Blue-chip companies are companies that have a substantial market share in their industry. Unlike most growth stocks, blue-chips have stable revenue and are often more profitable. These stocks will likely do well as the Federal Reserve starts a rate hike cycle. Here are the top blue-chip stocks to invest in.
Salesforce (NYSE: CRM) is one of the biggest Software-as-a-Service (SAAS) companies in the world. The Dow Jones component has a market capitalization of more than $249 billion.
Recently, however, the Salesforce stock price has struggled as investors worry about growth. It has crashed by almost 20% from its highest level in 2021.
The sell-off accelerated after the company published the latest quarterly results. The results showed that the firm’s revenue jumped by 26.65% to $6.86 billion. Its earnings-per-share rose to $1.27, which was a 35 cents beat.
There are several reasons why the Salesforce stock price is a good buy. First, the firm has a strong market share in customer relations, corporate communications, and business intelligence sectors. Second, the company has a strong runway for growth.
Third, has more room to start paying dividends and boost its share repurchases. Finally, analysts are bullish on the stock. According to WeBull, the average forecast for the stock is $327, which is higher than the current $211.
The Sherwin-Williams Company
Sherwin-Williams (NYSE: SHW) is one of the biggest manufacturers in the United States. The firm manufactures paints, aerosols, primers, concrete and masonry products, and wood stains among others.
It is an all-weather company that does well in all market conditions. For example, its revenue jumped from more than $17 billion in 2019 to more than $18.36 billion in 2020. Its profitability also improved.
Sherwin-Williams is a good blue-chip company for several reasons. First, it has a leading market share or moat in its industry. Second, analysts expect that the firm’s revenue will keep rising in the near term. Precisely, they expect that it will rise to $19.94 billion this year and $21.58 billion in 2022.
Third, analysts are optimistic about the stock. They expect that the share price will rise to $339, which is higher than the current $297.
Goldman Sachs (NYSE: GS) is a leading blue-chip stock that has done well this year. The GS stock price has risen by more than 56% in the past 12 months. This growth has brought the firm’s market capitalization to more than $127 billion.
Goldman Sachs is a good investment for a number of reasons. First, the company is a leading player in investment banking, an industry that has shown impressive growth lately. Second, Goldman will benefit as interest rates start rising in 2022. It is also seeing strong growth in its consumer-facing business. Finally, analysts expect that the Goldman Sachs stock price will rise to $457, which is higher than the current $330.
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