The Best Blue-Chip Stocks to Buy for 2021

 These are the highest blue-chip stocks for 2021.

 

The term "blue-chip stocks" connotes a particular sort of investment: well-established, reliable companies with advantageous positions in their markets. Often, the predictability and success of those businesses allow such firms to reward shareholders with regular dividends. Investors during this subset of equity tend to eschew the higher-risk, growth-oriented parts of Wall Street for what tend to be larger-cap stocks with below-average volatility. Blue-chip equities have a tendency to advance and decline but the general market. Here's a glance at U.S. News' list of the ten best blue-chip stocks to shop for for 2021 and the way they're holding up thus far this year. After accounting for dividends, just one has declined thus far .

 

Johnson & Johnson (ticker: JNJ)

 

The consummate blue chip , Johnson & Johnson may be a well-diversified health care and commodity company with a company history dating to 1886. Worth about $470 billion, JNJ is so safe that the large three rating agencies all grade its debt as AAA, the very best rating. By comparison, the U.S. government itself features a AAA rating from only two of the three agencies. Despite reliability that even Uncle Sam can't match, this stock pays a dividend at a 2.4% annual rate, roughly double the 10-year U.S. Treasury yield. JNJ shares have performed well this year, boosted during a large part by the resurgence of its medical devices segment, which saw revenue jump 62.7% within the second quarter as demand for elective procedures began to normalize.

 

Berkshire Hathaway Inc. (BRK.B)

 

The most valuable company on this list, with a market capitalisation of about $650 billion, Warren Buffett's Berkshire Hathaway is another example of practically unmatched stability. an honest example of Berkshire's gravitas came within the wake of the financial crisis, when Berkshire crafted a sweetheart 2011 deal to take a position $5 billion in Bank of America Corp. (BAC), which was suffering a crisis of confidence from investors because it addressed a litany of Great Recession-related lawsuits. Berkshire made a $12 billion return thereon investment within six years and remains the only largest BAC shareholder. Goldman Sachs Group Inc. (GS) and General Electric Co. (GE) also borrowed Berkshire's credibility in crisis-era deals with the financial conglomerate. Widely considered the best investor of all time, Buffett oversaw $12.6 billion available buybacks within the first six months of 2021 – a record pace of buybacks for the conservatively run company .

 

JPMorgan Chase & Co. (JPM)

 

The largest bank within the U.S., JPMorgan is firing on all cylinders as markets enter the ultimate third of the year. Despite its size – the corporate is worth about $470 billion – JPMorgan put up impressive growth metrics within the second quarter as a recovering economy drove credit and open-end credit spending up 22% from the second quarter of 2019. Originations in home and auto lending rose 64% and 61%, respectively, half-moon , while investment banking fees rose 25% to an all-time high as growing activity in mergers and acquisitions drove demand. One catalyst that made JPM one among the simplest blue-chip stocks to shop for at the highest of the year has not disappointed: A pandemic-era Federal Reserve System ban on stock buybacks by large U.S. banks was lifted in 2021, a freedom JPMorgan took advantage of via $10.2 billion in net repurchases within the half of the year. the corporate pays a sustainable 2.3% dividend and trades for about 12 times forward earnings.

 

3M Co. (MMM)

 

An industrial giant, 3M is an incredibly well-diversified company worth north of $110 billion that's been around since 1902. Unsurprisingly, 3M's business is taking advantage of some semblance of a return to normalcy, with its transportation and electronics division (led by areas like automotive parts, its semiconductor business and factory automation) and its health care segment (driven by its oral care, medical solutions and food safety operations) driving growth within the second quarter. Although not the foremost exciting of the simplest blue-chip stocks to shop for , the company's established business lines do enjoy a culture of innovation: 3M strives to possess 30% of revenue come from products introduced within the last four years and allows technical employees 15% of their paid time to figure on personal projects. MMM trades for fewer than 20 times earnings and pays a 3.1% dividend.

 

AbbVie Inc. (ABBV)

 

AbbVie, a drugmaker worth quite $200 billion, boasts an enviable portfolio of medicines that has the world's highest-grossing drug in Humira and a couple of other billion-dollar products, like plaque psoriasis treatment Skyrizi, cancer medication Imbruvica and Botox. More traditional income investors will appreciate ABBV's 4.4% dividend, the second-highest on this list. The stock trades for just 9.5 times forward earnings, making AbbVie one among the more conservatively priced blue-chip stocks to shop for . AbbVie's $63 billion acquisition of Botox maker Allergan is beginning to pay off: half-moon , both cosmetic and therapeutic Botox sales quite doubled year over year.

 

YTD returns: +14.8%

 

The Disney Co. (DIS)

 

An archetypal corporate America success story, entertainment giant Disney, founded in 1923, earned its spot together of the simplest blue-chip stocks to shop for for 2021. Although shares have essentially treaded water this year, the underlying business at the House of Mouse is robust and getting stronger. Parts of its core business like parks, cruises and film distribution were hammered by the sudden onset of the pandemic and have remained soft. Still, Disney is seeing meaningful progress, with its parks, experiences and products division turning a profit half-moon . And importantly, Disney has quickly risen to become a dominant player within the streaming wars with offerings like Disney+, ESPN+ and Hulu encompassing quite 173 million subscribers – not a far cry from Netflix Inc.'s (NFLX) 209 million subscribers.

 

YTD returns: -3.3%

 

AT&T Inc. (T)

 

AT&T fits well within the blue chip category – it is a straightforward, well-established and largely predictable business that cranks out free cash flows sort of a champ. With many billions of dollars invested within the infrastructure needed to supply cable, internet and phone services to many subscribers, AT&T enjoys an enviable competitive advantage that dramatically limits competition. If it's capital gains you're after, then AT&T is not the best play, but if you're simply trying to find a stable company paying a high dividend, the stock may be a fitting choice. AT&T pays a 7.5% dividend, the very best on this list.

 

YTD returns: +1.0%

 

The Procter & Gamble Co. (PG)

 

A classic consumer defensive stock, Procter & Gamble is that the oldest company on this list, having been founded in 1837. very much like times may change certain industries, Procter & Gamble is actually timeless and recession-proof, selling necessities like toothpaste, razors, laundry and dish detergent, toilet tissue , and shampoo. Its highly recognizable brands are too numerous to list but include Tide, Crest, Gillette and Pampers. you'll calculate reliable single-digit revenue and earnings-per-share growth year in and year out. A dividend aristocrat, PG has raised its dividend payout for 64 consecutive years. The $350 billion company currently offers a 2.4% dividend yield. within the last financial year , the corporate returned $19.3 billion to shareholders through buybacks and dividends.

 

YTD returns: +6.2%

 

Lowe's Cos. Inc. (LOW)

 

Also named to U.S. News' overall list of the simplest stocks to shop for for 2021, home improvement retailer Lowe's is coming off a blockbuster 2020 on the heels of increased pandemic-driven demand from do-it-yourselfers, a surge in remodeling projects and a red-hot land market. Although familiar with playing second fiddle to larger rival Home Depot Inc. (HD), Lowe's still looked cheaper than its primary competitor to start out the year. Its August earnings announcement reiterated why Lowe's is that the better pick between the two: The day after Home Depot fell 4% on a disappointing quarterly report, LOW stock jumped 9.6% as its quarterly earnings surpassed analyst expectations. Lowe's also offers a modest 1.5% dividend and has many room to boost it, supported robust earnings.

 

YTD returns: +31.1%

 

Cigna Corp. (CI)

 

Last, and least by market cap, is health care insurer Cigna, which at about $70 billion is one among the most important health insurers in America. Cigna is coming off a rough second-quarter income statement that triggered an 11% one-day haircut because the company reported higher-than-expected costs for both COVID-19 and non-COVID-19 medical expenses. The news was simply a results of behavioral changes among those Cigna covers: People were getting easier seeking out discretionary medical procedures within the second quarter because the pandemic seemed to wane. Although the short-term prospects for Cigna are cloudy, CI stock still seems like a long-term winner, trading for less than about 10 times forward earnings. Analysts agree, with a consensus price target of $275.44 for shares, a roughly 33% upside to its most up-to-date close.

 

YTD returns: +0.5%

 

The 10 best blue-chip stocks to shop for for 2021:

 

Johnson & Johnson (JNJ)

Berkshire Hathaway Inc. (BRK.B)

JPMorgan Chase & Co. (JPM)

3M Co. (MMM)

AbbVie Inc. (ABBV)

The Disney Co. (DIS)

AT&T Inc. (T)

The Procter & Gamble Co. (PG)

Lowe's Cos. Inc. (LOW)

Cigna Corp. (CI)

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