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Blue chip stocks

Blue chip stocks are generally less volatile than other stocks, but this doesn’t mean that they are a 100% safe investment. Even a blue chip stock can lose value and blue chip companies can face bankruptcy just like any other company. However, seen from a historical perspective, the stocks assigned the label “blue chip” by investors have – on average – been very good at weathering out harsh economic times and making nice profits when times are good. So, when an investor wants to make a stock portfolio more stable, blue chip stocks are normally the go-to choice.

blue chip

There is no legal definition of blue chip stock, so different investors can have different opinions regarding certain stocks – do they qualify as blue chip or not? However, most investors agree that only a well-established and well-recognized stock company with a sound financial situation can be a blue chip stock company. Offering well-recognized and highly regarded products will also increase a company’s chance of being seen as a blue chip company. Last but not least, the stock price of a blue chip company will typically follow the S&P 500 stock market index.

The term blue chip is borrowed from poker, where the blue chip has traditionally been the most valuable one. According to Dow Jones folklore, Oliver Gingold was watching the stock ticker with Lucien Hooper at a brokerage firm one day back in early 1920. After noticing that several companies had shares selling for $200 or more, Gingolg told Hooper that he intended to go back to the office and write about “these blue-chip stock”. He nickname caught on, but for a long time the term blue chip stock simply referred to high prices stocks. Today, simply being high priced isn’t enough to be considered a blue chip stock.

Dow Jones Industrial Average

If you want to find blue chip stocks, the Dow Jones Industrial Average index is a good place to start. This index follows a select group of companies that aren’t just widely regarded as blue chip companies but also hailed as giants in their respective fields. Below, you will find a table with the 30 companies currently included in the Dow Jones Industrial Average. As you can see, many of them have been included for decades.

blue chips stock

The industrial part of the Dow Jones Industrial Average index is there for historical reasons. Several of the companies included nowadays do not belong to any heavy industry niche.

Company Symbol Exchange Date added Industry
General Electric GE NYSE 1907-11-07 Conglomerate
ExxonMobil XOM NYSE 1928-10-01

(as Standard Oil of New Jersey)

Oil & gas
Procter & Gamble PG NYSE 1932-05-26 Consumer goods
DuPont DD NYSE 1935-11-20

(also 1924-01-22 to 1925-08-31)

Chemical industry
United Technologies UTX NYSE 1939-03-14

(as United Aircraft)

Conglomerate
3M MMM NYSE 1976-08-09

(as Minnesota Mining

and Manufacturing)

Conglomerate
IBM IBM NYSE 1979-06-29

(also 1932-05-26

to 1939-03-04)

Computers and technology
Merck MRK NYSE 1979-06-29 Pharmaceuticals
American Express AXP NYSE 1982-08-30 Consumer finance
McDonald’s MCD NYSE 1985-10-30 Fast food
Boeing BA NYSE 1987-03-12 Aerospace and defense
Coca-Cola KO NYSE 1987-03-12

(also 1932-05-26

to 1935-11-20)

Beverages
Caterpillar CAT NYSE 1991-05-06 Construction and mining equipment
JPMorgan Chase JPM NYSE 1991-05-06 Banking
Walt Disney DIS NYSE 1991-05-06 Broadcasting and entertainment
Johnson & Johnson JNJ NYSE 1997-03-17 Pharmaceuticals
Wal-Mart WMT NYSE 1997-03-17 Retail
The Home Depot HD NYSE 1999-11-01 Home improvement retailer
Intel INTC NASDAQ 1999-11-01 Semiconductors
Microsoft MSFT NASDAQ 1999-11-01 Software
Pfizer PFE NYSE 2004-04-08 Pharmaceuticals
Verizon VZ NYSE 2004-04-08 Telecommunication
Chevron CVX NYSE 2008-02-19

(also 1930-07-18

to 1999-11-01)

Oil & gas
Cisco Systems CSCO NASDAQ 2009-06-08 Computer networking
Travelers TRV NYSE 2009-06-08 Insurance
UnitedHealth Group UNH NYSE 2012-09-24 Managed health care
Goldman Sachs GS NYSE 2013-09-20 Banking, Financial services
Nike NKE NYSE 2013-09-20 Apparel
Visa V NYSE 2013-09-20 Consumer banking
Apple AAPL NASDAQ 2015-03-18 Consumer electronics

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