What Is a Blue Chip?

A blue-chip firm is one that is well-known, well-established, and financially sound. Blue chips are companies that sell high-quality, well-known goods and services. Blue-chip businesses are recognized for weathering economic downturns and operating successfully in the face of adversity, which contributes to their long track record of consistent and steady growth.
The Dow Jones Industrial Average, the Standard & Poor’s (S&P) 500, and the Nasdaq-100 in the United States, the TSX-60 in Canada, and the FTSE Index in the United Kingdom are all examples of blue-chip stocks. It’s debatable how big a firm has to be to qualify for blue-chip status. A market capitalization of $5 billion is a widely acknowledged benchmark, however, market or sector leaders can be businesses of any size.
A blue-chip company is a large multinational corporation that has been in business for a long time. Consider businesses like Coca-Cola, Disney, PepsiCo, Walmart, General Electric, IBM, and McDonald’s, all of which are industry leaders. Blue-chip firms have developed a recognized reputation through time, and the fact that they have weathered several economic downturns makes them stable.

Blue Chip stocks refer to those Blue Chip companies which are the market leader in their sector also these types of companies are the top 100 companies in the country.

These are financially & fundamentally strong companies & they are the market leader in their segment, Market cap of Blue Chip is more than 20 thousand crores.

Features of the Blue Chip Stocks!

  • Market Cap: The market capitalisation of Blue Chip Stocks is more than 20 thousand crores

  • Sector & Industry Leader: They are the market leader in their sectors & industries, for example, TCS is a market leader in the IT sector, HUL market leader in FMCG Sector, etc

  • Slow Growth Rate: Blue Chip companies have already reached their maximum growth phase, due to which they are unable to give maximum returns to their investors

  • High Stock Price: Generally price of these stocks are higher than the other stocks because these are well-established companies and perform better even in the worst situation

  • Regular Dividend: They pay regular dividends to their investors quarterly