The mid-term elections are over, but the market volatility will probably continue. The ongoing trade war with China is one issue that has the market seeking direction, there’s the ongoing debate about the future of health care policy, and inflation is peeking its head above the economy and could be an issue for businesses in 2019.
But let’s not be a party pooper. The period right after mid-term elections is typically the best time to invest and there are plenty of market fundamentals (including the continued strength in the job market) that indicate this year will be no different.
However, for investors to get the benefit of this robust economy they need to balance growth with income, and that increases the appeal of blue-chip stocks.
Blue-chip stocks give investors a Goldilocks solution to stock selection. They may not be red-hot stocks, but they’re not overly conservative either. They offer the benefits of growth and the security of income. That combination makes them safe stocks that can provide an anchor for a portfolio during volatile times. Three of the characteristics that define blue-chip stocks are that they are well-known companies, they have a strong record of positive earnings and dividends, and they are widely held by investors.
We’ve put together a list of 10 blue-chip stocks that are a solid anchor for your portfolio at any time.
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- 3M
- Amazon
- Microsoft
- Visa
- Netflix
- Nike
- Union Pacific
- Southern Company
- Walt Disney
- Aflac
#1 - 3M (NYSE:MMM)
3M (NYSE: MMM) Since dropping 28% off its all-time high in January, 3M’s stock may have found a bottom. In a time where many companies are looking to shed extraneous business units to focus on “core competencies”, 3M has embraced a wide range of products and services beyond the office supplies it has become known for. But the real competitive advantage for 3M is research and development (R&D) that allows them to create products that offer value beyond their price, making them more than a commodity, and giving them the ability to have more control over prices. The investment has given the company the ability to make sales regardless of the economy, essentially turning it into a defensive stock, and has given them an ability to grow both their revenue and earnings per share (EPS). Like many blue-chip stocks, 3M is a dividend king, paying and increasing a dividend every year since 1977, and analysts see no sign that the trend will end in 2018.
About 3M
3M Company provides diversified technology services in the United States and internationally. The company's Safety and Industrial segment offers industrial abrasives and finishing for metalworking applications; autobody repair solutions; closure systems for personal hygiene products, masking, and packaging materials; electrical products and materials for construction and maintenance, power distribution, and electrical original equipment manufacturers; structural adhesives and tapes; respiratory, hearing, eye, and fall protection solutions; and natural and color-coated mineral granules for shingles.
Read More - Current Price
- $129.28
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 11 Buy Ratings, 3 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $144.87 (12.1% Upside)
#2 - Amazon (NASDAQ:AMZN)
Amazon (NASDAQ: AMZN) If investors think that Amazon’s stock does not have room to grow, they need to take a closer look. Consumers certainly are. A recent report from CNBC shows the beginning of what could be a trend for advertisers moving their advertising dollars away from Google and towards Amazon. The rationale is that Amazon is where many consumers (some estimates say the number could be as high as 55%) are beginning their search for products, so it’s logical that advertisers would want to be in place to capture those eyeballs. This is setting up to be a lucrative space for Amazon, but it’s only part of the story. With plans to buy Landmark Theaters, AMZN is poised to have a location for its original content. And Amazon continues to make inroads into the consumer packaged-goods arena which is projected to be a $760 billion market by 2020. Amazon has already shown its ability to step into new markets like health and household essentials and quickly become a market share leader. If successful, their move into packaged goods will continue to show how the company finds ways to use its existing businesses to shorten its time to market in other sectors.
About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Echo, Ring, Blink, and eero; and develops and produces media content.
Read More - Current Price
- $224.92
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 42 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $243.00 (8.0% Upside)
#3 - Microsoft (NASDAQ:MSFT)
Microsoft (NASDAQ: MSFT) Another tech stock that deserves to be part of a stable, blue-chip portfolio is Microsoft. During the recent October correction, Microsoft’s stock only dropped 6.6% compared with competitors’ stock that fell over 20%. The stock is up over 20% for the year and has averaged 26% over the last five years. At first glance, investors may look at the dominant market share they receive from their Windows operating system and wonder where is the growth coming from? Microsoft has been less successful at breaking into the mobile arena as Android and iOS systems have made it difficult for Windows to gain traction on mobile devices. However, that doesn't mean Microsoft will be left behind. Mobile computing relies on cloud storage, and Microsoft is well positioned in this space with their cloud operating division, Azure. The company is also aggressively pursuing the nascent artificial intelligence market and making inroads into the Internet of Things. Meanwhile, their Xbox One gaming console remains popular and the company is beginning to make inroads with their Surface brand of laptop/tablet hybrids. Put it all together and you see a company that is becoming much more multi-faceted and well-positioned for growth beyond their Windows operating system.
About Microsoft
Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.
Read More - Current Price
- $436.60
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 26 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $508.46 (16.5% Upside)
#4 - Visa (NYSE:V)
Visa (NYSE: V) In an increasingly paperless, and cashless, society, Visa is showing its strength. This blue-chip financial company has seen its stock rise 37% in the past 12 months. Visa stands to capture a large segment of the market as consumers and financial institutions are moving away from cash and towards the convenient of debit cards. But this is not just a United States issue. In fact, the United States may not even be the tip of the spear. Instead, you can look at developing economies where debit cards are becoming the primary payment method. But the strength of Visa goes beyond the debit card arena. Visa’s stock continues to outperform other mobile payment systems such as PayPal. Investors who do not currently own Visa should keep an eye on their valuation. The stock currently has a Forward P/E ratio of 26.26 which puts the stock at a premium to the industry average.
About Visa
Visa Inc operates as a payment technology company in the United States and internationally. The company operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. It also offers credit, debit, and prepaid card products; tap to pay, tokenization, and click to pay services; Visa Direct, a solution that facilitates the delivery of funds to eligible cards, deposit accounts, and digital wallets; Visa B2B Connect, a multilateral business-to-business cross-border payments network; Visa Cross-Border Solution, a cross-border consumer payments solution; and Visa DPS that provides a range of value-added services, including fraud mitigation, dispute management, data analytics, campaign management, a suite of digital solutions, and contact center services.
Read More - Current Price
- $317.71
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 25 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $328.41 (3.4% Upside)
#5 - Netflix (NASDAQ:NFLX)
Netflix (NASDAQ: NFLX) Remember a few years ago when people thought the idea of streaming content was a fad? Remember when investors were presuming that a company like Netflix had to have more to offer than just being an alternative to their local video store? Then Netflix started creating its own content and the ballgame changed. The company continues to fundamentally change not only how we watch, but what we watch. The company faces competition in the streaming space as evidenced by it recently missing on its subscriber goals which caused its stock to take a small loss. However, with the stock up 64% for the year, it seems investors are not jumping ship. One of the reasons for this is that the company continues to sign major talent, such as the creator of the ABC hit show Black-Ish, Shonda Rimes (Grey’s Anatomy) and Ryan Murphy (American Horror Story). Not only does this create confidence that Netflix will continue to create compelling new content while keeping this talent off the market.
About Netflix
Netflix, Inc provides entertainment services. It offers TV series, documentaries, feature films, and games across various genres and languages. The company also provides members the ability to receive streaming content through a host of internet-connected devices, including TVs, digital video players, TV set-top boxes, and mobile devices.
Read More - Current Price
- $909.05
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 23 Buy Ratings, 10 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $807.70 (11.1% Downside)
#6 - Nike (NYSE:NKE)
Nike (NYSE: NKE) Normally, when a company is not in the news, it’s not a good sign for the stock. But in the case of Nike, no news means no bad news. When you consider the controversies surrounding Under Armour and Adidas, particularly with major college sports, staying out of the news is very good for Nike’s stock. Their relative lack of news is not to say that Nike has been a laggard. The stock is up over 40% in the past 12 months. Part of the reason for the growth is increasing revenues in the United States as the economy has strengthened. One of the major speed bumps for Nike, as well as its competitors, is the ongoing trade war with China. Slower sales in China will be a drag on sales in Asia in general. However, the brand is still showing global strength and, in fact, investors largely shrugged off the 11% October correction in the stock that was slightly higher than the 7% decline in the S&P 500.
About NIKE
NIKE, Inc, together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, accessories, and services worldwide. The company provides athletic and casual footwear, apparel, and accessories under the Jumpman trademark; and casual sneakers, apparel, and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell trademarks.
Read More - Current Price
- $76.94
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 15 Buy Ratings, 14 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $89.77 (16.7% Upside)
#7 - Union Pacific (NYSE:UNP)
Union Pacific (NYSE: UNP) One of the cornerstones of a healthy economy is the idea of moving goods from point A to point B. And with the U.S. economy growing, and expected to grow even more with the mid-term elections behind us, investors should look at a company such as Union Pacific. UNP is more than a railroad; it's branched out into intermodal transportation services which are keeping the company relevant in the 21st-century economy. As evidence of that, the stock is up over 40% in the past 12 months. A swift resolution to the trade war and dueling tariffs would be a welcome benefit for the company. But even if the trade war lingers, UNP should benefit from increasing consumer spending of goods and services in the United States. Fundamentally, this blue-chip stock is known for having a strong balance sheet, a history of paying out – and growing – dividends, and a low payout ratio.
About Union Pacific
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers.
Read More - Current Price
- $226.32
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 12 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $259.80 (14.8% Upside)
#8 - Southern Company (NYSE:SO)
Southern Company (NYSE: SO) Utility stocks are frequently considered to be solid, blue-chip stocks for many investors. Generally, they enjoy monopolies in the areas they serve, helping them receive a steady revenue stream in those markets. After all, consumers need the basic services that they provide. One of the appeals of utility stocks is their ability to pay a dividend. In that respect, Southern Company does not disappoint. Southern Company is the nation’s second-largest utility company with a customer base of around 9 million. In addition to having an attractive 5.4% dividend yield, Southern Company is considered a dividend aristocrat, having paid out a regular dividend for 70 years, including 16 years where the annual payout has been on the rise. But what makes this stock an attractive play right now is that it’s actually showing growth. The company has expanded its unregulated business beyond its typical role in power generation and electrical distribution (which are highly regulated markets) to include natural gas (less regulated). They have done this through acquisitions and saw Q1 profits soar 33% from the same period last year.
About Southern
The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, gas distribution operations, and gas pipeline investments operations.
Read More - Current Price
- $82.86
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $90.14 (8.8% Upside)
#9 - Walt Disney (NYSE:DIS)
Walt Disney (NYSE: DIS) Admit it, when you look through your social media feed it’s hard to deny that Walt Disney World, and its surrounding properties, continues to have tremendous appeal regardless of the time of year. So while they are increasingly being known, and defined, as an entertainment brand, they are still magical at monetizing their theme parks and resorts which help offset any weakness it may suffer in its entertainment business. As a case in point, in 2017 despite weakness in its studio business, the company was able to limit its earnings decline to a single percent largely due to strength in its theme parks. Although analysts expect Disney to enjoy continued revenue growth through its parks and resorts, as well as the release of several successful films such as Ant Man and The Wasp, they are equally excited about Disney’s successful bid to buy select assets of 21stCentury Fox which would broaden its content base.
About Walt Disney
The Walt Disney Company operates as an entertainment company worldwide. It operates through three segments: Entertainment, Sports, and Experiences. The company produces and distributes film and television video streaming content under the ABC Television Network, Disney, Freeform, FX, Fox, National Geographic, and Star brand television channels, as well as ABC television stations and A+E television networks; and produces original content under the ABC Signature, Disney Branded Television, FX Productions, Lucasfilm, Marvel, National Geographic Studios, Pixar, Searchlight Pictures, Twentieth Century Studios, 20th Television, and Walt Disney Pictures banners.
Read More - Current Price
- $112.03
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 19 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $123.58 (10.3% Upside)
#10 - Aflac (NYSE:AFL)
Aflac (NYSE: AFL) Healthcare, and how to pay for it, is one sector that will remain at the forefront of consumer's minds and wallets well into 2019 and beyond. Aflac is a supplemental insurance provider that helps consumers by providing insurance that can help them pay the high costs that come from unanticipated health costs. But while Aflac is well-known in the United States, it earns 75% of its profits from Japan. From a fundamental perspective, there's a lot to like about Aflac. To begin with, the stock trades at 11 times forward estimates on 2019 earnings, and they have earnings per share growth for next year that is forecast at 1.99%. But one of the real appeals of a stock like AFL is the dividend. Aflac is a dividend aristocrat, having issued a dividend for the last 36 years. And they are also expecting to see a benefit from a stronger Japanese yen.
About Aflac
Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. The company operates through Aflac Japan and Aflac U.S. segments. The Aflac Japan segment offers cancer, medical, nursing care, work leave, GIFT, and whole and term life insurance products, as well as WAYS and child endowment plans under saving type insurance products in Japan.
Read More - Current Price
- $102.69
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 9 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $98.73 (3.9% Downside)
Historically, the period after a mid-term election is a great time to be invested in stocks, and 2018 looks to be no different. With institutional investors taking a closer look at fundamentals now that the noise of the election has quieted down, it's a time for investors to take a close look at blue-chip stocks that provide both steady income by way of a dividend – and the potential for growth by being in markets and sectors that are at the core of a robust U.S. economy. The blue-chip stocks in this presentation represent a cross-section of stocks. From technology to healthcare to utilities, you can find quality stocks that will help provide diversification for your portfolio. You can track these stocks, as well as others, at MarketBeat.com and bolster your portfolio for 2019 and beyond.
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