When a bear market comes roaring, investors want to own the best blue-chip stocks. Believe it or not, there have been stocks recently hitting new 52-week and all-time highs. As hard as that seems to believe, it’s true.
Outside of tech and FAANG stocks, some names are actually doing pretty well.
As tempting as it is to buy a blue-chip stock like Microsoft (NASDAQ:MSFT) when it’s down 30% or more, there are other names that are worth focusing on, too. Some of those stocks are in the retail sector. Others are in the healthcare space.
Since this is a bear market, the selling pressure can pick up at any time. However, even in a bear market, it’s worth knowing which stocks are outperforming and worth pursuing. Let’s look at three of the best blue-chip stocks right now.
Best Blue-Chip Stocks: Starbucks (SBUX)
Starbucks (NASDAQ:SBUX) may not be the first stock that comes to mind when thinking of the best blue-chip stocks to buy. However, I want to go outside the box a bit, and I’m looking for a stock that has some momentum.
The stock recently hit its highest level since January, as investors continue to cheer the results and direction of Starbucks’ business. Analysts’ average estimates call for 11% revenue growth this year and next year, alongside 15% earnings growth in 2023 and a 17.5% increase in its profits next year.
In other words, Starbucks’ business and its stock price have momentum.
Trading at 28 times its earnings, it’s not exactly cheap, while its 2.2% dividend yield does not make it a great name for income investors. But interim CEO Howard Schultz said, “We saw accelerating demand for Starbucks coffee around the world in Q4 and throughout the year.”
And its management noted that its results were “gratifying” given the economic pressures in many parts of the world, as consumers continue to spend a great deal of money on Starbucks’ offerings. As anti-Covid measures in China continue to be eased, China, the company’s second-biggest market could give SBUX stock a big lift in 2023.
Best Blue-Chip Stocks: Cardinal Health (CAH)
Cardinal Health (NYSE:CAH) has been fascinating to watch. On Aug. 11, CAH stock dropped by roughly 3.5% at the open after the company reported its fiscal fourth-quarter earnings. But the shares subsequently exploded higher, ending the day up 5.5%. The rally sent Cardinal Health stock to its highest level since 2018, and it ultimately climbed much further.
On Nov. 4, it reported fiscal Q1 results which surpassed analysts’ average estimates on the top and bottom-lines. Analysts on average, expect CAH to deliver almost 10% revenue growth this year. While the mean estimates call for just 5.5% earnings growth during the current fiscal year, the average forecast calls for almost 20% profit growth in the following fiscal year.
Trading at just 15 times this year’s earnings, paying out a 2.7% dividend yield and showing strong technicals, Cardinal Health is worth keeping an eye on.
Last but certainly not least, we have Amgen (NASDAQ:AMGN). Its dividend now yields just 2.6%, but that’s only because the stock has gone on a ballistic rise to new highs. Despite a mild pullback from the highs, Amgen stock has climbed 27% as it has rallied in five of the last six weeks.
Did I mention that this stock recently reached new, all-time highs?
Yes, it has been a runaway freight train. Sporting a one-year return of 54%, AMGN is trouncing the S&P 500, which is down 16.5% over the same stretch.
While investors may want to wait for AMGN to pull back again before buying it, keep some of the stock’s positives in mind. For instance, the shares trade at just 16 times Amgen’s earnings, and analysts, on average, are still looking for the company’s earnings and and revenue growth to rise this year and next year.
If the stock dips just below $260, it will trade for less than 15 times Amgen’s earnings and yield 3%.
On the date of publication, Bret Kenwell 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.