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Blue-chip stocks are well-known companies with strong balance sheets and plenty of staying power.
The following blue-chip stocks are well-positioned in the coming year:
- Apple (AAPL)
- Microsoft (MSFT)
- Berkshire Hathaway (BRK.B)
- Disney (DIS)
- JPMorgan Chase & Co. (JPM)
- Johnson & Johnson (JNJ)
Next, we’ll analyze each of these companies to see why they are attractive blue-chip stocks.
Best Blue-Chip Stocks
#1. Apple (AAPL)
- Trailing 5-Year Performance: +510%
- Market Cap: $2.95T
- Dividend Yield: 0.48%
Apple designs and manufactures smartphones, personal computers, and various other hardware products and sells a host of services built around this suite of products.
The company was founded by Steve Jobs and Steve Wozniak in 1976.
Nearly five decades later, Apple has become the largest publicly-traded company globally, recently eclipsing a market cap of $3 trillion.
Apple’s lasting success can be attributed to its focus on design and quality, in addition to its determination to repeatedly raise the bar.
With each new product launch, Apple adds depth to their ecosystem and continues to create massive, new streams of revenue: from the iPad to AirPods to the Apple Watch and Apple T.V.
Apple appears to be gearing up for the next technology trend: augmented reality and virtual reality.
If the future resembles even a glimmer of the past, Apple will get the hardware right and benefit greatly in Big Tech’s next chapter.
#2. Microsoft (MSFT)
- Trailing 5-Year Performance: +423%
- Market Cap: $2.51T
- Dividend Yield: 0.66%
Microsoft is another blue-chip stock with deep roots in the technology sector. It was founded in 1975 by Bill Gates and Paul Allen.
Today, Microsoft sells a range of software products, services, and devices, such as Microsoft Windows, Microsoft Office, Xbox, and most recently, Azure.
Despite a fast-moving tech landscape and all the “disruptors” vying for market share, Microsoft remains very much relevant in the software world.
It’s estimated that Microsoft Office has over 1.2 billion users worldwide.
However, to justify its valuation moving forward, Microsoft must continue to grow Azure – its cloud computing operation.
Azure currently has around 19% of the worldwide cloud infrastructure market, behind Amazon Web Services at 32%, but ahead of Google Cloud at 7%.
There’s certainly room for all three to remain at the table, but the company that leads the next generation of cloud computing will likely outperform the others.
#3. Berkshire Hathaway (BRK.B)
- Trailing 5-Year Performance: +82%
- Market Cap: $674B
- Dividend Yield: 0.00%
Berkshire Hathaway is a holding company led by famous investors Warren Buffett and Charlie Munger for many decades.
Buffett and Munger exclusively invested in fair-value, blue-chip companies with the intention of holding the stock over the long term.
Given its classification as a holding company, Berkshire Hathaway doesn’t produce anything. It takes capital allocated to it and invests the capital in other companies.
Today, Berkshire Hathaway wholly owns various businesses, such as GEICO and Duracell, and is a minority owner of several public companies like American Express, Coca-Cola, and Apple.
In fact, Apple represents 50% of the entire Berkshire Hathaway portfolio.
Other top holdings include Bank of America (10.8%), The Coca-Cola Company (8.6%), American Express (6.5%), and Kraft Heinz (4.2%).
#4. Disney (DIS)
- Trailing 5-Year Performance: +42%
- Market Cap: $282B
- Dividend Yield: 0.00%
The Walt Disney Company has theme parks, resorts, cruises, movies, T.V. shows, and much more.
It operates attractions worldwide, with its largest parks in Shanghai, Orlando, Paris, California, Tokyo, and Hong Kong.
The backbone of these parks is Disney’s catalog of intellectual property, which consists of creations from the Marvel Cinematic Universe, Pixar, and Lucasfilm, among others.
Disney has just recently learned how to monetize their monopoly on this priceless I.P. in the digital space: Disney+.
Since its launch, Disney+ has gained more than 118 million global paid subscribers.
For reference, Netflix has around 213 million subscribers.
Disney is a contributor and benefactor of the changing landscape in the entertainment industry.
The implications of streaming are playing out in real-time – projects that would have been box office movies are getting turned into ten-episode shows.
The future of the movie theatre industry is in question. And when people do go to the theatre, they’re going for a Marvel premiere.
In fact, 30% of the total U.S. box office was made up of Marvel films in the last year.
Disney is a legacy blue-chip stock with perhaps the widest moat you can find.
#5. Johnson & Johnson (JNJ)
- Trailing 5-Year Performance: +47%
- Market Cap: $450B
- Dividend Yield: 2.47%
Johnson & Johnson is a multinational corporation that develops medical devices, pharmaceuticals, and consumer packaged goods.
It was founded in 1886 and has become the 15th most valuable company globally in terms of market capitalization.
Johnson & Johnson owns around 250 subsidiary companies that do business in over 175 countries worldwide.
Millions of consumers rely on J&J products every day. From Band-Aids, Tylenol, Johnson’s Baby products, Neutrogena, and recently a COVID-19 vaccine.
Additionally, Johnson & Johnson has the highest dividend yield of all the companies on our blue-chip stock list.
#6. JPMorgan Chase & Co. (JPM)
- Trailing 5-Year Performance: +25%
- Market Cap: $487B
- Dividend Yield: 2.32%
JPMorgan Chase & Co. is a financial services firm with trillions of assets and operations worldwide.
These services include investment banking, financial services for consumers and small businesses, commercial banking, financial transactions processing, and asset management.
The banking sector of the economy has faced very little competition over the last 350 years.
This favorable competitive landscape has allowed JPMorgan Chase & Co. to become the 12th most valuable public company in terms of market capitalization.
It is truly one of the most powerful companies in the world.
Like Johnson & Johnson, JPMorgan Chase & Co. offers an attractive dividend yield for investors seeking passive income.
Other Blue-Chip Stocks to Consider
Our list of blue-chip stocks is obviously not exhaustive – here are some other blue-chip stocks to consider:
- Alphabet (GOOG, GOOGL)
- Amazon.com (AMZN)
- Home Depot (H.D.)
- Boeing (B.A.)
- Starbucks (SBUX)
- Bank of America (BAC)
- Walmart (WMT)
- Lockheed Martin (LMT)
- Procter & Gamble (P.G.)
- The Coca-Cola Company (K.O.)
- Morgan Stanley (M.S.)
- Raytheon Technologies (RTX)
These stocks generally fall into one of the following categories: Big Tech, banks, industrial defense companies, or well-established consumer product & service companies.
Best Blue Chip Stocks FAQs
What are the 10 best stocks for 2022?
Here are the 10 best stocks for 2022:
- Nvidia (NVDA)
- Advanced Micro Devices (AMD)
- Alphabet (GOOG, GOOGL)
- Amazon.com (AMZN)
- Apple (AAPL)
- Berkshire Hathaway (BRKB)
- Block (S.Q.)
- Ford (F)
- Goldman Sachs (G.S.)
- CrowdStrike (CRWD)
What are the highest yielding blue-chip stocks?
Here are the highest yielding blue-chip stocks on the market:
- Chevron (CVX) 4.0%
- Royal Dutch Shell (RDS.A) 6.0%
- AbbVie (ABBV) 5.4%
- Exxon Mobil (XOM) 4.2%
- B.P. (B.P.) 5.8%
Are blue-chip stocks good for growth?
Several blue-chip stocks have favorable growth projections. They tend to be Big Tech stocks, such as Apple (AAPL), Alphabet (GOOG), Amazon.com (AMZN), and Microsoft (MSFT).
Bottom Line: Best Blue-Chip Stocks
The best blue-chip stock has the optimal mix of earnings power, staying power, and growth potential.
We believe that the legacy Big Tech names best satisfy those criteria in the immediate future.
This article is for informational purposes only. It is not intended to be investment advice. To learn more about how we chose the Best Blue-Chip Stocks, check out our editorial principles and public equities research methodology.