June 16, 2024
Stock Market

Steady Eddies: 3 Blue-Chip Stocks to Buy for the Long Haul


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Blue-chip stocks refer to stocks of large, well-established companies with a reputation for high-quality, reliable investments. They tend to be industry leaders in their sectors and have a large market capitalization in the billions of dollars. This led us to create our list of blue-chip stocks to buy and hold for the long haul.

The precise definition of blue-chip stocks can be subjective, though. However, blue-chip companies can offer general stability through consistent, steady performance without witnessing dramatic fluctuations in their share prices. They are overall better candidates to buy and hold for the long haul.

This makes blue-chip stocks ideal for investment strategies seeking to balance portfolios and mitigate volatility. It may be more pertinent to buy and hold now. This is especially true as the Federal Reserve (Fed) estimates a 61% recession probability within the next 12 months.

Whether looking to diversify a portfolio, strive for stability, or simply have the appetite to avoid turbulence in light of the upcoming national elections, the following three blue-chip stocks represent an opportunity for steady returns in the long haul. They are well-suited as long-term blue-chip stocks to buy and hold:

APPLE (AAPL)

Close-up of Apple (AAPL) retail store Logo in Honolulu at the Ala Moana Center. Advertising the latest generation of the ipad, iphones, and ipods with a Retina display.

Source: Eric Broder Van Dyke / Shutterstock.com

The world’s most profitable company, Apple (NASDAQ:AAPL), enjoys a history of sustained growth and expectations for continued expansion going forward. Don’t just take our word for it. This was said by renowned investor Warren Buffett. It should be noted that he did modestly downsize his stake in the company recently.

While shares retreated somewhat on disappointing sales from the Chinese market, Apple’s strong brand and financial position imply further potential. Nonetheless, Apple’s sales in China rebounded to more than $70 billion in 2021 and 2022 following covid. Accounting for around 20% of AAPL’s sales, China will remain critical for the company’s revenue and success.

At a price-to-earnings (P/E) ratio of 28.6x, below the technology sector average of 31.6 times. The company boasts a market cap of 2.8 trillion and has beaten all analysts’ quarterly EPS expectations in 2023. Apple also offers a marginal dividend yield of 0.52%.

Anheuser-Busch InBev  (BUD)

Bud Light Beer 36 pack beer cans display at grocery store.

Source: Michael Vi / Shutterstock.com

Brewers are known for resisting economic downturns. This makes AB InBev (NYSE:BUD) an exciting choice for investors looking for long-term blue-chip stocks to buy and hold. As the largest in the United States and globally, AB InBev benefits from global consumer demand in the context of investment hedge even during economic turbulence.

The company involved themselves in a marketing controversy last year through its flagship Bud Light but has since normalized, leaving an opportunity for further shareholder gains. However, potential March strikes may put the stock in a better position to consider buying should BUD fail to negotiate contract terms with Teamsters successfully.

At a P/E ratio of 20.3x, below the industry average of 25.5 times, AB InBev also offers a forward dividend of 1.3%. Like AAPL, the company has also beaten all quarterly analysts’ EPS estimates in 2023.

Johnson & Johnson (JNJ)

A red Johnson & Johnson (JNJ) sign hangs inside in Moscow, Russia.

Source: Alexander Tolstykh / Shutterstock.com

Johnson & Johnson (NYSE:JNJ) is widely recognized as a leading global healthcare company. Having recently spun off its consumer products division in 2023 into Kenvue (NYSE:KVUE) in a deal involving $36 billion, JNJ can now focus its efforts on the healthcare sector.

Specifically, it can channel its expertise and resources into medical devices, diagnostics, and pharmaceutical research and development. Moreover, JNJ’s product pipeline contains more than 90 additional drug candidates currently progressing through clinical trials.

In addition to numerous well-known medications, JNJ’s diversification and financial strength support its 30x P/E ratio. The company also offers shareholders a healthy dividend yield of 3.1%, representing another opportunity for a long-term blue-chip stock to buy and hold.​

On the date of publication, Stavros Tousios 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.

Stavros Tousios, MBA, is the founder and chief analyst at Markets Untold. With expertise in FX, macros, equity analysis, and investment advisory, Stavros delivers investors strategic guidance and valuable insights.

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