Home Companies Blue Chip Stocks – How to Pick the Top 10 Best Blue Chips

Blue Chip Stocks – How to Pick the Top 10 Best Blue Chips

by gbaf mag

Blue chip stocks are investments in the best companies in the stock market. Blue chip companies are well established, reliable, dividend paying stocks. They also tend to have a solid history of paying consistently rising dividends and are market leaders. Blue chip stocks also tend to stay profitable even during economic recessions. Here are some tips to picking the best blue chip stocks.

First, you need to know what to look for in a good blue chip stocks. The stock should have been around for at least five years. It should have consistently paid off its dividends and been able to maintain its price for a period of time. Price/earnings ratio is a good indication of the health of the company. The higher the P/E the better the stocks.

The next thing to look for in blue chip stocks is their history of producing returns. Companies that have produced returns consistently over a long period of time are usually on the list of the best blue chip stocks. A company with a history of dividends being paid off, generating high profit margins, and paying off regularly is a sign of strong future profits. It’s also a good idea to check out the companies’ financial statements to see how they make their money.

A company with a history of consistent high-quality dividend payments, strong financials, and a history of generating cash flow should be on your list of blue chip stocks. A company with only good financials, low profit margins, and no history of dividend payments is NOT good blue chip stocks. Dividends yield is not an accurate representation of the companies’ ability to generate cash flow. Paying dividends doesn’t always mean the company is making money.

Next, check the return expectations of the company. A company’s return on equity is an important part of their financial expectations, but return on equity does not provide a complete picture. Most blue chip stocks will have some growth expected in the future. If there is not enough growth in the future the expected EPS growth will probably be less than the current EPS. This is another way to reduce the expected eps growth of the business.

The next thing to look for in blue chips is their market cap. A company’s market cap is simply the value of the company multiplied by the current price. Blue chip stocks have generally been able to maintain their price throughout most of the history of trading. That means the potential return on investment for these stocks will be higher than the overall average because the risk of loss is lower.

To help determine which blue chip stocks will perform well during a bull market, look at the financial statements of the companies. Companies with positive financial statements will have no difficulty sustaining their EPS growth during good economic times. Also look for the companies that are ranked very high on the Dow Jones Industrial Average. These stocks will often go up and down in relation to the overall market. If you can find one of the top 10 best blue chip stocks that is consistently making money, that may be the sign of a strong blue chip stocks worth buying.

Lastly, determine the PEG ratio of the company. The PEG ratio measures the annualized earnings per share through the first six months of market history. This ratio is best found in the annual report provided to the investors of the company. Using this information, it is easy to determine if a company is a good buy or not.


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