Best Blue Chip Stocks to Invest in 2024

Blue chip stocks are desired by investors because of their resilience through good times and bad. They tend to be well-established, large-cap stocks with tried and tested business models, strong balance sheets and solid cash flows. What they lack in meteoric growth they make up in stability. They are usually the first stocks that bounce back from an economic downturn – if they have tumbled at all.

In this guide, we feature 10 blue chip stocks that all have such  advantages as consistent revenue and earnings growth, stable cash flows, and a track record of increasing their dividends. Read on to discover our picks of the 10 best blue chips stocks.

Top Blue Chip Stocks to Buy in 2024

Here are the top 10 blue chip stocks to consider adding to your portfolio today:

  1. ASML Holdings: The Dutch semiconductor equipment maker sells extreme ultraviolet (EUV) lithography systems. It’s the only company that makes these machines used by chipmakers.
  2. Microsoft: The U.S. tech giant known for its office software and cloud computing has become the world’s most valuable company this year due to its prominence in the use of artificial intelligence (AI).
  3. Caterpillar: The world’s largest maker of construction equipment had record sales of $67.1 billion in 2023, and it plans to invest between $2 billion and $2.5 billion in 2024 mainly in new technologies. 
  4. UnitedHealth Group: The world’s largest insurer continues to grow, benefiting from an aging population that requires more health insurance, healthcare and health technology services.
  5. American Express: The U.S.-based company makes money from the credit cards it offers and from its travel services. It had record revenue in 2023 helped by its affluent customer base. 
  6. LVMH: The world’s No.1 luxury retailer, with labels such as Dior, Louis Vuitton, and Tiffany, saw organic revenue growth of 13% in 2023, led by resilient demand amid economic headwinds. 
  7. Coca-Cola: The U.S. company makes Coca-Cola, as well as other non-alcoholic beverages and syrups. Its dominant position in the beverage market generates consistently strong free cash flows.
  8. Parker-Hannifan: It’s one of the largest companies in the world in motion control technologies. Its products are used in aerospace, climate control, fluid and gas handling, hydraulics and other fields.
  9. Visa: The world’s largest payment processor boasts strong profit margins and consistent revenue growth with low debt. It has benefited from resilient U.S. consumers and strong travel demand.
  10. Johnson & Johnson: The U.S. healthcare giant, thanks to the spinoff of its consumer healthcare division, can now focus on its most profitable segments, innovative medicines and medical devices.

A Closer Look at the Best Blue Chip Stocks to Invest in

Let’s take an in-depth look at our selection of the 10 top blue chip stocks available in stock markets today:

1. ASML – Semiconductor Equipment Maker With a Huge Moat

The Dutch company, founded 40 years ago with a merger of Philips and ASM International, has a monopoly on EUV lithography machines, which imprint patterns on silicon chips. The machines are incredibly complex and require more than 100,000 components sourced from specialty companies, making it difficult for any new competitors to break that monopoly.

ASML price chart

The machines use ultraviolet light to create the world’s most powerful chips. The company is benefiting from two trends: the Biden’s Administration’s push to avoid using Chinese chipmakers (ASML is based in The Netherlands), and the adoption of AI technologies that require the type of chips that ASML’s machines help build.

Its latest model, the High-NA Twinscan EXE lithography machine, costs roughly $380 million each. Last year, the company sold 421 new machines and 28 used ones. Sales grew 31% in 2023 to €27.6 billion ($29.9 billion) while earnings per share (EPS) rose 40.8% to €19.19. Last year, counting interim dividends, ASML paid out €6.10 in dividends, up 5.2% from 2022. ASML also has said it plans to repurchase as much as €2 billion worth of its own shares by the end of 2025.

Ticker  P/E  Dividend Yield
NASDAQ: ASML 45.18 0.68%

2. Microsoft – AI, Dividend Growth Make It a Solid Blue Chip

Microsoft, known for its productivity software of Word, Office and Windows, also owns LinkedIn, Skype and video games company Activision Blizzard. The company’s Intelligent Cloud segment is helping drive strong returns and its connection to AI, through its investment in Chat GPT developer OpenAI, is also paying off.

Microsoft price chart

In the second quarter of fiscal 2024, it reported $62 billion in revenue, up 18% year over year, and EPS of $2.93, up 33% from a year earlier. Microsoft Cloud revenue jumped 24% year over year.

Microsoft’s quarterly dividend doesn’t have a high yield, but it’s growing. It raised it by 10.3%, effective this year, to $0.75, the sixth consecutive year of boosting it by 9.5% or more. Over the past decade, it has raised its dividend by 168%.

Ticker  P/E  Dividend Yield
NASDAQ: MSFT 37.95 0.71%

3. Caterpillar – Coming off a Big Year, Poised for More in 2024

Caterpillar operates in all seven continents through three main segments: Construction Industries, Resource Industries and Energy & Transportation. It also has a Financial Products segment, where it provides financing and services.

Caterpillar chart

The company is coming off a record year financially, and if benchmark interest rates drop later this year, that could spur even more sales. With lower borrowing costs, construction and mining spending would rise, leading to higher demand for Caterpillar’s equipment. In 2023, Caterpillar posted revenue of $67.1 billion, up 13%, and EPS of $21.21, up 53.5% from a year earlier.

During 2023, Caterpillar repurchased $5 billion of its stock and paid out $2.6 billion in dividends. It has raised its quarterly dividend for 30 consecutive years, including an 8.3% bump in 2023 to $1.30 a share. Trading at under 19 times earnings, it’s the most undervalued blue chip company on this list.

Ticker  P/E  Dividend Yield
NYSE: CAT 18.01 1.43%

4. UnitedHealth Group –  Benefits From Its Size and Scope

UnitedHealth Group is not only the biggest insurer but also the largest healthcare company in the world. The biggest problem it faces isn’t competitors, but pressure from regulators because of its size and complexity of its business. The leading U.S. health insurer, pharmacy benefits manager and owner of doctor groups is facing an antitrust probe from the U.S. Justice Department.

UNH chart

The company operates in two segments, its UnitedHealthcare insurance unit, which operates health insurance for employers, Medicare and Medicaid, and its Optum health-services arm, which owns surgery centers and physician groups and is a large pharmacy benefits manager.

In 2023, UnitedHealth reported revenue of $371.6 billion, a 15% increase from 2022, and EPS of $23.86, up 12.6% year on year. UnitedHealthcare is the larger segment, but it isn’t growing as quickly as Optum. In 2023, UnitedHealthcare’s revenue was $281.4 billion, increasing 12.7%, while Optum’s revenue rose 24% to $43.9 billion.

UnitedHealth Group raised its quarterly dividend by 13.9% in 2023 to $1.88, the 14th consecutive year of increases.

Ticker  P/E  Dividend Yield
NYSE: UNH 20.67 1.52%

5. American Express – Focusing on Long-Term Growth

The company has come a long way from its beginning in 1850 as a cargo delivery service. Today, it provides services for tourism to issuing and servicing credit cards and traveler’s checks. The company’s Global Business Travel segment is in the process of buying travel competitor CWT for $570 million. With it, American Express’s business travel segment gains 4,000 customers from CWT and would increase its transaction volume by 45%, Amex GBT CEO Paul Abbott said on March 25.

Amex chartIts travel business is quite lucrative. While it has a smaller market cap than credit card companies Visa (NYSE: V) and MasterCard (NYSE: MA), it has more than double the annual revenue of either competitor.

In 2023, the company saw revenue and EPS rise by 14% to $60.5 billion and $11.21. Amex expects revenue growth of between 9% and 11% this year and EPS of between $12.65 and $13.15, up 15% at the midpoint. It added 12.2 million cards, giving it more than 140 million cards worldwide.

The company has increased its dividend by 900% over the past 20 years. This year, it approved a 17% boost to $0.70 per share. 

Ticker  P/E  Dividend Yield
NYSE: AXP 20.21 1.24%

6. LVMH – Keeping Its Houses in Order

LVMH Moët Hennessy Louis Vuitton, Europe’s second-most valuable company with a market cap of $417 billion, owns more than 75 luxury brands, from Louis Vuitton to Christian Dior, Sephora and Tiffany. It saw particularly strong growth last year in its fragrances and makeup division, and Dior’s Sauvage was the world’s best-selling fragrance for the eighth year in a row. It’s a huge company, founded in 1987, with some of its brands having roots in the 19th century. The luxury giant has more than 213,000 employees worldwide.

Lvmh chart

In 2023, LVMH had €86.2 billion ($93.28 billion) in revenue, up 13% from 2022, and EPS of €6.57, up 8.06%. Its founder and CEO, Bernard Arnault, has recently overtaken Jeff Bezos as the world’s richest person.

The company pays an interim dividend and a final dividend. Since 2020, it has raised its total annual dividend by 85.7% to €13.54. It has increased its annual dividend for 14 consecutive years.

Ticker  P/E  Dividend Yield
OTC: LVMHF 27.33 1.53%

7. Coca-Cola – Dividend King Trying New Ideas

Founded in 1892, Coca-Cola is the best-known brand in the world and the company is able to leverage that brand loyalty to launch new products. It’s teaming up with Monster Beverage to make a splash in the growing energy drink market and it recently launched its first AI-based platform, “Create Real Magic”, which allows digital artists to create unique works of art using recognizable elements from Coca-Cola’s archives. The company has used the platform to create iconic advertisements.

KO price chart

In 2023, Coca-Cola had revenue of $45.7 billion, up 6% from 2022, and EPS of $2.69, up 8.47%. This year, it said it expects organic revenue (a non-GAAP measure) to rise by 6% to 7%, and for comparable EPS (non-GAAP) to grow by 4% to 5%. Over the past seven years, its annual EPS increased by 246%.

Coca-Cola is a dividend king that has raised its dividend for 62 consecutive years, including a 5.4% increase in 2024 to $0.49 per share. It also bought back $1.7 billion of its shares, leaving scope for an additional $6 billion in authorized share repurchases. It’s a relatively high-dividend blue chip, with a dividend yield of around 3.19%.

Ticker  P/E  Dividend Yield
NYSE: KO 24.63 3.19%

8. Parker-Hannifan – Big Moat in Motion and Control Industry

The U.S. company, founded in 1917, dominates the $135 billion motion and control technologies industry, operating in 44 countries across six continents. It’s not well known to the public because its clients are generally other businesses, or the defense industry. Parker, for example, has a $1 million U.S. Department of Defense contract, working with the Camgian Corporation, to build an AI-based software program that will monitor the condition of U.S. Army ground vehicles to determine when maintenance will be needed.

PH price chart

The company posted double-digit earnings growth in the fiscal second quarter of 2024. It reported record quarterly revenue of $4.8 billion, up 3% year over year, and EPS of $5.23, up 29%. It has two segments, Diversified Industrial and Aerospace Systems. The latter was the star performer, with sales rising 15% to $1.3 billion in the quarter. Parker is predicting that its 2024 revenue will rise between 3% and 5% and its EPS will climb to between $20.00 and $20.60, up 26.5% at the midpoint over 2023.

Parker has raised its quarterly dividend for 67 years, including an 11.3% increase last year to $1.48. Only one company in the S&P 500 Index, Dover Corp. (NYSE: DOV), has a longer track record of dividend increases. 

Ticker  P/E  Dividend Yield
NYSE: PH 27.28 1.07%

9. Visa – Continued Growth Is in the Cards

The company makes money from every credit card transaction it helps facilitate. The rise of e-commerce is helping the growth of credit card use and that benefits Visa, which has 4.3 billion cards in circulation, more than any other financial services company. The global credit card payment market was valued at $461 billion in 2023. It’s expected to have a compound annual growth rate (CAGR) of 8.5% through 2032, becoming a $960.6 billion market by that time, according to Straits Research.

Visa price chart

Visa posted revenue of $8.6 billion in the first quarter of fiscal 2024, up 9% year over year. Its EPS was $2.39, up 20% over the same period a year earlier. The revenue got a boost from 8% growth in payment volume, as well as year-over-year growth in cross-border volume and processed transactions.

The company, along with competitor Mastercard (NYSE: MA), just agreed to a $30 billion antitrust settlement that would freeze their transaction fees for the next five years. It’s worth noting that both companies’ shares moved only slightly lower on the news because the lawsuit has been in the works since 2005 and the settlement has likely been reflected in the share prices.

Visa raised its quarterly dividend by 16% last year to $0.52 per share, the 16th consecutive year of lifting its dividend. While the yield is below the S&P 500 average of 1.47%, the dividend has climbed by 187% since 2008.

Ticker  P/E  Dividend Yield
NYSE: V 35.18 0.75%

10. Johnson & Johnson –  Leaner and More Profitable

The U.S.-based pharmaceutical and medical technology company  demonstrated in the fourth quarter of 2023 that the move to spin off its consumer healthcare segment into a separate company, Kenvue (NYSE: KVUE), should bring improve its profitability. In the quarter – the first full quarter since Kenvue became a fully independent company on Aug. 30 – revenue was $21.4 billion, up 7.3% year over year, and EPS was $1.70, up 39.3% over the same period in 2022.

J&J price chart

Revenue at Johnson & Johnson’s Innovative Medicine segment rose 4.2% year over year, to $13.7 billion in the quarter. Its lead immunology therapy, Stelara that treats psoriasis, will soon face biosimilar competition in Europe, but the company has a huge pipeline it says will help its drug sales see 5% to 7% sales gains between 2025 and 2030. Revenue at its MedTech segment, buoyed by the addition of heart pump maker Abiomed, climbed 13.3% over the same period a year earlier to $7.6 billion.

Johnson and Johnson is one of the best blue chip dividend stocks with a dividend yield of around 3%. The company has raised its dividend for 60 consecutive years. 

Ticker  P/E  Dividend Yield
NYSE: JNJ 30.21 3.03%

What Is a Blue Chip Stock?

A blue chip stock is a share of a large, well-established, financially stable company. Generally, they are large-caps, stocks that have a market capitalization of $10 billion or more, with a long record of profitability.

Many blue chips stocks also pay regular dividends and have a history of consistent dividend increases. They can also appear expensive because they generally are popular stocks that are seen as safe-haven investments.

However, if you look at our list of 10 blue chip stocks, nearly all of them outperformed the S&P 500 Index in terms of total return since 2000.

Blue chip chart

Why Invest in Blue Chips?

They are safer investments

Blue-chip stocks have stable earnings and enjoy certain advantages that enable their businesses to thrive across economic cycles. While they are not recession proof, they tend to perform better during economic downturns compared to other stocks.

Johnson & Johnson, for example, handled the Great Recession better than the average stock. During the 2008 financial crisis, the S&P 500 dropped by 54% while Johnson & Johnson fell only 21% in that period.

They frequently pay dividends

Most blue-chip stocks have a long history of paying dividends and the free cash flow that allows them to consistently raise their dividends, as well as do share repurchases.

It’s worth noting that being a blue chip doesn’t necessarily mean the dividend will have a high yield. In the above list, all of the stocks pay a quarterly dividend and Coca-Cola, Johnson & Johnson, LVMH and UnitedHealth Group all have dividends above the S&P 500 average yield of 1.47%.

They are suitable for most types of investors

The potential for steady growth and income that blue chips offer make them suitable for most investors, regardless of whether they’re saving for a child’s education costs, their retirement or any other long-term goal.

While they seldom show meteoric growth due to their size, blue chips stocks tend to post steady appreciation and their lows are not as deep as those of less stable and smaller-cap stocks.

Where to Get Blue Chip Stock Picks and Insights

Investing in blue-chip stocks is one of the simplest forms of investing because blue chips tend to be well-known companies and there’s a lot of information about them. To learn more about blue chip stock picks, we recommend checking out AltIndex.

AltIndex blue chip chart

AltIndex is a subscription-based service uses alternative data and artificial intelligence (AI) to rate stocks and AltIndex updates its data throughout the day. 

AltIndex includes web searches, customer satisfaction ratings, social media, and app downloads, to help it analyze a company. Its lists of best stocks update every half hour and also provide real-time updates on share prices. The lists use an AI score, taken from several datasets, to show which stocks are likely to make a big move and what is propelling that move. Stocks are scored from 1 to 100, simplifying selections for investors.

AltIndex has more than 10,000 members and provides more than 100,000 stock insights and alerts each day and has a strong win rate of 75% from its AI stock picks.

You can try AltIndex’s Starter Plan for just $29 a month and receive stock picks directly to your email, as well many other useful features.

Conclusion

While blue chip stocks are not completely immune to market downturns, they are considered to be safer investments compared to newer or smaller companies. The trade-off is that they also tend to have slower growth than some other stocks. However, their growth is more reliable, and their dividends can provide a reliable source of income for investors.

The best blue chip companies have a market edge in technology, brand, size or all of the above. Blue chip stocks are the type of investments that can be used to increase the stability of a stock investment portfolio.

References

https://www.asml.com/en/investors/why-invest-in-asml/share-buyback

https://www.microsoft.com/en-us/investor/earnings/fy-2024-q2/press-release-webcast

https://investors.caterpillar.com/stock-info/dividend-history/default.aspx

https://www.reuters.com/business/healthcare-pharmaceuticals/us-launches-antitrust-investigation-into-unitedhealth-wsj-reports-2024-02-27/

https://s26.q4cdn.com/747928648/files/doc_financials/2023/Q4-2023-Earnings-Press-Release.pdf

https://www.businessinsider.com/bernard-arnault-lvmh-worlds-richest-person-overtakes-jeff-bezos-2024-3

https://www.coca-colacompany.com/media-center/coca-cola-invites-digital-artists-to-create-real-magic-using-new-ai-platform?ref=abhigarg.com

https://www.reuters.com/business/finance/mastercard-visa-reach-30-bln-settlement-over-credit-card-fees-2024-03-26/

https://www.investor.jnj.com/news/news-details/2023/Johnson–Johnson-Announces-Key-Drivers-for-Long-Term-Competitive-Growth-at-Enterprise-Business-Review/default.aspx

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Jim Halley
Editor

I am an experienced journalist who has also worked as an editor and writer at the Savannah Morning News, Salt Lake Tribune, USA Today, Stars and Stripes, and The Motley Fool. I spent the first half of my career in sports journalism, but in recent years have switched to writing about my other passion, stocks, particularly healthcare, real estate and consumer staples stocks. I've won numerous journalism awards from the Associated Press and state press associations and have been a judge for the Georgia Sportswriters Association. I've written one non-fiction book, Just One More Time, about Georgia Southern football, and…