While it’s tempting to target the flavors of the week during a market correction, investors ought to spare some time for no-brainer blue-chip stocks to buy for 2023 and beyond. Indeed, the broader market and economic dynamics encourage retail investors to think about value and stability over growth.
Earlier, I laid out the monetary backdrop that should guide investing principles in the new normal. “In the trailing five years since September 2022, the real M2 money stock expanded over 30%. Put another way, money was “cheap” (or inflationary), so it incentivized business growth. However, in the trailing year, M2 declined over 5%, making money “expensive” (deflationary).”
Put another way, companies with deeply established track records should gain significant relevance. You couldn’t ask for a better framework for no-brainer blue-chip stocks to buy. Below are some compelling ideas to consider.
Headquartered in Cupertino, California, consumer electronics giant Apple (NASDAQ:AAPL) really needs no introduction. Recently, the company generated buzz when its market performance for the Nov. 10 session added $190.9 billion in market value, a record for a U.S.-listed company. At the time of writing, Apple had a market capitalization of $2.38 trillion, making it the world’s most valuable company.
To be fair, broadly weak consumer sentiment data suggests that companies like Apple should be having a rough time. Not surprisingly, AAPL is down over 19% on a year-to-date basis. However, the fundamentals remain strong. For instance, the company benefited from strong results from its latest product rollout. Therefore, Apple facilitates a powerful case for no-brainer blue-chip stocks to buy.
Financially, AAPL brings excellent value for what you get. The company enjoys blistering performance states for growth and profitability. In addition, Apple provides stability in the balance sheet, particularly its Altman Z-Score of 6.45 reflecting low bankruptcy risk.
Headquartered in Redmond, Washington, Microsoft (NASDAQ:MSFT) is a software and technology powerhouse. In addition, the company also carved a huge name for itself as a console video game manufacturer. Therefore, the company enjoys a wide canvas of relevancies. At the moment, MSFT features a market cap of $1.84 trillion, making it one of the elites among blue-chip stocks to buy.
Fundamentally, what investors should focus on regarding MSFT is that the underlying company dominates the business ecosystem. For example, it owns 76% of the desktop operating system market share. In other words, if you want to get anything done in the professional realm, you have to be familiar with Microsoft Windows and its business applications.
Financially, Gurufocus.com considers MSFT a modestly undervalued investment based on its proprietary calculations. It’s difficult to argue with this notion. Microsoft enjoys strong revenue growth metrics along with excellent profitability margins that dominate the underlying sector. Additionally, it features a stable balance sheet based on its 7.36 Altman Z-Score.
Abbott Laboratories (ABT)
Headquartered in Chicago, Illinois, Abbott Laboratories (NYSE:ABT) is a multinational medical device and health care company. Currently, Abbott sells medical devices, diagnostics, branded generic medicines, and nutritional products. At the time of writing, the enterprise commands a market cap of nearly $181.4 billion. Since the start of the year, ABT dropped 25% in equity value.
To be sure, Abbott carries much baggage. From its baby formula recall to weak medical device sales, the company can’t say it doesn’t deserve any market loss. At the same time, near-term momentum has been picking up. In the trailing five days since the close of the Nov. 10 session, ABT gained 6.5% in value.
Against the bigger picture financially, ABT certainly makes a strong case for blue-chip stocks to buy. Mainly, the company enjoys excellent profit margins. For example, its net margin stands at 17.5%, beating out 82% of the competition. Also, its return on equity (ROE) is 22% compared to the industry median of 0.2%.
Veeva Systems (VEEV)
Founded in 2007, Veeva Systems (NYSE:VEEV) operates out of Pleasanton, California. Veeva is a cloud-computing company focused on pharmaceutical and life sciences industry applications. At the moment, the enterprise features a market cap of $29.66 billion. Since the beginning of this year, VEEV gave up nearly 27% of its equity value. However, shares are making a comeback, gaining nearly 16% over the trailing month.
Admittedly, the fallout in the market this year has not been kind, especially toward the tech segment. However, with recent data on inflation coming in lighter than expected, it’s possible that the Federal Reserve could relax its monetary tightening policy. If so, that might encourage badly beaten-up investors to consider tech plays like VEEV.
Now, what makes Veeva one of the blue-chip stocks to buy centers on its financial resilience. Primarily, the company enjoys a stout balance sheet. For instance, its cash-to-debt ratio stands at 46 times, ranked better than 87% of its rivals. Also, the enterprise carries outstanding profit margins that also rank among the sector’s elite.
Ross Stores (ROST)
Headquartered in Dublin, California, Ross Stores (NASDAQ:ROST) is a chain of discount department stores. Per its public profile, the company is the largest off-price retailer in the U.S. Presently, Ross Stores carries a market cap of $33.38 billion. Since the start of the year, ROST slipped more than 14%. Still, the stock is outperforming the benchmark S&P 500 index.
Obviously, the big concern for ROST that works against its inclusion among the blue-chip stocks to buy centers on sentiment. With the consumer taking a beating from high inflation and now rising layoffs, not too many folks are interested in opening their wallets unnecessarily. However, with remote work facing a possible paradigm shift as employees lose leverage to employers, many folks might be forced to upgrade their professional wardrobes.
Cynically, that’s a big plus for Ross Stores. While it’s a tricky narrative, it’s still worth considering for blue-chip stocks to buy. On a final note, the company impresses on the income statement, particularly its strong operating and net margins.
Cognizant Technology (CTSH)
Based in New Jersey, Cognizant Technology (NASDAQ:CTSH) is an American multinational information technology services and consulting company. Cognizant provides myriad solutions, including business process services, cloud-computing applications, industrial automation, and artificial intelligence. At the time of writing, Cognizant carries a market cap of $30 billion.
Since the January opener, CTSH stock gave up 36% of its equity value. As with other tech-related blue-chip stocks to buy, macroeconomic headwinds imposed a dark cloud over the broader industry. Nevertheless, enthusiasm is finally returning to the space, with CTSH gaining nearly 9% over the trailing five days. While it still has a ways to go, this might be the start of something interesting.
Financially, CTSH will likely attract investors seeking blue-chip stocks to buy because it’s deeply undervalued. Shares trade at 12.2 times forward earnings, comparing favorably to the industry median of 22.2 times. Also, the company features a stable balance sheet with an Altman Z-Score of over 6, reflecting low bankruptcy risk.
Headquartered in Louisville, Kentucky, Brown-Forman (NYSE:BF-B) is one of the largest companies in the spirits and wine industry. It features some iconic brands including Jack Daniel’s, Old Forester, and Woodford Reserve. At the time of writing, Brown-Forman commands a market cap of $33.48 billion. Since the start of the year, BF.B declined by 2.4% in the charts.
Interestingly, though, over the trailing month, BF.B gained 8%. At least some of this enthusiasm might be traced to the underlying fundamentals. According to TipRanks, “during a recession, consumers are likely to increase alcohol consumption at home, while companies in the space retain fantastic pricing power during such periods.” Further, with people likely to seek escapism from troubling headlines, Brown-Forman could jump higher on cynical catalysts.
Financially, what may impress market observers the most is the company’s high business quality. It features an ROE of 32.7%, beating out more than 90% of its competitors. Also, it has a return on assets of 13.9%, above more than 86% of the industry.
On the date of publication, Josh Enomoto 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.