Blue-chip equities should be included in a high-risk portfolio. Investors tend to overweight their portfolios toward growth stocks in a bull market. Speculative meme stocks have been in the spotlight during our current bull market, but not as much as they once were. The cyclically adjusted price-to-earnings ratio for the S&P 500 is 38.4x. Blue-chip stocks are unlikely to produce multi-fold gains in a short period. On the other hand, dividends and share repurchases are a constant source of shareholder value creation.
Here is Insider Monkey’s list of the 10 best blue-chip dividend stocks. Chevron is in a good position to profit from rising oil prices. The company has a lot of financial flexibility and a lot of visibility into its free cash flow. Chevron is well positioned for long-term wealth generation, with a long reserve life and low break-even assets. Apple’s stock has been relatively quiet this year, but a breakout to the upside appears to be on the way. Apple’s revenue increased by 29% to $83.4 billion in the fourth quarter of 2021. The iPhone category, unsurprisingly, continues to be the cash flow generator. This year, the business expects to generate $75 billion in global ecommerce sales. In 2018, Walmart purchased a 77 percent stake in Flipkart (India). In July 2021, the Indian e-commerce behemoth was valued at $37.6 billion. Tesla is expected to grow in value during the next five years. The corporation operates gigafactories in the United States and China, with a third set in Europe in 2022. Tesla reported $1.3 billion in free cash flow in the third quarter of 2021. In the first quarter of 2022, Microsoft’s sales increased by 22% to $45.3 billion. The business returned $10.9 billion to stockholders through dividends and share repurchases. Microsoft is likely to pursue purchases as long as it has a healthy financial buffer. The $135 billion order backlog of Lockheed Martin gives strong revenue visibility. Orders from countries other than the United States have increased significantly. With NATO partners still falling short of their defense budget targets, order intake is expected to stay high. Pfizer is another inexpensive blue-chip stock that can rise in 2022. Trillium Therapeutics was recently purchased for $2.26 billion, expanding the company’s cancer pipeline. Pfizer has financial flexibility for acquisitions due to high cash flows forecast in the future quarters. For more details, click 10 Best Blue-Chip Dividend Stocks.
