While it’s usually the smaller enterprises that offer screaming buy opportunities for discerning speculators, sometimes even the best blue-chip stocks to buy don’t get the attention they deserve. With thousands upon thousands of publicly traded securities available, it’s inevitable that some ideas will slip through the cracks.
To be fair, blue-chip stock picks probably won’t generate anywhere near the kind of upside returns you’ll see from the smaller capitalization plays. That said, the established enterprises will likely be much more stable than their diminutive counterparts. And occasionally, the stalwarts can pull off a few surprises. With that, below are intriguing ideas for top blue-chip stocks to buy right now.
General Motors (GM)
When you look for discussions about electric vehicles, you’re going to see a list of the usual suspects. However, one of the best blue-chip stocks to buy that consistently doesn’t get the attention that it deserves is General Motors (NYSE:GM). Sure, folks know about the opportunity. However, since the beginning of this year, GM stock gained just over 16%.
That’s not much compared to some of the stratospheric returns in the EV space. Granted, General Motors doesn’t represent a pure-play EV manufacturer, I get that. Where my contention lies, however, is the hidden opportunity. Obviously, GM commands several iconic brands and it can electrify those, so to speak.
And yes, the company offers the mid-engine (combustion-powered) Corvette, which is awesome. However, in the future, imagine an electric Corvette. That would open up a whole new market. For now, GM trades at a lowly forward multiple of only 5.81. I think that’s ridiculous given the brand upside. It’s one of the blue-chip stock picks.
Stellantis (STLA)
Now I don’t want to bombard this list of top blue-chip stocks to buy with a series of EV-related enterprises. However, Stellantis (NYSE:STLA) represents a screaming buy in my view. If you thought General Motors was cheap, STLA trades at a forward multiple of only 3.71. Its trailing price-earnings ratio sits at 3.31x. Frankly, I think it’s ridiculous.
Sure, Stellantis – which owns brands like Jeep and Alfa Romeo – symbolizes the rich history of combustion-powered vehicles. But much like General Motors, Stellantis is adapting to new realities. Take for instance the Dodge brand. For fans of classic cars, Dodge is practically synonymous with the muscle car era, the glory days of Detroit.
Unfortunately, those days of small-block V8 engines rumbling down the highway are long gone. However, Dodge earlier announced its electric Charger, an eco-friendly muscle car for the 21st century. Now, the purists probably won’t go for it. However, Dodge in my opinion made the right move by appealing to a whole new fan base. Again, it’s one of the blue-chip stock picks to consider.
Sanofi (SNY)
With so much attention in the broader healthcare space dedicated to the Covid-19 vaccine at one point, it was easy for other pharmaceutical enterprises that weren’t necessarily all-in on the SARS-CoV-2 virus to get lost in the crowd. That was basically the case with French multinational Sanofi (NASDAQ:SNY). For the last three-and-a-half years, SNY has been frustratingly horizontal. And when it’s not consolidating, it’s volatile.
According to its public profile, Sanofi covers seven major therapeutic areas: cardiovascular, central nervous system, diabetes, internal medicine, oncology, thrombosis, and vaccines. Cynically, each of these sectors enjoys for lack of a better word massive addressable markets. For example, just the global cardiovascular drug market only may hit $63.96 billion by 2026.
Recently, SNY has been moving steadily higher, suggesting investors should take a closer look. Right now, the market prices SNY at a forward multiple of 11.7. As a discount to projected earnings, Sanofi ranks better than 69.29% of the competition. Thus, it’s worth consideration for blue-chip stocks.
Lam Research (LRCX)
A supplier of wafer-fabrication equipment and related services to the semiconductor industry, Lam Research (NASDAQ:LRCX) represents one of the most important blue-chip stocks. If you watch auto racing, Lam essentially plays the role of a racing team’s pit crew. Yes, the driver gets the glory but the car ain’t going anywhere without a strong team.
Recently, LRCX experienced considerable volatility. More than likely, the red ink centers on Taiwan Semiconductor (NYSE:TSM) disclosing a revenue guidance downgrade. Further, the implications of fading demand for smartphones and PCs – basically the bread and butter of the chip-manufacturing space – bodes poorly for the industry. If so, this framework translates to less business for Lam Research.
Nevertheless, the relevance of Lam’s specialty makes LRCX one of the best blue-chip stocks to buy for the long haul. On the positive side, the fallout makes the underlying investment relatively cheap. Right now, the market prices LRCX at trailing earnings multiple of 17.14. That’s lower than 62.11% of the competition.
Shell (SHEL)
With the final three ideas for blue-chip stocks, I’m going to dive into controversial ideas. First up, we have Shell (NYSE:SHEL). As a global hydrocarbon giant, Shell is controversial but also in a quizzical way. Essentially, with the world seemingly pivoting to the electrification of mobility – which implies renewable energy infrastructure – Shell seems anachronistic.
Unfortunately for go-green hardliners, hydrocarbons may be with us for a long time to come. You can look at the scientific factor, which is that fossil fuels command high energy density. From an economic perspective, you can look at the charts for offshore oil drillers. If hydrocarbons are about to face cancellation, Wall Street has a strange way of showing it.
From a cynical perspective, it’s fortuitous that many still don’t want to face reality. And that leads to SHEL trading at a trailing multiple of only 4.8. In contrast, the sector median stands at a loftier 8.28X. Translation: SHEL ranks better than 67.6% of companies in the oil and gas industry, per data aggregator Gurufocus. Thus, it’s one of the top blue-chip stocks.
Anheuser-Busch (BUD)
Just by mentioning Anheuser-Busch (NYSE:BUD), the collective blood pressure for approximately half the country just went up a few notches. And for some folks – like Kid Rock – it may reflect serious medical concerns due to the ensuing rage. Now, I’m about to clock out for the weekend so I’m not going to say anything. You know the controversy. Everybody knows the controversy.
But then, is it really that big of a deal? Some companies make poor marketing decisions. Others introduced defective products into the consumer ecosystem that caused individual and in the worst cases societal harm. People get outraged at first but then life goes on. Frankly, anger represents a difficult emotion to sustain because it’s so taxing on the human body.
However, the anger toward BUD created an opportunity. Right now, BUD trades at a trailing multiple of 15.75, lower than nearly 70% of its peers. Also, it trades at 14.81x free cash flow. In contrast, the sector median stat is 22.74X. Thus, it’s one of the blue-chip stock picks. Just don’t tell anybody.
British American Tobacco (BTI)
While Anheuser Busch seemingly symbolizes the most hated company in America, British American Tobacco (NYSE:BTI) is in my opinion the most controversial idea on this list of blue-chip stocks. While smoking commanded a certain allure several decades ago, an abundance of scientific research pointed to the practice’s health risks. Subsequently, government and social campaigns urged smokers to quit and children to not even start.
There’s no doubt that the efforts have generated success not just in our country but across the globe. Multiple resources point to smoking prevalence declining for both men and women. So, it begs the question, why bother considering British American Tobacco?
For one thing, the prevalence may be fading but the practice still occurs. Second, data shows the rising popularity of e-cigarettes or vaporizers. With big tobacco firms offering their own digital alternatives, BTI is surprisingly relevant.
Plus, it’s cheap. Currently, BTI trades at forward earnings multiple of 6.92. This stat ranks lower than 76.92% of companies in the tobacco products industry. Thus, it’s one of the blue-chip stocks to buy.
— Josh Enomoto
320 hedge funds just sold this stock [sponsor]A strange force has seized control of Wall Street. Hedge funds are already moving their money… and preparing for even stranger days ahead. Over 320 hedge funds have quietly sold THIS famous stock - to prepare for a dramatic market shift. Get the strange truth from a 50-year Wall Street insider... including the name and ticker of the stock hedge funds are selling hand-over-first.
Source: Investor Place