading platform. Come and grab your 14-day trial of StocksToTrade for $7 and see how we can help you every trading day.

What do you focus on — trading smaller stocks or investing in the giants? Tell me your process in the comments below!