Blue-Chip Stock

A blue-chip stock refers to shares of a large, well-established, and financially sound company that has operated for many years and has a dependable reputation. Blue-chip companies are leaders in their industries, often with a history of steady revenue growth, reliable earnings, and consistent dividend payments. These stocks are considered safe investments, especially during economic downturns, because of the company’s stability and ability to weather market volatility. Investors often include blue-chip stocks in their portfolios as a way to achieve long-term growth with lower risk compared to smaller, less established companies.

Example

Shares of companies like Johnson & Johnson, IBM, and Procter & Gamble are considered blue-chip stocks due to their long histories, strong financials, and leadership in their respective industries.