A Beginner’s Guide to Blue Chip Stocks
What are the blue-chip stocks?
Blue chip stocks is a term to describe stocks of a well-recognized and established company. Blue chip companies are the pioneers of their industries. Almost always a household name, these companies have been around for decades and are known to withstand tough market conditions successfully.
The term “blue chip stocks” was coined in 1923, in an article by Oliver Gingold who worked at Dow Jones. It was meant to describe high-priced shares and signify their superior value. And the term still remains and is used widely across markets for premium companies.
What are the features of blue chip stocks?
Listed below are some of the defining features of blue-chip stocks:
· They are usually stocks of companies that are older and larger than others in the sector — market cap being in millions to billions;
· They generally have services/products ranging across different sectors;
· They are highly priced stocks and are usually very credit-worthy
· They are less volatile, and usually guarantors of capital growth;
· They perform consistently well, and give steady returns;
· They have a stable debt-to-equity ratio
· They pay regular dividends that grow over time
· They are low-risk instruments with high liquidity
· They are ideal for low-risk investors who want a steady income.
What are the best blue-chip stocks in India?
Listed below are some of the best Indian blue-chip stocks, as per market capitalization:
· Tata Consultancy Services Ltd.
· HDFC Bank Ltd.
· Infosys Ltd.
· ITC Ltd.
· Housing Development Finance Corporation Ltd.
· Coal India Ltd.
· Hindustan Lever Unilever Ltd.
· Wipro Ltd.
· Axis Bank Ltd.
· Larsen & Toubro Ltd.
· Maruti Suzuki India Ltd.
· HCL Technologies Ltd.
· Mahindra & Mahindra Ltd.
· Asian Paints Ltd.
· Bharat Petroleum Corporation Ltd.