Finding the right blue-chip stocks to buy is likely to be a challenging year again, given a myriad of headwinds. However, stock selection is the key, and multiple growth and blue-chip stocks are expected to outperform.
The robust performance of the top blue-chip stocks to buy will continue offering a buffer against the current macroeconomic backdrop, with their steady gains, healthy dividend yields, and reasonable valuations.
Investing in blue chips during a bear market can provide a win-win situation. For one, the underlying businesses of these stocks tend to be highly resilient, making them reliable and relatively stable during market volatility.
Furthermore, when the bull market eventually returns, what makes these the best blue-ship stocks to buy is that they are likely to not only perform better than other types of stocks due to their superior fundamentals they also have the potential to recover quicker and more sustainably.
|BTI||British American Tobacco||$36.85|
Chevron Corporation (CVX)
Chevron Corporation (NYSE:CVX) has had an incredible year, reaping the rewards of sustained global crude oil price growth.
Its floor-to-ceiling success is evident from its sharp increase in market capitalization, consistently posting record profits throughout last year. The markets have been singing praises for Chevron, marking it as a top investor pick, making it one of the best blue-chip stocks to buy right now.
Chevron Corporation recently reported a spectacular full-year result with adjusted earnings of $18.8 per share and sales of $246.3 billion, an impressive increase over the previous year’s earnings and sales of $8.13 and $162.5 million, respectively.
Fueled by record cash flows and earnings, they have successfully increased their investments significantly this year compared to 2022, while their one-year dividend growth rate stands at a dazzling 6%, higher than its 5-year average.
With these results, the CVX stock maintains an incredibly strong position in continuing to grow its top and bottom lines while rewarding its shareholders with dividends.
Barrick Gold (GOLD)
Barrick Gold (NYSE:GOLD) is in a strong position to continue producing steady cash flows for many years.
This is partly due to its impressive arsenal of gold mineral reserves, which clocks up to a whopping 69 million ounces. Additionally, the company has displayed astonishing replacement capability, replacing its depletion of gold mineral reserves by 150% compared to the last year alone.
It remains in an excellent position to grow its financial position, evidenced by the $2.7 billion operating cash flow it has produced this year.
GOLD is a great option for those looking to diversify their investment portfolio and benefit from strong dividend growth. Barrick’s impressive balance sheet and its robust cash position of $5.2 billion make it even more attractive, as it has the capabilities to carry out aggressive exploration activity that can further boost its proven reserves.
UnitedHealth (NYSE:UNH) is at the forefront of healthcare, providing unmatched quality and value to its customers.
From health insurance plans to software and consultancy services, each product designed by them is tailored to an individual’s needs. UNH has been a high-quality stock with a robust return on investment over the past several years. The stock has gained over 700% in the past decade and held up remarkably well last year.
Analysts continue to call for the firm to grow its earnings by double-digit margins over the next couple of years. Additionally, another major sweetener for the firm is its stellar dividend profile.
The firm boasts a dividend yield of 1.3%, with dividend growth at over 13 consecutive years. Its payout ratio of 29% suggests it has enough wiggle room to expand its dividend payout making in one of the blue-chip stocks to buy with serious continued growth potential.
Also, its stock trades at just 1.2 times forward sales, 72.6% lower than its sector average.
Apple (NASDAQ:AAPL) has made steady progress in efficiency and profitability over time, and that trend shows no signs of slowing down.
That success could be compounded by further growth in revenue from services, given its already high margins in those areas.
Despite potential risk factors like manufacturing dependence on China and reliance on iPhone sales for major portions of revenue, Apple’s commitment to innovation and customer service makes it well-positioned to continue on its upward trajectory.
It delivered a lackluster result in its first quarter, which was an incredibly challenging period for the tech industry at large. Nevertheless, the quarter had plenty of positives, with an all-time sales record of $20.8 billion in its Services business. Moreover, it generated $34 billion in operational cash flows, returning $25 billion to its shareholders during the quarter.
Diageo’s (NYSE:DEO) performances last year have proven to be stellar over the past several years. Stout gains were made across their net sales, volume, and profits.
Compared to 2021, they saw a significant 21.4% increase in revenues, an eye-catching number that should boost investor confidence. This can be attributed to the performance of their strong portfolio of brands like Johnnie Walker, Tanqueray, and Guinness.
Diageo has seen rapid growth in the total beverage alcohol sector over the last decade and is already a leader in international spirits. This strong foundation demonstrates its commitment to success and stability for shareholders, with its dependable dividend increasing since 2001.
As its business moves forward, Diageo is aiming for sales growth of 5% to 7% over the next three years and continuing to grow its more profitable premium-tier spirits.
British American Tobacco (BTI)
British American Tobacco (NYSE:BTI) is seeing solid returns from its varied portfolio of brands and its wide reach across Europe and the Middle East.
It has established itself as a reliable dividend payer, with solid earnings resulting from good operating cash conversion. Moreover, BTI will likely experience its turn toward success thanks to its presence in the premium market and continued brand recognition.
British American Tobacco can be an attractive option to add to your portfolio. While it’s known for its traditional combustible products, the company is taking exciting steps toward the future.
BTI has shifted its focus to non-combustible products such as Vuse vapor products and Glo tobacco heating products, providing potential investors with a growth runway that its traditional offerings cannot match. Its Vuse product alone has managed to grab 40% of the U.S. vape market share.
Moreover, it has set an ambitious goal of having 50 million adults use its non-combustible products by 2030 and already has a user base of 21.5 million.
Constellation Software (CNSWF)
Constellation Software (OTCMKTS:CNSWF) has made a name for itself in the software industry by acquiring and managing vertical market software businesses across its home country of Canada, the U.S., the U.K., and Europe.
This company provides specialized and mission-critical software solutions tailored to specific industries and markets.
The company boasts an excellent track record of growing its top and bottom lines over the past several years. In the past five years, CNSWF stock has soared over 1,450% in the past decade. Additionally, the firm’s profitability, including its gross and net income margins, has grown over 37% and 19% over the past five years. Moreover, the company is looking to reinvest its cash flow into new businesses, which has effectively compounded its value over time.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Cloud, Consumer Discretionary, Energy, Healthcare, Industrial, Oil, Precious Metals, Retail, Software, Technology