While technology stocks continue to drive the market higher, they are not the only game in town. Investors needn’t invest only in semiconductor stocks to achieve big gains. Many blue-chip stocks are rallying right now following the release of their financial results for the fourth and final quarter of 2023.
The names of a lot of these worthwhile stocks will be familiar to investors. And for good reason. They tend to be dominant companies and brands that provide goods and services many of us find essential in our lives. Profitable, flush with cash and with a strong growth trajectory, these blue-chip stocks make for solid long-term investments. They can easily form the foundation of any portfolio, and investors can expect consistent returns from them. Here are the seven best blue-chip stocks to invest in for big gains in 2024.
Visa (V)
The stock of Visa (NYSE:V) is trending upwards after the credit card giant issued fourth quarter 2023 financial results that beat Wall Street forecasts. The company, which operates the world’s biggest payments network, reported Q4 earnings per share (EPS) of $2.41, topping analyst estimates of $2.34. Revenue amounted to $8.60 billion, up more than 9% from a year earlier and ahead of forecasts that called for $8.50 billion in sales.
In terms of forward guidance, Visa said that it expects revenue growth in the current first quarter of 2024 in the upper-mid to high-single digits and profit growth in the high-teens. The payments company continues to benefit from strong consumer spending and retail sales. Its payment volumes, which cover the holiday shopping season, rose 8% in Q4 2023, while cross-border volumes increased 16%. The company’s total transactions for Q4 2023 rose 9% to $57.50 billion.
V stock is up 7% so far in 2024 and has gained 21% in the last 12 months.
Microsoft (MSFT)
The stock of Microsoft (NASDAQ:MSFT) is on a tear currently and has achieved an important milestone. For the first time ever, Microsoft’s market capitalization has surpassed $3 trillion, making it the world’s most valuable publicly traded company and becoming only the second concern in history to achieve a $3 trillion market cap, besting rival Apple (NASDAQ:AAPL) in the process. On Jan. 25, MSFT stock finished trading with a market valuation of $3.009 trillion, slightly ahead of Apple at $3.002 trillion.
The $3 trillion milestone comes four years after Microsoft first reached a $1 trillion market cap, back in April 2019. Microsoft has been a publicly traded company since 1986. The company’s market value reached $2 trillion in June 2021, and has now topped $3 trillion. The new milestone was reached as MSFT stock has gained 11% so far in 2024, bringing its 12-month increase to 69%. The company’s stock continues to rally higher on investor enthusiasm for artificial intelligence (AI).
American Airlines (AAL)
After four bruising years, airline stocks look to be making a comeback, led by American Airlines (NASDAQ:AAL). The stock of the world’s largest airline is up 9% year to date, driven higher after the carrier announced better-than-expected Q4 2023 financial results and offered a bullish outlook for the year ahead. American Airlines posted Q4 EPS of 29 cents on revenue of $13.10 billion. Wall Street had expected a profit of 11 cents on sales of $13 billion.
While the Q4 numbers were impressive, so too was the guidance issued by American Airlines. The company said that it expects to report earnings of $2.25 to $3.25 a share for all of 2024. Analysts who were polled by FactSet expected full-year earnings of $2.14 a share. The airline said that it continues to benefit from strength in air travel coming out of the pandemic, including record bookings over the recent year-end holidays.
Procter & Gamble (PG)
The share price of Procter & Gamble (NYSE:PG) is up 5% early in the year as the consumer-goods company continues to demonstrate that it has pricing power and consumer loyalty on its side. Procter & Gamble, whose products include Tide laundry detergent and Gillette razor blades, reported Q4 2023 EPS of $1.84 versus $1.70 that had been forecast among analysts. Revenue totaled $21.44 billion versus $21.48 billion that had been expected. The company’s sales increased 3% from a year earlier.
In terms of guidance, Procter & Gamble said it anticipates fiscal 2024 earnings growth of 1%, down from a previous forecast of 6%. However, the company’s guidance tends to be conservative. Plus, Procter and Gamble expects its results to be impacted by a $1.3 billion charge related to a drop in the book value of its Gillette razor blade business as volume growth slows due to hybrid work trends. Still, PG stock is up 11% in the past year, making it a a good blue-chip stock to invest in.
IBM (IBM)
Shares of IBM (NYSE:IBM) are red hot to start the year. The technology company’s stock has gained 16% in the month of January, bringing its 12 month increase to nearly 40%. The catalyst for the move higher was a strong Q4 financial print that exceeded Wall Street’s expectations. IBM reported EPS of $3.87 versus $3.78 that was the consensus expectation of analysts. Revenue for the October through December quarter totaled $17.38 billion compared to $17.30 billion that had been forecast on Wall Street.
A deeper dive into the numbers, and IBM’s results look even better. Free cash flow for all of 2023 totaled $11.20 billion, more than the $10.50 billion that management had guided for. And the company’s Q4 gross margin of 59.1% was the highest since 1999. Perhaps best of all, the company said that its business related to generative AI was double the size it was in Q3 of last year. Looking ahead, IBM said that it expects $12 billion in free cash flow and revenue growth in the mid-single digits for 2024.
Charles Schwab (SCHW)
Bank stocks continue to struggle. However, a growing number of analysts are lending their support. Recently, analysts at Oppenheimer (NYSE:OPY) issued a note to clients arguing that stocks of banks and other financial services firms are “significantly undervalued,” ready to rebound, and that it’s time to buy. Among the stocks of financial institutions, Charles Schwab (NYSE:SCHW) looks particularly cheap with its share price down 15% in the last year and currently trading at 25 times future earnings estimates.
In January, Charles Schwab reported Q4 earnings that bested Wall Street forecasts even though its revenue and profits declined from a year earlier. The financial services firm announced Q4 EPS of 68 cents, which was ahead of consensus estimates that called for 64 cents. Revenue in the final quarter of 2023 totaled $4.45 billion, matching forecasts. Charles Schwab has struggled as high interest rates prompt customers to move money out of low-yielding accounts and into better paying money-market funds.
However, with inflation declining and interest rates on the cusp of being lowered, the year ahead should be kinder to SCHW stock.
Johnson & Johnson (JNJ)
Pharmaceutical companies have had a difficult time over the past year. Johnson & Johnson (NYSE:JNJ), for one, has endured a rough road, particularly as it hived off its consumer health unit into a new company called Kenvue (NYSE:KVUE), the biggest change in the company’s 138-year history. In the last 12 months, JNJ stock has slumped 2%. In 2024, the shares are essentially flat. However, there are indications that better days are ahead for this stalwart blue-chip stock.
Recently, Johnson & Johnson issued better-than-expected Q4 earnings due largely to strong sales in its medical device business unit. The company announced EPS of $2.29 versus $2.28 that had been forecast on Wall Street. Revenue totaled $21.40 billion versus $21.01 billion that had been expected among analysts. Johnson & Johnson said the strong results were due largely to a 13.3% year-over-year increase in sales of its medical devices, which generated revenue of $7.67 billion in Q4. The company also continues to take steps to resolve accusations that its baby powder caused cancer in some people.
On the date of publication, Joel Baglole held long positions in MSFT and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
