It is a great time to look for blue-chip stocks to buy. Buying and holding reliable companies can result in steady returns without stress. You don’t have to actively monitor price fluctuations or swing trade to generate massive profits in the stock market. Time in the market instead of timing the market can work wonders, but you have to pick the right stocks.
Some blue-chip stocks offer a good mix of stability and growth. It’s possible to outperform the stock market by comparing blue-chip stocks and strategically constructing your portfolio, but what should you look for? While each investor has different philosophies, it’s good to look for companies that can deliver rising revenue and profit margins. Corporations with vast competitive moats are also less likely to lose market share or get replaced entirely.
You don’t have to find moonshot stocks to accumulate solid gains. Here are the blue-chip stocks to buy that can continue to gain momentum and reward patient investors.
Blue-Chip Stocks to Buy: Meta Platforms (META)
Meta Platforms (NASDAQ:META) has become a compelling leader in the advertising industry after a commitment to efficiency. Net income more than doubled year-over-year in Q1 2024 while revenue jumped by 27% year-over-year. Investors have accumulated positions in the social media giant due to the solid financials. Shares are up by 46% year-to-date and have gained 164% over the past five years. Thus, I think it is one of the best blue-chip stocks to buy.
The company’s continued user base growth should spark additional revenue growth. Daily active users across Meta Platforms’ social networks reached 3.24 billion, up 7% year-over-year. A few months ago, the company generated many headlines for offering its first dividend. Meta Platforms distributed $1.27 billion to investors via dividends and repurchased $14.64 billion of shares.
Meta Platforms’ growth comes amid significant cost-cutting measures. The company’s headcount is down by 10% year-over-year, and more cuts can come. Meta Platforms recently announced that it will trim the number of VP positions.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) has been on a tear. Shares are up by 60% year-to-date and have soared by 533% over the past five years. The chipmaker has been a semiconductor leader for many years, and recent AI chips have accelerated revenue.
Broadcom reported $12.5 billion in Q2 2024 revenue, a 43% improvement from the same quarter last year. Revenue from AI products reached a record $3.1 billion in the quarter, while Infrastructure revenue also accelerated due to VMware. Revenue was up by 12% year-over-year, excluding VMware.Â
The chipmaker recently attracted more investors with its 10-for-1 stock split. Broadcom is following in Nvidia’s (NASDAQ:NVDA) footsteps with the split that has generated more interest for the stock. Broadcom currently has a market cap above $800 billion, and it’s realistic for the company to surpass the $1 trillion milestone this year or the next. While investors wait for that milestone, they enjoy a 1.21% yield and an impressive dividend growth rate.
Blue-Chip Stocks to Buy: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) has branched out into many industries and might as well be a fund at this point. The company is leading high-growth verticals like cloud computing, artificial intelligence, business software, social media, advertising, gaming, and others.Â
It has a chorus of supporters on Wall Street. Analysts have rated the stock as a Strong Buy with an average price target that suggests a 13% upside. The highest price target of $600 per share implies that shares can march 35% higher from current levels.
Microsoft has been delivering solid quarters for years, and Q3 FY24 was no different. Revenue increased by 17% year-over-year, while net income increased by 20% year-over-year. Microsoft Copilot allows the firm to strengthen its product line across multiple industries, which should lead to additional revenue. Copilot for Security is an example of this trend, and it positions Microsoft to gain more market share in the cybersecurity industry.Â
Visa (V)
Not every blue-chip stock is a flashy tech company. Many of these stocks are hidden in plain sight. Whenever you use a credit or debit card to buy goods or services, the company creating those cards receives a small percentage of the transaction.
Visa (NYSE:V) is a leading credit and debit card issuer that regularly generates net profit margins above 50%. The fintech stock is up 5% year-to-date and has gained 56% over the past five years. It trades at a 33 P/E ratio and offers a 0.77% yield. While the yield is low, Visa has maintained a double-digit dividend growth rate for over a decade.
Wall Street analysts liked the stock and gave it a consensus Strong Buy rating. The average price target implies a 17% gain from current levels. As consumers remained resilient, Visa delivered 10% year-over-year revenue and net income growth in Q2 FY24. These growth rates give Visa plenty of capital for stock buybacks and dividend distributions.
Blue-Chip Stocks to Buy: Chipotle (CMG)
People need to eat, but not everyone has the time or patience to make meals from home. Fast-food restaurants have capitalized on this trend, but the industry is shifting. More consumers are becoming health-conscious, which has put some of the most established fast-food restaurant chains at risk of declining growth.
Luckily, those problems don’t affect Chipotle (NYSE:CMG), a top restaurant chain known for healthier food options than most competitors. Chipotle has repeatedly raised prices while retaining customers and delivering higher profit margins.
The Mexican Grill chain reported 14.1% year-over-year growth, with net sales at $2.7 billion. Some of that growth is due to Chipotle’s new restaurant openings, but comparable restaurant sales were up by 7.0% year-over-year. Chipotle remains on target to open 285-315 new restaurants in 2024, increasing the likelihood of double-digit revenue growth rates. Net income was up by 23.2% year-over-year. As such, I think it is one of the best blue-chip stocks to buy.
CommVault Systems (CVLT)
CommVault Systems (NASDAQ:CVLT) is a cloud security firm with a 31 P/E ratio and a $5 billion market cap. The Russell 2000 member is relatively hidden compared to other cybersecurity companies, but it has the potential to outperform many of them.
CommVault Systems has outperformed the stock market in recent years. Shares are up by 51% year-to-date and have gained 139% over the past five years. CommVault Systems should continue to generate additional gains as its annual recurring revenue (ARR) picks up. The firm currently has $770 million in total ARR, up by 16% year-over-year. Subscription ARR reached $597 million and is up by 25% year-over-year. Success with annual recurring revenue should translate into accelerating growth rates for revenue and net income.
Investors saw both of those outcomes in the fourth quarter of fiscal 2024. Full-year revenue increased by 7% year-over-year while Q4 FY24 revenue was up by 10% year-over-year. Net income came to $23.1 million if we exclude an income tax windfall. If we exclude tax benefits, that’s compared to $83.6 million in full-year revenue. 27.6% of the company’s total profits came in the last quarter. It represents accelerated growth which can translate into meaningful long-term gains.
Cintas (CTAS)
Cintas (NASDAQ:CTAS) provides business safety equipment and supplies for more than one million North American businesses. The company regularly reports double-digit net profit margins and has been crushing the stock market. Shares are up by 18% year-to-date and have roughly tripled over the past five years.Â
Cintas currently trades at a 48 P/E ratio and offers a 0.79% yield. The firm has maintained a double-digit annualized dividend growth rate for several years and has regularly returned capital to its investors. Cintas’ Q3 FY24 earnings results suggest it should have no issue providing shareholders with additional capital and long-term growth. Revenue increased by 9.9% year-over-year to reach $2.41 billion. Net income totaled $397.6 million, a 22.0% improvement compared to last year’s quarter.
Wall Street analysts have mostly rated Cintas as a Moderate Buy, with a projected 4% upside from current levels. The highest price target of $790 per share indicates that Cintas can gain an additional 13.5%.
On this date of publication, Marc Guberti held long positions in AVGO, MSFT, and CVLT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
