So what are blue chips, exactly? Exact definitions vary, but the term generally applies to large, established corporations with a strong management team and consistent earnings growth. Think McDonald�� (NYSE:MCD), Coca Cola (NYSE:KO) and technology giant IBM (NYSE:IBM), just to name a few.
Many of these firms have paid a dividend for decades, which is an enticing feature for investors seeking a more immediate return on their investment. And while these payouts aren�� always huge, they tend to be more predictable than increases in share price.
Here are some tips for evaluating a blue-chip stock and finding out whether it�� a good addition to your portfolio.
5 Best Supermarket Stocks To Buy Right Now: Colgate-Palmolive Company(CL)
Colgate-Palmolive Company, together with its subsidiaries, manufactures and markets consumer products worldwide. It offers oral care products, including toothpaste, toothbrushes, and mouth rinses, as well as dental floss and pharmaceutical products for dentists and other oral health professionals; personal care products, such as liquid hand soap, shower gels, bar soaps, deodorants, antiperspirants, shampoos, and conditioners; and home care products comprising laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches, dishwashing liquids, and oil soaps. The company offers its oral, personal, and home care products under the Colgate Total, Colgate Max Fresh, Colgate 360 Advisors' Opinion:
- [By Demitrios Kalogeropoulos]
Colgate-Palmolive (NYSE: CL )
Colgate's shares are trading well below the $62 high they hit just last month. The consumer goods company is heavily levered to international sales, with more than 80% of its business coming from outside the U.S. and more than half coming from emerging markets. - [By Holly LaFon]
A: The stock market is a market of individual stocks that represent fractional ownership interests in real businesses. The key to investment success is first and foremost to identify individual, highly durable businesses and then have the discipline to buy them when prices are attractive and the risk/reward trade-off is compelling. We invest in what we understand, continuing to pour over the universe of businesses within our many circles of competence that meet our management, capital allocation, business model, and valuation criteria. Some areas that we believe offer the greatest opportunity in terms of prospective returns include:
Global market leaders such as Nike (NKE), Colgate-Palmolive (CL) and Philip Morris International (PM) that are beneficiaries of a growing global middle class and consumer culture. The global wealth effect, particularly in developing economies, is a real and very powerful force that should serve as a tailwind for these types of global brands over the long term. Well-managed financial services companies with true franchise value due to the success of their particular products or brand that have the ability and management prowess to build market share over time in a highly fragmented marketplace. Wells Fargo and Berkshire Hathaway (BRK.B) are representative examples in this category. The depth of the recent financial crisis is well known. What is less understood is that certain market leaders used the downturn to dramatically strengthen their capital base and significantly grow their market share at the expense of weaker competitors. Certain health care-related businesses such as UnitedHealth Group and Laboratory Corporation of America that stand to benefit from growing health care spending by aging populations around the world. Workhorse technology companies such as Texas Instruments (TXN), Microsoft (MSFT) and Google that are market leaders with durable competitive moats and that also offer an attractive risk/reward proposition at - [By Sean Williams]
But, have you ever stopped to consider which toothpaste is America's favorite? If you've walked down the toothpaste aisle in the grocery store you've probably noticed that it goes on forever, which can make choosing a toothpaste a chore. Well, here's a big hint toward the answer: America's favorite toothpaste comes down to either Colgate, which is made by Colgate-Palmolive (NYSE: CL ) , or Crest made by Procter & Gamble (NYSE: PG ) .
- [By Ben Levisohn]
Shares of Procter & Gamble have dropped 3.2% during the past 12 months, lagging Unilever’s (UL) 2.5% rise, Colgate-Palmolive’s (CL) 8.7% advance and Kimberly-Clark’s (KMB) 3.1% gain.
Best Blue Chip Stocks To Buy For 2014: Apple Inc.(AAPL)
Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.
Advisors' Opinion:- [By Evan Niu, CFA]
A couple months ago when hedge fund celebrity David Einhorn was making a media blitz to sell his "iPref" idea to Apple (NASDAQ: AAPL ) , he made an interesting comparison to Amazon.com (NASDAQ: AMZN ) . He noted that Apple had generated over $20 billion in operating cash flow in the fourth quarter, which was "more money than Amazon has made in its entire life."
- [By Tim Brugger]
With its stock price down 35% over the past six months, and concerns about a lack of innovation and growing competition, Apple (NASDAQ: AAPL ) doesn't need the PR nightmare that its new uber campus will likely become. According to an "anonymous insider,"�who spoke with Businessweek,�Steve Jobs' dream of "building the best office building in the world" will become a reality -- for what's estimated to be a staggering $5 billion price tag. The money itself isn't the problem, of course; Apple has that in its petty cash drawer. But the timing of the project? That's another matter altogether.
- [By Evan Niu, CFA]
A recent Wall Street Journal�article suggests that�Apple� (NASDAQ: AAPL ) and�Yahoo!� (NASDAQ: YHOO ) are in talks to integrate Yahoo! content and services to a greater degree. Right now, the search company provides data on stocks and weather, along with answering some requests from Siri. New CEO Marissa Mayer has made progress focusing on Yahoo!'s mobile strategy, and scoring a deeper partnership with Apple would be a big win. Meanwhile, Apple continues to reduce�Google's (NASDAQ: GOOG ) integrated presence in iOS, most notably with Maps, although Google's services are still available as third-party apps.
- [By Mani]
[Related -Will Apple Inc. (AAPL) Join Hands With Tesla Motors Inc (TSLA)?]
Time Warner Cable will combine its products and services with those of Comcast's, including StartOver and LookBack. StartOver allows customers to restart a live program in progress to the beginning while LookBack allows customers to watch programs up to three days after they air live, all without a DVR.
Best Blue Chip Stocks To Buy For 2014: McDonald's Corporation(MCD)
McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.
Advisors' Opinion:- [By Alex Planes]
Restaurateur Ray Kroc opened his first McDonald's (NYSE: MCD ) franchise on April 15, 1955. The hamburger joint had been around since 1948, but it was only after milkshake machine vendor Kroc sought to emulate the McDonald brothers' successful fast-food formula that McDonald's took its current form. The first Kroc franchise wasn't at the level of today's McDonald's stores, with their standardized, rapid assembly-line preparation methods. Potatoes were still hand-peeled and sliced in the store then, and soft drinks were served from syrup barrels. Kroc quickly progressed beyond this level of charming simplicity, and by 1958 he owned exclusive franchise rights and 38 restaurants. True growth was about to begin.
Best Blue Chip Stocks To Buy For 2014: Visa Inc.(V)
Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.
Advisors' Opinion:- [By Paul Ausick]
More than offsetting the drop in Disney stock, Visa Inc. (NYSE: V) saw its share price rise 0.71% today and the stock�� high per share price carries a lot of weight on the DJIA. The stock will close at around $225.46 in a 52-week range of $155.68 to $235.50. Volume was almost 50% below the daily average of around nearly 3.4 million shares traded.
- [By Reuters]
Kathy Willens/AP JPMorgan Chase reported a better-than-expected adjusted quarterly profit as the biggest U.S. bank kept a lid on costs and set aside less money to cover bad loans. The bank, which agreed last week to pay $2.6 billion to settle government and private claims over its handling of accounts of fraudster Bernie Madoff, said fourth-quarter net income fell 7.3 percent to $5.28 billion, or $1.30 a share. Adjusted for special items, the company earned $1.40 a share, beating the average analyst estimate of $1.35, according to Thomson Reuters I/B/E/S. The results took into account gains from the sale of Visa (V) shares and One Chase Manhattan Plaza and legal expenses related to the Madoff settlements. JPMorgan (JPM), which agreed to pay nearly $20 billion in 2013 to settle assorted legal claims, had estimated that settlement of the Madoff claims would subtract $850 million from fourth-quarter earnings. "It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward," Chairman and Chief Executive Officer Jamie Dimon said in a statement Tuesday. JPMorgan shares, which have been trading this month at their highest levels since 2000, were up 0.5 percent at $58 before the opening bell on the New York Stock Exchange. The stock rose 33 percent in 2013, in line with the 35 percent rise in the KBW Bank index and slightly ahead of the 29 percent gain in Standard & Poor's 500 stock index. Special items highlighted by the bank subtracted 10 cents a share from fourth-quarter earnings, compared with a two-cent boost in the same quarter of 2012. The special items included a benefit of 21 cents a share from the sale of Visa shares and 8 cents from the sale of One Chase Manhattan Plaza and an expense of 27 cents a share from legal bills, including the Madoff settlements. Three months ago, JPMorgan reported its first quarterly loss under Dimon after recording after-tax expenses of $7.2 billi
- [By Dan Caplinger]
Getty Images Holiday shopping season is in full swing, and smartphones, tablets, and other electronic devices once again top many shoppers' gift lists. Given how expensive many popular gadgets have become, one big question many shoppers are facing is whether or not to tack on an extended warranty to protect themselves should their electronic devices come to harm. They're Lining Up to Sell You Protection Retailers know that the best time to get you to pay to protect expensive items is while you are making a big-ticket purchase. For years, Best Buy (BBY), Sears (SHLD), Walmart (WMT), and other major retailers have sold extended warranty protection on high-priced electronics like computers and TVs. That coverage can be pricey, with Walmart having recently charged $65 for a two-year TV service plan and Best Buy offering two-year coverage on an $800 TV for $99.99 and five-year coverage for $179.99 . Appliance warranties can also be expensive, with Sears recently charging $280 for a three-year protection plan on a $950 refrigerator. Protection plans for smartphones and tablets are also popular. Apple (AAPL) offers its AppleCare for its devices. Coverage to extend an iPhone's warranty and other protections for two years will run you $99. Other companies have sought to offer more comprehensive coverage for electronic devices, with Protect Your Bubble offering phone and tablet insurance for $7.99 to $9.99 a month that covers not only mechanical problems but also common mishaps like damage from drops and liquid spills, as well as theft or loss. Many Items Have Built-In Protection What many consumers don't realize is how much protection against common problems they already have, even without buying extra. Nearly every purchase comes with at least limited warranty protection for mechanical defects. According to Consumer Reports, most issues that would qualify for coverage under extended warranties tend to happen during the initial warranty period, making the extended co
- [By Diane Alter]
Athletic gear maker Nike Inc. (NYSE: NKE) steps into the place of Alcoa, a Dow component for 54 years. Payments company Visa Inc. (NYSE: V) will unseat HP, which joined the blue-chip benchmark in 1997. And Goldman Sachs Group Inc. (NYSE: GS) replaces BofA, which joined the index five years ago.
Best Blue Chip Stocks To Buy For 2014: Chevron Corporation(CVX)
Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.
Advisors' Opinion:- [By Lee Jackson]
Chevron Corp. (NYSE: CVX), in addition to benefiting from Syria-related higher oil prices, announced last week that it will make large investments in Argentina�� shale oil and gas fields. The UBS price target for the stock is $125. The Thomson/First Call estimate is at $135. Investors are paid a solid 3.3% dividend.
- [By Aimee Duffy]
Hawaii only has two operating oil refineries. Tesoro (NYSE: TSO ) plans to close the one it owns, Chevron (NYSE: CVX ) owns the other, and the cost of shipping crude oil out there is the main reason that gas is so expensive. California is ranked second largely because it has the highest taxes on gas in the country. The combined local, state, and federal taxes tack on just shy of $0.69 per gallon, according to the American Petroleum Institute.
Best Blue Chip Stocks To Buy For 2014: International Business Machines Corporation(IBM)
International Business Machines Corporation (IBM) provides information technology (IT) products and services worldwide. Its Global Technology Services segment provides IT infrastructure and business process services, including strategic outsourcing, process, integrated technology, and maintenance services, as well as technology-based support services. The company?s Global Business Services segment offers consulting and systems integration, and application management services. Its Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; information management software for database and enterprise content management, information integration, data warehousing, business analytics and intelligence, performance management, and predictive analytics; Tivoli software for identity management, data security, storage management, and datacenter automation; Lotus software for collaboration, messaging, and so cial networking; rational software to support software development for IT and embedded systems; business intelligence software, which provides querying and forecasting tools; SPSS predictive analytics software to predict outcomes and act on that insight; and operating systems software. Its Systems and Technology segment provides computing and storage solutions, including servers, disk and tape storage systems and software, point-of-sale retail systems, and microelectronics. The company?s Global Financing segment provides lease and loan financing to end users and internal clients; commercial financing to dealers and remarketers of IT products; and remanufacturing and remarketing services. It serves financial services, public, industrial, distribution, communications, and general business sectors. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. IBM was founded in 1910 and is based in Armonk, New York.
Advisors' Opinion:- [By Rick Munarriz]
Briefly in the news
IBM (NYSE: IBM ) proved mortal on Thursday, missing Wall Street's profit expectations for the first time in ages. Outside of a quarter in 2007 when IBM merely matched analyst bottom-line estimates, IBM managed to keep its impressive streak of beats going until now. BTIG Research initiated coverage of Netflix (NASDAQ: NFLX ) with a Buy rating and a $250 price target. Some may argue that BTIG is late to the game, since the stock has already tripled from last year's low, but better late than never. Intel (NASDAQ: INTC ) didn't do itself any favors by missing Wall Street's profit projections. Rival Advanced Micro Devices (NYSE: AMD ) surpassed expectations, but it still recorded a loss. It was also surprising to hear Intel's CEO tease about lower prices. Folks won't be spending good money on tech if they see prices falling in the near future.
And now let's take a quick look at some of the other stories that shaped our week. - [By Roadmap2Retire] 's only a matter of time before patience runs out. The company has seen declining revenues and cash holdings, while debt has continued to pile up. The company has been squeaking out quarters resorting to layoffs to keep the shareholders happy - and for the sake of the IBM shareholders, I hope management changes this path that they are heading down on.
On the other hand, General Electric (GE), with all the cash available, has been investing heavily in growing its business. GE is cutting losing business segments that are not lucrative anymore such as the appliance business, which it sold to Electrolux for $3.3B recently, and spun-off Synchrony Financial (SYF) ��its retail finance arm. Instead, GE is now returning to its industrial roots and expanding into new horizons such as oil & gas exploration and pipeline infrastructure tech, green energy investments such as wind, solar and fuel cells etc. These are lucrative businesses and I fully support the management in their decision as a shareholder. Note that GE, like others, has a share repurchase plan ��especially in 2013, GE has bought a lot of its own shares after selling its stake in NBC.
A plethora of companies have a history of buying at highs and selling at lows. This goes against any logic when it comes to good financial sense. When times are good and companies are flush with cash, like the current environment, the management authorizes buying its own shares and during lean times - after market crashes and/or recessions, the companies cut back on share repurchases. So, the question for the retail investors is: Instead of investing or paying down debt, if the company is buying its own shares and the insiders are selling, should you be buying? It comes as no surprise that smart investors such as Warren Buffett (Trades, Portfolio) through his holding company Berkshire Hathaway holds a huge cash position (totaling $55B)
- [By Gregory Ness]
Most of the biggest technology payoffs have been generated by companies that drove transformations in business operations. From the mainframe era with IBM (IBM) through the PC era with Microsoft (MSFT) and the networking era with Cisco (CSCO), disruptive technologies that set new standards for business productivity established built-to-last companies with massive market capitalizations.
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