Investing in blue-chip companies, which are enormous growing companies with excellent reputations might just be what you are looking for a secure long-term investment. The world of stock investment can come with a huge risk, but when it comes to long-term investments with blue chips, it can be quite rewarding and reliable, with high returns. Firstly, these companies can attribute to a diverse portfolio, and during market failure or correction, blue-chip stocks are best known to protect capital erosion. Moreover, strong and excellent cash flows have been acquired by most blue-chip companies. However, it is essential to understand that blue-chip stocks may not be ideal for short-term investments with multi-fold returns. But, a constant value formation of shareholders can be noticed through repurchase of shares and dividents.
Latest research and analysis done on the blue chip stock market, as of November 2021, points out several top blue chip stocks with potential divident yield to buy for long-term investment. Here are some best blue-chip stocks to look out for:
1 Apple (AAPL)
Recently, as of 2021, a low trend has been observed with AAPL stock. But Apple company has been quick enough to bounce back higher in the initial period. Apple has continuously delivered strong and reliable numbers. The company announced its new record growth of revenue by 29%, $83.4 billion in the fourth quarter of 2021. In the recent trend, iPhone 13 sales are likely to ensure stable, and robust growth. Apple is also seeking further diversification of cash surplus with their rumored appearance into the electric vehicle segment. America, Greater China, and Europe remains to be their main revenue drivers, and for the last months a strong revenue growth of 34% has been made by whole of Asia. Overall, on the perspective of long-term investment the AAPL stock remains reliable and attractive for divident growth.
2 Tesla (TSLA)
In just a month, TSLA stock trended higher by 27%, though earlier, it witnessed a sharp recovery. According to the analyst Gene Munster of Loup Ventures, Tesla is potential to become a $Gene Munster Trillion Company with the possibility of the company revenue expanding from $70 billion to $400 billion in the coming 5 years. The main reason behind this promising stock would be that the adoption of electric vehicles being at an early stage globally, has a great scope for revenue growth. As per Deloitte reports, sales of electric cars are bound to increase at a CAGR of 29% till 2030. Also, Tesla's gigafactories in China and US, including Europe are likely to start deliveries by 2022, which would further generate revenue growth. With the world becoming more advanced in terms of innovation and technology, Tesla would be worth buying top blue-chip stocks for future perspectives.
3 Pfizer (PFE)
PFE stock might be undervalued among blue-chip stocks, but with a potential rally in the future perspective. Currently, the stock trades at 10.8x of forwarding P/E and provides investors a dividend yield of 3.57%. Robust revenue growth has been reported by Pfizer in 2021, driven largely by the COVID-19 vaccine. However, not considering the vaccine impact, their growth of revenue was at 10%. With the increasing need for medicinal drugs, the company expects further revenue growth of a CAGR of 6% through 2025. From COVID-19 vaccines, the company estimates $33.5 billion in revenue and expects to deliver 2.1 billion doses of vaccine in a year, with the capacity to generate 3 billion doses in 2022. The company has also been approved by the US Food and Drug Administration for the production of the 5-11 years old COVID-19 vaccine. This ensures a strong cash flow throughout 2022. With reliable and continuous ash flows in the future, Pfizer's blue-chip stock would be promising for driving long-term growth.
4 Microsoft (MSFT)
MSFT stock has been among the blue-chip stocks that experienced a great rally in 2021. But considering its well-built business momentum, MSFT stock is expected to remain uptrend. Recently, the company's revenue growth reported was $45.3 billion, and Microsoft Cloud, for the quarter, accumulated a revenue growth of 36% to $20.7 billion. This unveils their cloud business being strong and reliable by contributing to nearly 50% of its total revenue. It is important to understand that as of September 2021, the cash and equivalents of Microsoft were reported to be $130 billion. It is also worth noting that at the beginning of 2021, Microsoft brought Nuance Communications. This acquisition is much likely to help the company accelerate cloud strategy for healthcare. During Quarter 1 of 2022, the company returned its shareholders $10.9 billion. Considering the balance sheet health and strong cash flows, hostile repurchasing is expected to continue.
5 Amazon (AMZN)
Amazon gave reports of Q3 2021 results recently. Their net sales have risen by 15% on a year-on-year basis to $110.8 billion. The growth of sales has continued for Amazon Web Services with 39% year-over-year growth. In the coming quarters, AWS is likely to remain as their main growth driver. In the past 12 months, and operating cash flow of $54.7 billion has been reported by the company. Therefore, with their consistent cash flows, the company acquired flexibility in financial perspective to go after organic, as well as acquisition-driven growth. Amazon, over the past years, has consumed $34.9 billion just in acquisitions. Ecommerce has experienced intense competition in the market. However, blue-chip companies like Amazon continues to invest in technology and services. With its presence in different emerging markets, Amazon's e-commerce is likely to remain a cash flow generator to a great extend. The AMZN stock is also predicted to trend higher in the coming years.