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Blue-Chip Stocks

Blue-chip stocks refer to companies with a long history of sustained earnings and dividend payments. These established companies have developed leadership positions in their respective industries and, because of their importance and large size, have stable earnings and dividend records. Most companies in the Dow Jones Industrial Average are considered to be blue-chip companies.

Additional Comments:

Blue-chip companies appeal to investors who seek quality companies with histories of growing profits and regular dividend payouts. These types of companies tend to be less risky in periods of economic uncertainty because of their dependable earnings. In a bear market, the stock prices of blue-chip companies tend to decline less than those of growth companies that do not pay dividends.rnrnInvestors are attracted to blue-chip stocks because they not only provide a store of wealth in anticipation of capital appreciation but also deliver regular dividend income.

Related Terms:

Income Stocks
Income stocks have high dividend payouts, and the companies are typically in the mature stages of ...

Cash Dividends
A cash dividend is a dividend paid in cash. To be able to pay cash dividends, ...

Value Stocks
Value stocks are stocks that have lower prices relative to their fundamental values (growth in sales ...

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