10 Best Blue Chip Stocks Of January 2024 (2024)

With a market cap of about $3.029 trillion, Apple is the largest public company in the world. Climbing to this valuation has brought investors lucrative gains. The company has the best annualized return over the past decade of any stock on this list.

However, this is not exactly cheap—AAPL’s forward P/E ratio is the highest on our list. But it’s well off its most recent highs, as this key ratio rose above 40 during the pandemic.

Apple’s current valuation is due to the fact that the stock has gained nearly 50% year-to-date. It’s now trading close to its most recent all-time high.

Banking giant JP Morgan has offered investors the highest shareholder yield of any company on this list. The share price has also performed strongly, despite a 40% decline in the final quarter of 2022. This drop was among the steepest of the stocks included on this list.

JPM’s forward P/E ratio is the second lowest on our list. It’s also below the five-year average, suggesting the stock is priced to buy right now.

Walmart is the biggest bricks-and-mortar retail company in the U.S., claiming around a quarter of the total market.

Investors may balk at this stock’s P/E ratio, especially given the size of the premium compared to rivals such as Target. However, this ratio was as high as 43.7 in October 2022, and above 50 the prior year, meaning the current mark could historically be considered low.

The stock’s biggest strength may also lie in its stability. While its average annual return over the past decade has lagged the S&P 500’s annualized return, WMT’s return profile has been steady. Despite unfavorable macro conditions, the stock fell less than 2% in 2022, compared to the S&P 500, which dropped almost 20%.

Johnson & Johnson is one of the largest healthcare stocks in the world, developing medical devices, pharmaceuticals and consumer packaged goods.

JNJ has performed well over the past decade. But it’s the company’s dividend that really stands out. In October, it announced its 63rd consecutive increase to the quarterly dividend.

The stock’s pullbacks have been very manageable. The 21% decline at the start of the Covid-19 pandemic—one of its steepest declines from the past decade—was the smallest of the companies included on our list.

Johnson & Johnson’s forward P/E gives it about the cheapest current valuation of our picks for the best blue chip stocks.

Multinational consumer goods producer Procter & Gamble specializes in personal care and hygiene products.

In the company’s April 2023 Q1 results, PG revealed that, although it has seen rising input costs, it nonetheless boosted profit margins for the first time in more than two years. The company raised prices by close to 10%, which helped generate a 4.1% increase to net sales—all despite sales volume falling 3%.

This pricing power has led to strong cash flow, with shareholders benefitting through consistent dividends.

This has all combined to give PG a defensive return profile. A five-year beta of 0.39 sums up the company’s steady attributes. The stock is currently trading close to its all-time high, despite seeing only a small rise year-to-date.

Pharmaceutical company AbbVie Inc is a blue chip stock, although shares of the maker of the rheumatoid arthritis drug Humira have performed poorly in 2023.

On the flipside, ABBV gained 19% in 2022, vastly outpacing the rest of the market, with the S&P 500 down more than 19%.

ABBV’s dividends are where the company shines as a blue chip stock. The five-year average dividend yield is 4.4%, and the company has hiked dividends for over 50 consecutive years.

Its P/E ratio doubled from July 2022 to April 2023, and at that time was the highest on our list. However, when you consider future earnings, things look a little more optimistic. ABBV’s forward P/E ratio is the third-lowest of the stocks included here.

Coca-Cola is the quintessential blue chip stock, a drinks company that has demonstrated decades of consistent dividends and stable performance.

However, KO’s average return over the past decade is the worst on this list. Looking forward, the company is trading at a P/E ratio that is toward the top of its five-year range, meaning it does not stand out from a valuation perspective.

Despite these factors, Coca-Cola’s low beta combined with its dividend yield means it fits the bill of what many investors see in blue chip stocks: lower risk and steady returns.

The stock demonstrated this in 2022, rising about 10% while fell 18%.

Sports giant Nike has shown tremendous growth for many years, fighting its way to the top of the market since going public in 1980.

Over the past 10 years, NKE’s average annual return has been the fourth-highest on this list and better than the S&P 500 benchmark.

In the last two years, however, the stock has lagged. It currently trades significantly lower than its all-time high from November 2021.

This has made it cheaper, though. NKE’s P/E ratio is comfortably below its five-year average of 46.7, and increased earnings forecasts mean the forward P/E ratio is lower again.

Conglomerate Honeywell International is exposed to many different sectors and tends to closely track the performance of the wider market. The company is formally designated as an industrial stock.

HON has averaged a solid annual return compared to the S&P 500 over the past decade. Adding to its appeal for dividend investors is its current yield, which is well above the benchmark index’s yield.

The stock currently trades at its lowest P/E ratio since 2019, while its forward P/E ratio is even cheaper.

The second-largest investment bank in the world by revenue, Goldman Sachs stock fell 8% in 2022 as the Federal Reserve tightened monetary policy amid rampant inflation.

Going back to 2021, GS’s peak-to-trough decline of 33% is among the largest declines of companies included on this list. Despite this, over a long-term horizon, Goldman Sachs has performed strongly, generating a strong average return over the past decade.

Its total shareholder yield is also the second-highest on this list, buoyed by a strong dividend yield.

From a valuation perspective, GS’s forward P/E ratio is currently toward the top of its range. Its P/E average over the last 5 years comes in at 10.3.