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10 Blue-Chip Stocks to Buy to Anchor Your Portfolio in 2020

Posted on Monday, November 12th, 2018 by Chris Markoch
10 Blue-Chip Stocks to Buy to Anchor Your PortfolioThe mid-term elections are over, but the market volatility will probably continue. The ongoing trade war with China is one issue that has the market seeking direction, there’s the ongoing debate about the future of health care policy, and inflation is peeking its head above the economy and could be an issue for businesses in 2019.

But let’s not be a party pooper. The period right after mid-term elections is typically the best time to invest and there are plenty of market fundamentals (including the continued strength in the job market) that indicate this year will be no different.

However, for investors to get the benefit of this robust economy they need to balance growth with income, and that increases the appeal of blue-chip stocks.

Blue-chip stocks give investors a Goldilocks solution to stock selection. They may not be red-hot stocks, but they’re not overly conservative either. They offer the benefits of growth and the security of income. That combination makes them safe stocks that can provide an anchor for a portfolio during volatile times. Three of the characteristics that define blue-chip stocks are that they are well-known companies, they have a strong record of positive earnings and dividends, and they are widely held by investors.

We’ve put together a list of 10 blue-chip stocks that are a solid anchor for your portfolio at any time.

#1 - 3M (NYSE:MMM)

3M logo

3M (NYSE: MMM) Since dropping 28% off its all-time high in January, 3M’s stock may have found a bottom. In a time where many companies are looking to shed extraneous business units to focus on “core competencies”, 3M has embraced a wide range of products and services beyond the office supplies it has become known for. But the real competitive advantage for 3M is research and development (R&D) that allows them to create products that offer value beyond their price, making them more than a commodity, and giving them the ability to have more control over prices. The investment has given the company the ability to make sales regardless of the economy, essentially turning it into a defensive stock, and has given them an ability to grow both their revenue and earnings per share (EPS). Like many blue-chip stocks, 3M is a dividend king, paying and increasing a dividend every year since 1977, and analysts see no sign that the trend will end in 2018.

About 3M
3M Company operates as a technology company worldwide. The company's Industrial segment offers tapes, abrasives, adhesives, ceramics, sealants, specialty materials, purification products, closure systems, acoustic systems products, automotive components, abrasion-resistant films, and paint finishing and detailing products. Read More 

Current Price: $160.42
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 7 Hold Ratings, 3 Sell Ratings.
Consensus Price Target: $169.00 (5.3% Upside)



#2 - Amazon (NASDAQ:AMZN)

Amazon.com logo

Amazon (NASDAQ: AMZN) If investors think that Amazon’s stock does not have room to grow, they need to take a closer look. Consumers certainly are. A recent report from CNBC shows the beginning of what could be a trend for advertisers moving their advertising dollars away from Google and towards Amazon. The rationale is that Amazon is where many consumers (some estimates say the number could be as high as 55%) are beginning their search for products, so it’s logical that advertisers would want to be in place to capture those eyeballs. This is setting up to be a lucrative space for Amazon, but it’s only part of the story. With plans to buy Landmark Theaters, AMZN is poised to have a location for its original content. And Amazon continues to make inroads into the consumer packaged-goods arena which is projected to be a $760 billion market by 2020. Amazon has already shown its ability to step into new markets like health and household essentials and quickly become a market share leader. If successful, their move into packaged goods will continue to show how the company finds ways to use its existing businesses to shorten its time to market in other sectors.

About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS) segments. It sells merchandise and content purchased for resale from third-party sellers through physical stores and online stores. Read More 

Current Price: $3,019.79
Consensus Rating: Buy
Ratings Breakdown: 47 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $3,358.77 (11.2% Upside)



#3 - Microsoft (NASDAQ:MSFT)

Microsoft logo

Microsoft (NASDAQ: MSFT) Another tech stock that deserves to be part of a stable, blue-chip portfolio is Microsoft. During the recent October correction, Microsoft’s stock only dropped 6.6% compared with competitors’ stock that fell over 20%. The stock is up over 20% for the year and has averaged 26% over the last five years. At first glance, investors may look at the dominant market share they receive from their Windows operating system and wonder where is the growth coming from? Microsoft has been less successful at breaking into the mobile arena as Android and iOS systems have made it difficult for Windows to gain traction on mobile devices. However, that doesn't mean Microsoft will be left behind. Mobile computing relies on cloud storage, and Microsoft is well positioned in this space with their cloud operating division, Azure. The company is also aggressively pursuing the nascent artificial intelligence market and making inroads into the Internet of Things. Meanwhile, their Xbox One gaming console remains popular and the company is beginning to make inroads with their Surface brand of laptop/tablet hybrids. Put it all together and you see a company that is becoming much more multi-faceted and well-positioned for growth beyond their Windows operating system.

About Microsoft
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its company's Productivity and Business Processes segment offers Office 365 commercial products and services, such as Office, Exchange, SharePoint, Skype for Business, Microsoft Teams, and related Client Access Licenses (CALs); Office 365 consumer services, including Skype, Outlook.com, and OneDrive; LinkedIn online professional network; and Dynamics business solutions comprising financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of enterprises. Read More 

Current Price: $203.19
Consensus Rating: Buy
Ratings Breakdown: 32 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $217.45 (7.0% Upside)



#4 - Visa (NYSE:V)

Visa logo

Visa (NYSE: V) In an increasingly paperless, and cashless, society, Visa is showing its strength. This blue-chip financial company has seen its stock rise 37% in the past 12 months. Visa stands to capture a large segment of the market as consumers and financial institutions are moving away from cash and towards the convenient of debit cards. But this is not just a United States issue. In fact, the United States may not even be the tip of the spear. Instead, you can look at developing economies where debit cards are becoming the primary payment method. But the strength of Visa goes beyond the debit card arena. Visa’s stock continues to outperform other mobile payment systems such as PayPal. Investors who do not currently own Visa should keep an eye on their valuation. The stock currently has a Forward P/E ratio of 26.26 which puts the stock at a premium to the industry average.

About Visa
Visa Inc operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a processing network that enables authorization, clearing, and settlement of payment transactions; and offers fraud protection for account holders and assured payment for merchants. Read More 

Current Price: $195.52
Consensus Rating: Buy
Ratings Breakdown: 24 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $215.04 (10.0% Upside)



#5 - Netflix (NASDAQ:NFLX)

Netflix logo

Netflix (NASDAQ: NFLX) Remember a few years ago when people thought the idea of streaming content was a fad? Remember when investors were presuming that a company like Netflix had to have more to offer than just being an alternative to their local video store? Then Netflix started creating its own content and the ballgame changed. The company continues to fundamentally change not only how we watch, but what we watch. The company faces competition in the streaming space as evidenced by it recently missing on its subscriber goals which caused its stock to take a small loss. However, with the stock up 64% for the year, it seems investors are not jumping ship. One of the reasons for this is that the company continues to sign major talent, such as the creator of the ABC hit show Black-Ish, Shonda Rimes (Grey’s Anatomy) and Ryan Murphy (American Horror Story). Not only does this create confidence that Netflix will continue to create compelling new content while keeping this talent off the market.

About Netflix
Netflix, Inc provides Internet entertainment services. The company operates in three segments: Domestic streaming, International streaming, and Domestic DVD. It offers TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. Read More 

Current Price: $473.08
Consensus Rating: Hold
Ratings Breakdown: 25 Buy Ratings, 12 Hold Ratings, 6 Sell Ratings.
Consensus Price Target: $493.90 (4.4% Upside)



#6 - Nike (NYSE:NKE)

Nike logo

Nike (NYSE: NKE) Normally, when a company is not in the news, it’s not a good sign for the stock. But in the case of Nike, no news means no bad news. When you consider the controversies surrounding Under Armour and Adidas, particularly with major college sports, staying out of the news is very good for Nike’s stock. Their relative lack of news is not to say that Nike has been a laggard. The stock is up over 40% in the past 12 months. Part of the reason for the growth is increasing revenues in the United States as the economy has strengthened. One of the major speed bumps for Nike, as well as its competitors, is the ongoing trade war with China. Slower sales in China will be a drag on sales in Asia in general. However, the brand is still showing global strength and, in fact, investors largely shrugged off the 11% October correction in the stock that was slightly higher than the 7% decline in the S&P 500.

About Nike
NIKE, Inc, together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. The company offers NIKE brand products in six categories: running, NIKE basketball, the Jordan brand, football, training, and sportswear. It also markets products designed for kids, as well as for other athletic and recreational uses, such as American football, baseball, cricket, lacrosse, skateboarding, tennis, volleyball, wrestling, walking, and outdoor activities; and apparel with licensed college and professional team and league logos, as well as sells sports apparel. Read More 

Current Price: $124.75
Consensus Rating: Buy
Ratings Breakdown: 29 Buy Ratings, 4 Hold Ratings, 3 Sell Ratings.
Consensus Price Target: $132.27 (6.0% Upside)



#7 - Union Pacific (NYSE:UNP)

Union Pacific logo

Union Pacific (NYSE: UNP) One of the cornerstones of a healthy economy is the idea of moving goods from point A to point B. And with the U.S. economy growing, and expected to grow even more with the mid-term elections behind us, investors should look at a company such as Union Pacific. UNP is more than a railroad; it's branched out into intermodal transportation services which are keeping the company relevant in the 21st-century economy. As evidence of that, the stock is up over 40% in the past 12 months. A swift resolution to the trade war and dueling tariffs would be a welcome benefit for the company. But even if the trade war lingers, UNP should benefit from increasing consumer spending of goods and services in the United States. Fundamentally, this blue-chip stock is known for having a strong balance sheet, a history of paying out – and growing – dividends, and a low payout ratio.

About Union Pacific
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, engages in the railroad business in the United States. It offers transportation services for agricultural products, including grains, commodities produced from grains, fertilizers, and food and beverage products; coal and sand, as well as petroleum, liquid petroleum gases, and renewables; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, and soda ash, as well as intermodal and finished vehicles. Read More 

Current Price: $195.67
Consensus Rating: Buy
Ratings Breakdown: 17 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $180.61 (-7.7% Upside)



#8 - Southern Company (NYSE:SO)

Southern logo

Southern Company (NYSE: SO) Utility stocks are frequently considered to be solid, blue-chip stocks for many investors. Generally, they enjoy monopolies in the areas they serve, helping them receive a steady revenue stream in those markets. After all, consumers need the basic services that they provide. One of the appeals of utility stocks is their ability to pay a dividend. In that respect, Southern Company does not disappoint. Southern Company is the nation’s second-largest utility company with a customer base of around 9 million. In addition to having an attractive 5.4% dividend yield, Southern Company is considered a dividend aristocrat, having paid out a regular dividend for 70 years, including 16 years where the annual payout has been on the rise. But what makes this stock an attractive play right now is that it’s actually showing growth. The company has expanded its unregulated business beyond its typical role in power generation and electrical distribution (which are highly regulated markets) to include natural gas (less regulated). They have done this through acquisitions and saw Q1 profits soar 33% from the same period last year.

About Southern
The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It operates in four segments: Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services. The company also constructs, acquires, owns, and manages power generation assets, including renewable energy facilities and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, wholesale gas services, and gas pipeline investments operations. Read More 

Current Price: $53.05
Consensus Rating: Hold
Ratings Breakdown: 5 Buy Ratings, 7 Hold Ratings, 3 Sell Ratings.
Consensus Price Target: $62.04 (16.9% Upside)



#9 - Walt Disney (NYSE:DIS)

Walt Disney logo

Walt Disney (NYSE: DIS) Admit it, when you look through your social media feed it’s hard to deny that Walt Disney World, and its surrounding properties, continues to have tremendous appeal regardless of the time of year. So while they are increasingly being known, and defined, as an entertainment brand, they are still magical at monetizing their theme parks and resorts which help offset any weakness it may suffer in its entertainment business. As a case in point, in 2017 despite weakness in its studio business, the company was able to limit its earnings decline to a single percent largely due to strength in its theme parks. Although analysts expect Disney to enjoy continued revenue growth through its parks and resorts, as well as the release of several successful films such as Ant Man and The Wasp, they are equally excited about Disney’s successful bid to buy select assets of 21stCentury Fox which would broaden its content base. 

About Walt Disney
The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company's Media Networks segment operates cable programming businesses under the ESPN, Disney, and Freeform brands; broadcast businesses, including ABC TV Network and eight owned television stations; and radio businesses. Read More 

Current Price: $122.49
Consensus Rating: Buy
Ratings Breakdown: 17 Buy Ratings, 10 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $131.15 (7.1% Upside)



#10 - Aflac (NYSE:AFL)

AFLAC logo

Aflac (NYSE: AFL) Healthcare, and how to pay for it, is one sector that will remain at the forefront of consumer's minds and wallets well into 2019 and beyond. Aflac is a supplemental insurance provider that helps consumers by providing insurance that can help them pay the high costs that come from unanticipated health costs. But while Aflac is well-known in the United States, it earns 75% of its profits from Japan. From a fundamental perspective, there's a lot to like about Aflac. To begin with, the stock trades at 11 times forward estimates on 2019 earnings, and they have earnings per share growth for next year that is forecast at 1.99%. But one of the real appeals of a stock like AFL is the dividend. Aflac is a dividend aristocrat, having issued a dividend for the last 36 years. And they are also expecting to see a benefit from a stronger Japanese yen.

About AFLAC
Aflac Incorporated, through its subsidiaries, provides voluntary supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans, and annuities in Japan. Read More 

Current Price: $35.67
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $45.13 (26.5% Upside)

 

Historically, the period after a mid-term election is a great time to be invested in stocks, and 2018 looks to be no different. With institutional investors taking a closer look at fundamentals now that the noise of the election has quieted down, it's a time for investors to take a close look at blue-chip stocks that provide both steady income by way of a dividend – and the potential for growth by being in markets and sectors that are at the core of a robust U.S. economy. The blue-chip stocks in this presentation represent a cross-section of stocks. From technology to healthcare to utilities, you can find quality stocks that will help provide diversification for your portfolio. You can track these stocks, as well as others, at MarketBeat.com and bolster your portfolio for 2019 and beyond.

10 Oversold Stocks That Are Ready For a Comeback

A fundamental concept of investing is to buy stocks at a value. One strategy used by investors is to focus on stocks that are oversold. Fundamental analysis can give investors an idea of certain stocks to look at. However, momentum is also important. For that reason, investors look for technical indicators to help them find oversold stocks that might be ready for a comeback.

One of the most popular tools is the Relative Strength Index (RSI). The RSI is a momentum indicator that measures the velocity and magnitude of price movements. The index also compares them with the magnitude of average gains and average losses. The formula for calculating RSI is as follows:

RSI = 100 - ( 100 / 1 + RS) Where RS (Relative Strength) is the average gain divided by the average loss.

Investors can use virtually any timeframe they wish. One of the most common is a 14-day RSI. Decreasing the number of days makes the RSI more sensitive to price changes. Conversely increasing the number of days makes the indicator less sensitive to price changes. Investors may have different overbought or oversold indicators, but standard benchmarks are a stock may be overbought if its RSI exceeds 70 and may be oversold if its RSI exceeds 30.

The stocks in this presentation are chosen for a variety of fundamental and technical indicators. And all the stocks have been affected in one form or another by the Covid-19 pandemic.

View the "10 Oversold Stocks That Are Ready For a Comeback" Here.






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