The word “blue chip” derives from the game of poker, where the Blue-Chip holds the highest money value. The Blue-chip stocks considered to be a supreme long-term investment vehicle and a high-value stock. Traditionally, the Blue Chip Stocks Investments generates growth in long-term portfolios. There are several characteristics of Blue chip stocks that benefit investors in the long-run. These Companies has a trend of continuous payment of dividend with other strong investment qualities.
Blue Chip Stocks Investments
Blue chips have strong cash flows and balance sheet, consistent growth with strong business models. Most investors/traders recognize the blue-chip stocks as a secure mode of investments. The investors can seek for their investment to grow gradually over time in the Blue-Chip Stocks and to receive dividend.
The investors who invested in blue chip stocks know well that the Blue Chip Stocks Investments have stable earnings. Blue chip stocks gives sense of security to their investors. They have intelligent management teams and capability to generate consistent profits. If the stock market is undergoing through a tough phase (experiencing a bear market). The investors need not to worry about their investments made in blue-chips stocks because, usually, they recover. For an instance, JPMorgan Chase recovered from the 2007-2008 financial crisis
The Blue Chip companies have the consistent debt-to-equity ratio, stable annual revenue over a long period, good average return on equity and a good PE ratio.
As per the stock market capitalization, Bharti Airtel, State Bank of India (SBI), Tata Consultancy Services (TCS), Reliance Industries, Coal India, ONGC, HDFC Bank, ITC, GAIL, Sun Pharma, ICICI Bank and Infosys are India’s leading Blue-Chip Companies. Most of these companies or Blue chip stocks are included in BSE Sensex and S&P CNX Nifty, BSE sensex contains 30 Blue Chip stock and Nifty Contains 50 Blue chip companies.