While large-capitalization enterprises don’t offer much excitement, current circumstances may call for the best blue-chip stocks to buy. Frankly, it’s getting a little bit toasty on Wall Street, which is why stability may come at a premium.
Naturally, the failure of First Republic – the third such collapse of a banking enterprise this year – generated plenty of jitters. Despite JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon’s encouraging words that the FRC takeover averted a crisis, circumstances still appear bleak. Add on various geopolitical events that may influence the Federal Reserve’s monetary policy and you have brewing skepticism.
That’s not to say that the so-called blue-chip stocks 2023 provide all the answers. However, these industry stalwarts enjoy business predictability. Therefore, you’re more likely to win with these enterprises, even if the magnitude of victory may be limited. Remember, sometimes you just need to live for another day. Therefore, check out these blue-chip growth stocks.
| LMT | Lockheed Martin | $451.93 |
| AMGN | Amgen | $231.89 |
| SNY | Sanofi | $54.73 |
| VZ | Verizon | $37.35 |
| SHEL | Shell | $59.34 |
| QCOM | Qualcomm | $106.58 |
| TSM | Taiwan Semiconductor | $83.49 |
Lockheed Martin (LMT)
Though Lockheed Martin (NYSE:LMT) easily ranks among the best blue-chip stocks to buy, this narrative has always been controversial. And in the past year-and-a-half period, this narrative has become explosively cynical. For our purposes today, I’m not even going to touch the subject that’s on everyone’s mind. Instead, I think it’s useful for investors to consider the company’s relevance in the space economy.
Fundamentally, Lockheed focuses on developing next-generation technologies, which include designing, building, and testing lunar and deep-space exploration capabilities. As Morgan Stanley analysts stated, the broader space economy could become a $1 trillion ecosystem by 2040.
Financially, Lockheed compels because of its steady three-year revenue growth rate of 5.8%. As well, the enterprise benefits from consistent profitability. Notably, its trailing-year net margin comes in at 8.6%, above 72.63% of sector players. Finally, analyst peg LMT as a consensus hold. However, their average price target is $495.08, implying over 9% upside potential.
Amgen (AMGN)
An American multinational biopharmaceutical firm, Amgen (NASDAQ:AMGN) is one of the best in the business. At the time of writing, AMGN carries a market cap of $122.53 billion. Since the beginning of this year, AMGN gave up over 12% of its equity value. And in the trailing one-year period, it slipped about 3%. Nevertheless, this may be one of the discounted blue-chip stocks to buy.
Right now, the market prices AMGN at a forward multiple of 13.18. As a discount to projected earnings, Amgen ranks better than 62% of companies in the drug manufacturing industry. Also, AMGN trades at 16.39 times free cash flow. In contrast, the sector median stat comes out to a loftier 23.3 times.
To be fair, Amgen doesn’t have the greatest strengths in the balance sheet, particularly with its ultra-low equity-to-asset ratio of 0.06. However, it enjoys a robust trailing-year net margin of 30.23%. Lastly, covering analysts peg AMGN as a consensus moderate buy. Their average price target lands at $259.46, implying over 13% upside potential.
Sanofi (SNY)
A French multinational pharmaceutical and healthcare giant, Sanofi (NASDAQ:SNY) covers seven major therapeutic areas: cardiovascular, central nervous system, diabetes, internal medicine, oncology, thrombosis, and vaccines. At the time of writing, Sanofi carries a market cap of $141 billion. Since the Jan. opener, SNY gained nearly 11% of its equity value. With a solid performance, SNY ranks among the best blue-chip stocks to buy.
Even better, SNY also makes a case for blue-chip value stocks. Currently, the market prices SNY at a forward multiple of 11.84. As a discount to projected earnings, Sanofi ranks better than 68.22% of companies listed in the drug manufacturing industry. Also, SNY trades at 14.89 times FCF. As stated earlier, the sector median stat is 23.3. Fundamentally, Sanofi offers a tad more encouragement because of its relatively stable balance sheet. Also, it enjoys a net margin of 18.44%, outpacing 87.68% of its peers.
To close out, analysts peg SNY as a consensus moderate buy. Their average price target comes out to $62, implying over 14% upside potential.
Verizon (VZ)
A telecommunications conglomerate, Verizon (NYSE:VZ) seemingly benefits from its massive footprint and compelling initiatives, such as the 5G rollout. However, circumstances haven’t been the most auspicious for the telecom giant recently. Since the Jan. opener, VZ stock slipped more than 5%. Over the past 365 days, VZ gave up more than 21% of its market value.
To be completely upfront, investment resource Gurufocus warns its readers that VZ could be a possible value trap. Further, its recent tepid financial results suggest rising competition and a tough economic backdrop. On paper, though, VZ trades at a forward multiple of 8.08. As a discount to projected earnings, Verizon ranks better than 85.44% of telecom competitors.
Operationally, Verizon prints a three-year revenue growth rate of 13.5%, above 72.19% of sector rivals. Also, its net margin is an impressive 15.85%. Turning to Wall Street, analysts peg VZ as a consensus moderate buy. Their average price target stands at $44.50, implying over 17% upside potential. Thus, it makes for a decent candidate for blue-chip growth stocks.
Shell (SHEL)
A British multinational oil and gas company, Shell (NYSE:SHEL) represents one of the biggest oil firms in the world. On paper, SHEL makes a ready case for the best blue-chip stocks to buy. Unfortunately, economic headwinds – particularly recessionary fears – have stymied the enterprise. Still, geopolitical dynamics may send hydrocarbon energy prices higher, making SHEL worth consideration.
Additionally, SHEL makes a solid case for blue-chip value stocks. Right now, the market prices SHEL at a trailing multiple of 5.12. As a discount to earnings, Shell ranks better than 66.27% of companies listed in the oil and gas industry. Also, SHEL trades at 0.54 times trailing sales. In contrast, the sector median stat is 0.91 times. On the bottom line, Shell carries a net margin of 11.04%, above nearly 64% of its rivals. Also, its return on equity (ROE) is 23.39%, indicating a high-quality enterprise.
Looking to the Street, analysts peg SHEL as a consensus moderate buy. Their average price target comes in at $71.61, implying over 22% upside potential.
Qualcomm (QCOM)
A multinational technology firm, Qualcomm (NASDAQ:QCOM) creates semiconductors, software, and services related to wireless technology. Notably, it owns critical patents in mobile communications technologies such as 5G. At the time of writing, Qualcomm carries a market cap of $125.81 billion. Since the start of the year, QCOM gained over 5% of its equity value.
One of the more undervalued best blue-chip stocks to buy, the market prices QCOM at a forward multiple of 12.22. As a discount to projected earnings, Qualcomm ranks better than 78.36% of companies listed in the semiconductor space. Also, QCOM trades at 15.89 times FCF. In contrast, the sector median is 23.62 times. Operationally, Qualcomm prints a three-year revenue growth rate of 25%, ranked above 78.55% of sector rivals. It also makes shares a compelling idea among blue-chip growth stocks.
Lastly, analysts peg QCOM as a consensus moderate buy. Overall, their average price target hits $140, implying slightly over 24% growth potential.
Taiwan Semiconductor (TSM)
A multinational semiconductor located in its namesake country, Taiwan Semiconductor (NYSE:TSM) may give some investors jitters due to the underlying sensitive geopolitical tension. Still, for those willing to take a chance, TSM ranks among the best blue-chip stocks to buy. Fundamentally, Taiwan Semiconductor is the world’s most valuable chip-manufacturing enterprise. Since the Jan. opener, TSM gained nearly 12% of its equity value.
An enticing opportunity, the market prices TSM at a forward multiple of 16.13. As a discount to projected earnings, Taiwan Semiconductor ranks better than 64.18% of the field. Also, TSM trades at 8.06 times the operating cash flow. In contrast, the sector median stat is much loftier 15.47 times. Conspicuously, the company features a three-year revenue growth rate of 28.4%, outflanking 82.47% of its peers. Therefore, it’s a strong case for blue-chip growth stocks. Also, the semiconductor specialist prints an FCF growth rate of 53% during the same period.
On a final note, analysts peg TSM as a unanimous strong buy. Their average price target lands at $118.67, implying over 43% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.