10 Best Blue Chip Stocks Of January 2024 (2024)

The Best Blue Chip Stocks of January 2024

Stock (ticker)Market Capitalization
Apple Inc (AAPL)$2.8 trillion
JP Morgan Chase & Co. (JPM)$496 billion
Walmart Inc. (WMT)$425 billion
Johnson & Johnson (JNJ)$387 billion
Procter & Gamble Co. (PG)$350 billion
AbbVie Inc. (ABBV)$285 billion
Coca-Cola Co. (KO)$258 billion
Nike Inc. (NKE)$156 billion
Honeywell International Inc (HON)$135 billion
Goldman Sachs Group Inc (GS)$125 billion

Apple Inc (AAPL)

10 Best Blue Chip Stocks Of January 2024 (1)

Market Cap

$2.8 trillion

10-Year Avg. Annualized Return

26.5%

Forward P/E Ratio

28.1

10 Best Blue Chip Stocks Of January 2024 (2)

$2.8 trillion

26.5%

28.1

Why We Picked It

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.

AAPL stock priceby TradingView

JP Morgan Chase & Co (JPM)

10 Best Blue Chip Stocks Of January 2024 (3)

Market Cap

$496 billion

10-Year Avg. Annualized Return

14.5%

Forward P/E Ratio

12.1

10 Best Blue Chip Stocks Of January 2024 (4)

$496 billion

14.5%

12.1

Why We Picked It

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.

JPM stock priceby TradingView

Walmart Inc (WMT)

10 Best Blue Chip Stocks Of January 2024 (5)

Market Cap

$425 billion

10-Year Avg. Annualized Return

9.5%

Forward P/E Ratio

24.8

10 Best Blue Chip Stocks Of January 2024 (6)

Why We Picked It

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%.

WMT stock priceby TradingView

Johnson & Johnson (JNJ)

10 Best Blue Chip Stocks Of January 2024 (7)

Market Cap

$387 billion

10-Year Avg. Annualized Return

8.8%

Forward P/E Ratio

16.6

10 Best Blue Chip Stocks Of January 2024 (8)

$387 billion

8.8%

16.6

Why We Picked It

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.

JNJ stock priceby TradingView

Procter & Gamble Co (PG)

10 Best Blue Chip Stocks Of January 2024 (9)

Market Cap

$350 billion

10-Year Avg. Annualized Return

9.4%

Forward P/E Ratio

23.7

10 Best Blue Chip Stocks Of January 2024 (10)

$350 billion

9.4%

23.7

Why We Picked It

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.

PG stock priceby TradingView

AbbVie Inc (ABBV)

10 Best Blue Chip Stocks Of January 2024 (11)

Market Cap

$285 billion

10-Year Avg. Annualized Return

16.7%

Forward P/E Ratio

16.0

10 Best Blue Chip Stocks Of January 2024 (12)

$285 billion

16.7%

16.0

Why We Picked It

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.

ABBV stock priceby TradingView

Coca-Cola Co (KO)

10 Best Blue Chip Stocks Of January 2024 (13)

Market Cap

$258 billion

10-Year Avg. Annualized Return

7.3%

Forward P/E Ratio

23.5

10 Best Blue Chip Stocks Of January 2024 (14)

$258 billion

7.3%

23.5

Why We Picked It

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%.

KO stock priceby TradingView

Nike Inc (NKE)

10 Best Blue Chip Stocks Of January 2024 (15)

Market Cap

$156 billion

10-Year Avg. Annualized Return

11.3%

Forward P/E Ratio

26.5

10 Best Blue Chip Stocks Of January 2024 (16)

$156 billion

11.3%

26.5

Why We Picked It

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.

NKE stock priceby TradingView

Honeywell International Inc (HON)

10 Best Blue Chip Stocks Of January 2024 (17)

Market Cap

$135 billion

10-Year Avg. Annualized Return

11.4%

Forward P/E Ratio

20.6

10 Best Blue Chip Stocks Of January 2024 (18)

$135 billion

11.4%

20.6

Why We Picked It

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.

HON stock priceby TradingView

The Goldman Sachs Group Inc (GS)

10 Best Blue Chip Stocks Of January 2024 (19)

Market Cap

$125 billion

10-Year Avg. Annualized Return

10.1%

Forward P/E Ratio

11.2

10 Best Blue Chip Stocks Of January 2024 (20)

$125 billion

10.1%

11.2

Why We Picked It

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.

GS stock priceby TradingView

*All analysis and data are sourced from StockRover.com, current as of January 4, 2024.

Methodology

Our picks for the best blue chip stocks were selected with an eye to reliable earnings, growing dividends, strong returns and reasonable valuations. The stocks outlined above are traded on U.S. exchanges and meet the following requirements:

  • High market capitalization and annual revenue. Each stock has a market cap of at least $75 billion and revenue last year over $20 billion.
  • Steady profits. The companies have delivered positive earnings for at least seven years.
  • Growing dividends. The companies have paid steady and increasing dividends over the past decade.
  • Limited price pullbacks. Each stock has not experienced a sustained decline of more than 50% in the past 10 years. For reference, 92% of North American stocks have had a price drop bigger than 50% within the past decade. With few stocks meeting this criteria, it’s an excellent measure of historical stock price stability.
  • Impressive 10-year returns. All stocks listed appreciated by at least 50% over the past decade
  • Shareholder yield greater than zero. Shareholder yield is a combination of dividends, share buybacks and share issuance. Negative numbers mean the company is increasing the shares outstanding and diluting shareholders.
  • Reasonable valuations. For our picks, reasonable means a P/E ratio and forward P/E ratio below 40 and 35, respectively. Buying stocks at lower P/E levels tends to produce better returns over time. And while P/E levels may gradually rise, that is not necessarily a signal to sell a stock, assuming the other criteria remain solid.

To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.

Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance.

Blue Chip Stocks of January 2024

As an expert and enthusiast, I can provide information about the concepts used in the article "The Best Blue Chip Stocks of January 2024." The article discusses several blue chip stocks and provides details about their market capitalization, average annualized return, forward P/E ratio, and reasons for their selection.

Blue chip stocks are shares of well-established companies with a history of stable earnings, reliable dividends, and a strong market presence. These stocks are often considered less risky investments compared to smaller or more volatile companies.

Let's go through the concepts mentioned in the article:

1. Market Capitalization: Market capitalization refers to the total value of a company's outstanding shares of stock. It is calculated by multiplying the current stock price by the number of shares outstanding. The article mentions the market capitalization of various blue chip stocks, such as Apple Inc (AAPL) with a market cap of $2.8 trillion, JP Morgan Chase & Co. (JPM) with a market cap of $496 billion, and so on.

2. Average Annualized Return: The average annualized return represents the average percentage gain or loss an investment has experienced over a specific period, usually calculated on an annual basis. The article provides the 10-year average annualized return for each blue chip stock mentioned. For example, Apple Inc (AAPL) has a 10-year average annualized return of 26.5%, JP Morgan Chase & Co. (JPM) has a 10-year average annualized return of 14.5%, and so on.

3. Forward P/E Ratio: The forward price-to-earnings (P/E) ratio is a valuation metric used to assess the relative value of a company's stock. It is calculated by dividing the current stock price by the estimated earnings per share for the next 12 months. The article mentions the forward P/E ratio for each blue chip stock. For instance, Apple Inc (AAPL) has a forward P/E ratio of 28.1, JP Morgan Chase & Co. (JPM) has a forward P/E ratio of 12.1, and so on.

The article provides reasons for selecting each blue chip stock, including factors such as market capitalization, historical performance, dividend yield, stability, and valuation. It's important to note that the article's information is based on the analysis and opinions of the author, and it's always recommended to conduct thorough research and consider your own financial goals and risk tolerance before making any investment decisions.

Please let me know if you have any specific questions or if there's anything else I can assist you with!

10 Best Blue Chip Stocks Of January 2024 (2024)

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