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Best blue chip stocks to buy in 2021
On this page, we cover the basics of a blue-chip stock, show you where to buy them, and pick out five options for you to consider. Scroll down to get started straight with a broker straight away, or read on to learn more about the companies chosen.
What are the top blue chip stocks to buy?
These are the best blue-chip stocks to get right now. Click through the links in the table to find the most up to date price information, or find a more detailed explanation as to why each one has made the list below.
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1. McDonald’s (NYSE: MCD)
The fast-food giant, McDonald’s, leads our list. Set up in 1940, the company famous for its twin arches logo is now the largest restaurant chain and one of the biggest employers in the world.
Since the turn of the century, McDonald’s has been rapidly expanding its global reach. These days, it operates tens of thousands of restaurants in more than 100 countries, and its share price has been on an upward trajectory for many years.
Many blue-chip stocks have a long tradition of paying dividends, and McDonald’s is no different. It’s a member of the Dividend Aristocrats club, a group of companies that have raised their dividend every year for at least a quarter of a century. McDonald’s is a great place to put your money to generate steady returns over time.
2. International Business Machines (NYSE: IBM)
IBM is most famous for being one of the most inventive companies around. It develops computer hardware and its list of creations includes things like the ATM, hard drives, and the SQL programming language. It has registered the most annual patents of any business for almost thirty years in a row.
The company hasn’t performed as well as might be expected in recent times, and its share price had stagnated before the coronavirus pandemic hit. Since then, there has been something of a recovery, driven in part by Red Hat, a cloud software company that’s owned by IBM.
Like McDonald’s, IBM is a member of the Dividend Aristocrats and rewards its shareholders with a dividend every year. You can count on that continuing, while the company has streamlined its operations to cut costs and provide a better service in the future, something which should encourage more growth than we have seen in recent times.
3. Visa (NYSE: V)
Visa is a financial services company whose name is almost synonymous with card payments across the world. It has been around since 1958 and is now one of the most valuable companies on the planet. It’s the largest card payment provider outside China, and about 50% of all card transactions in the rest of the world are done through Visa.
A lot of Visa’s growth has come in the last few years, as credit and debit cards have become more widespread. It’s only been a public company since 2008 but the share price has been on an almost constant upward trajectory since then. It’s position is now so dominant, even compared to Mastercard, its closest western competitor, that it looks like it should be secure for the long term.
One of the features of Visa’s growth is that it often acquires other fintech companies with unique features and absorbs them into the service it offers. That has allowed it to improve its money management, cross-border payments, and cryptocurrency offerings in the last couple of years alone. Visa is undoubtedly one of the strongest companies in the world to own right now.
4. Apple (NASDAQ: AAPL)
Apple is one of the most well-known companies around. The iPhone, iPad, and Mac computer have all revolutionised the technology industry and ushered in a new age of design and communication. Apple is the most valuable brand and one of the largest businesses on the planet.
The stock price has increased steadily for over a decade, ever since the first iPhone was released in 2007. The tech boom that followed the coronavirus crash in March 2020 further boosted its stock, to the extent that it took over the top spot as the world’s most valuable company at the beginning of 2021.
Apple doesn’t pay a dividend but spends that money on maintaining its position as a leader in innovation. It routinely creates new technology that redefines our lives and its shareholders are rewarded by an increase in the price of their holdings instead. It has been one of the best companies to own for a long time and there are no signs of that changing.
5. Walt Disney (NYSE: DIS)
The Walt Disney Company is a leader in a range of industries, from film and television to theme parks. It was originally set up in 1923 and began life as an animation film studio before steadily expanding over the years.
The majority of Disney’s stock is owned by large financial institutions. That makes it less volatile than many other companies but hasn’t stopped it growing. The company’s value has gone up 30% since the start of the pandemic and more than 80% over the previous five years.
Steady growth is the name of the game, and its recent successes have been despite the fact that its theme parks – a major source of revenue – have been closed or at limited capacity throughout the pandemic. It’s traditionally been a good dividend stock as well, although they were suspended during the worst of the crisis. Their reinstatement is likely to be another reason to invest in the future.
Where to buy the best blue chip shares
Use one of the platforms below to get any of these shares right now. They are the best online stock brokers around today and all of them are easy to get started with.
What is a blue chip stock?
A large, well-known company that has been successful for a long time. A blue-chip stock has a high market capitalisation, a good reputation, and often quite expensive shares. The reason for paying extra to own them is because the reward is a stake in a quality and reliable company that you can own for many years.
Are blue chip shares a good investment?
They are some of the best stocks to own. Even though they can be expensive, owning just one or two shares in a blue-chip company can often be the best way to invest in the stock market. There’s little risk and you should be able to trust their leadership to keep delivering good performance over time.
A good way to build a balanced portfolio is to own a combination of blue-chip companies along with some other types of stock that might have more potential to grow quickly. That way, you can use the larger companies as anchors and take a few more risks with the rest of your money.
It’s important to note that even the most famous businesses can be affected by new developments or changes in the market. Whatever you decide to spend money on, make sure to follow the latest news and analysis so that you have all the information you need to make the right investment decisions.
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Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
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