Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Blue-Chip Stock

What it is:

A blue-chip stock is a stock of an established company that has consistently shown qualities like generating consistent earnings, paying generous dividends or increasing revenue.

How it works (Example):

Blue-chip stocks are shares of stock issued by companies which have a reputation for financial stability and a record of successfully weathering any economic condition. In addition to exceptional potential for long-term growth, blue-chip stocks traditionally display repetitive, solid earnings.

Examples of blue-chip stocks are General Electric (NYSE: GE) or AT&T (NYSE: T).

The name blue-chip stock is a reference to the most highly-valued chip in a poker game.

Why it Matters:

As a result of their high level of financial strength and market reputation, blue-chip stocks traditionally carry substantially less risk than other stocks. They are generally regarded as safe, sound investments.

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