Deepshikha | Nov 10, 2021 |
UK Top 10 Bluechip Stocks to Invest in November 2021
The term “blue-chip stocks” refers to a certain sort of investment: well-established, dependable enterprises with competitive market positions. Because of the consistency and performance of these businesses, stockholders are frequently rewarded with regular dividends. This segment of equities investors tends to avoid the higher-risk, growth-oriented portions of Wall Street in favor of larger-cap businesses with lower volatility. Blue-chip stocks tend to rise and fall at a slower pace than the entire market. Here’s a look at the 10 best blue-chip stocks to purchase for 2021, according to U.S. News, and how they’ve performed so far this year. So far, only one has dropped after dividends have been taken into consideration.
Johnson & Johnson, well-diversified health care and consumer goods firm with a corporate history extending back to 1886, is the quintessential blue-chip stock. JNJ, with a market capitalization of $470 billion, is so secure that its debt is rated AAA by all three major rating agencies. In comparison, only two of the three agencies have given the US government a AAA rating. Despite having a level of dependability that even Uncle Sam can’t match, this stock offers a 2.4 percent yearly dividend, which is approximately double the yield on a 10-year US Treasury bond. The revival of JNJ’s medical devices division, which saw revenue soar 62.7 percent in the second quarter as demand for elective treatments began to stabilize, has helped the stock’s performance this year.
Warren Buffett’s Berkshire Hathaway is the most valued firm on this list, with a market valuation of almost $650 billion. It is another example of practically unrivaled steadiness. In the aftermath of the financial crisis, Berkshire devised a sweetheart 2011 deal to invest $5 billion in Bank of America Corp. (BAC), which was dealing with a litany of Great Recession-related lawsuits and was experiencing a crisis of confidence from investors. Berkshire Hathaway achieved a $12 billion profit on the investment in just six years and is still the company’s largest stakeholder. In crisis-era partnerships with Berkshire, Goldman Sachs Group Inc. (GS) and General Electric Co. (GE) also used the financial conglomerate’s credibility. Buffett, widely regarded as the greatest investor of all time, presided over $12.6 billion in stock buybacks in the first half of 2021, a new high for the conservatively run holding corporation.
JPMorgan Chase & Co., the largest bank in the United States, is on fire as the year draws to a close. Despite its size – JPMorgan is valued at around $470 billion – the corporation delivered outstanding growth in the second quarter, with credit and debit card expenditure up 22% from the second quarter of 2019. Last quarter, house and auto loan originations increased by 64 percent and 61 percent, respectively, while investment banking fees increased by 25 percent to an all-time high, thanks to increased mergers and acquisitions activity. One factor that made JPM one of the greatest blue-chip stocks to buy at the start of the year has proven to be successful: In 2021, the Federal Reserve relaxed a pandemic-era ban on large U.S. banks’ stock buybacks, which JPMorgan took advantage of with $10.2 billion in net repurchases in the first half of the year. The company offers a 2.3 percent dividend that is sustainable, and it trades at around 12 times forward earnings.
3M is an industrial behemoth with a market capitalization of more than $110 billion and a history dating back to 1902. Unsurprisingly, 3M’s business is benefiting from some semblance of normalcy, with growth in the second quarter driven by its transportation and electronics division (led by automotive parts, its semiconductor business, and factory automation) and its health care segment (driven by its oral care, medical solutions, and food safety operations). The company’s established business divisions benefit from a culture of innovation, even if it isn’t the most exciting of the finest blue-chip stocks to purchase. 3M aims to generate 30% of income from new products introduced in the last four years and permits technical personnel to work on personal projects for 15% of their paid time. MMM delivers a 3.1 percent dividend and trades for less than 20 times earnings.
AbbVie, a manufacturer with a market capitalization of more than $200 billion, has an amazing portfolio of drugs, including Humira, the world’s highest-grossing drug, and a handful of other billion-dollar goods including plaque psoriasis therapy Skyrizi, cancer medication Imbruvica, and Botox. The 4.4 percent dividend paid by ABBV, the second-highest on this list, will appeal to more traditional income investors. AbbVie is one of the more conservatively valued blue-chip stocks to purchase, trading at just 9.5 times forecast earnings. The $63 billion acquisition of Botox maker Allergan by AbbVie is starting to pay off: cosmetic and therapeutic Botox sales more than quadrupled year over year in the third quarter.
Disney, founded in 1923, is an emblematic corporate America success story that has earned it a spot as one of the greatest blue-chip stocks to purchase for 2021. Although the stock has virtually been flat this year, the fundamental business at Disney is solid and growing. The abrupt advent of the epidemic damaged parts of its core business, including parks, cruises, and film distribution, which have remained flat. Despite this, Disney is making headway, with its parks, experiences, and products segment earning a profit in the most recent quarter. Importantly, Disney has quickly risen to become a significant participant in the streaming battles, with services like Disney+, ESPN+, and Hulu attracting over 173 million users – not far behind Netflix Inc.’s (NFLX) 209 million.
AT&T is a blue-chip stock because it’s a straightforward, well-established, and fairly predictable company that generates a lot of free cash flow. AT&T has an unmatched competitive advantage over its competitors, having invested hundreds of billions of dollars on the infrastructure required to offer cable, internet, and phone services to millions of subscribers. If you’re seeking financial gains, AT&T isn’t the ideal option, but if you just want a reliable corporation that pays a big dividend, the stock is a good fit. AT&T pays the highest dividend on this list at 7.5 percent.
Procter & Gamble, the oldest film on this list, was formed in 1837 and is a classic consumer defensive stock. Procter & Gamble, which sells basics like toothpaste, razors, laundry and dish detergent, toilet paper, and shampoo, is essentially ageless and recession-proof, even though things change. The company’s well-known brands include Tide, Crest, Gillette, and Pampers, to name a few. Year after year, you can count on consistent single-digit revenue and earnings-per-share growth. PG has raised its dividend distribution for 64 years in a row, making it a dividend aristocrat. The $350 billion corporations currently pay a dividend yield of 2.4 percent. The corporation returned $19.3 billion to shareholders in the previous fiscal year through stock buybacks and dividends.
Lowe’s, which was also named to U.S. News’ overall list of the top stocks to buy for 2021, is coming off a record-breaking 2020, fueled by rising pandemic-driven demand from do-it-yourselfers, a spike in renovation projects, and a soaring real estate market. Despite being used to playing second fiddle to larger rival Home Depot Inc. (HD), Lowe’s appeared to be less expensive to begin the year. Lowe’s earnings statement in August reaffirmed why it is the better choice between the two: The day after Home Depot’s stock dropped 4% due to a poor quarterly report, the LOW stock soared 9.6% as its quarterly results beat analyst estimates. Lowe’s also pays a modest 1.5 percent dividend, which it has lots of ability to increase given its strong earnings.
Last but not least in terms of market capitalization is healthcare insurer Cigna, which, with a market capitalization of around $70 billion, is one of the top healthcare insurers in the United States. Cigna is coming off a poor second-quarter earnings release that resulted in an 11 percent one-day haircut due to higher-than-expected COVID-19 and non-COVID-19 medical expense costs. The news came as a result of changes in behavior among Cigna’s clients: As the pandemic appeared to be waning in the second quarter, people became more comfortable seeking out discretionary medical operations. Despite the uncertainty surrounding Cigna’s short-term prospects, the stock still appears to be a long-term winner, trading at only approximately 10 times forward earnings. Analysts agree, with an average price objective of $275.44 for the stock, representing a roughly 33% increase over its most recent close.
Disclaimer: The above information is based on the research of the Author. Please make your due diligence before investing. Studycafe will not be responsible for any gain/loss incurred to investors.
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