Blue Chip Stocks Explained
Blue chip stocks are the shares of well-established, industry leading companies which have a history of consistent performance. These companies typically have strong brands which are well-known and respected around the world.
In this article, we explain what blue chip companies are, highlight their benefits and drawbacks, and examine 10 top blue chip stocks from around the world.
The information in this article is provided for educational purposes only and does not constitute financial advice. Consult a financial advisor before making investment decisions.
Key Takeaways
- Blue chip stocks are large, well-established companies.
- They typically pay dividends and tend to be components in benchmark indices such as the S&P 500 or Dow Jones.
- Apple, Coca-Cola and Unilever are examples of some of the top blue chip stocks.
- Blue chip companies might appeal to long-term, income-focused investors, but perhaps less so to investors focused on growth.
What Is a Blue Chip Company?
A blue chip company, or blue chip stock, is a term used to describe a large, well-established, financially sound and reputable company.
Investing in Blue Chip Stocks
Due to their financial stability, income potential and established positions within their industries, blue chip stocks are often popular with long-term investors who favour a “buy and hold” type of strategy.
However, whilst there are a number of benefits associated with investing in blue chip stocks, there are also a number of drawbacks for investors to consider.
Benefits
- Stability: Tend to be less volatile than other stocks, which can provide stability to your portfolio.
- Long-Term Growth Potential: Usually associated with increasing sales and earnings over the long-term, although that is by no means guaranteed.
- Income Potential: Most pay regular dividends, and many tend to increase these payments over time. However, it should be noted that future dividends are never guaranteed.
- Resilience: They tend to offer increased resistance to economic downturns, thanks to consistent demand for their products and strong balance sheets.
- Moats: Often have competitive advantages which can help protect their business from rivals.
Drawbacks
- Slower Grow: Due to their already large size and historic success, these companies may grow more slowly.
- Opportunity Cost: May underperform during bull markets when compared to smaller companies
- Not Risk-Free: One of the often-cited benefits of blue chip stocks is that they are less risky than other stocks. However, risk still exists. Blue chip companies are not immune to market downturns and may lose market share to competitors.
Top 10 Blue Chip Stocks List
Now we know what blue chip stocks are and why people invest in them, let’s take a look at some top examples.
Below is a table which highlights 10 top blue chip stocks from the US, UK and Europe. In the following sections, we’ll take a look at each one in a bit more detail.
Apple (AAPL)
Like most companies on this list, Apple needs little introduction. It’s one of the largest, most profitable companies in the world, and is responsible for popular products such as the iPhone, iPad and MacBook.
Something which has greatly contributed to Apple’s success is its ability to keep customers within its ecosystem of products and services. Indeed, Apple enjoys a particularly high degree of loyalty from its customer base.
Apple is a component of the S&P 500 and Dow Jones stock indices. Since 2012, it has paid a quarterly dividend which has gradually increased over time.
Visa (V)
Visa owns and operates a vast, global payment network that enables transactions all over the world.
It doesn’t issue its own cards or extend credit to cardholders. Instead, Visa simply charges a fee for every transaction which uses its payment network. Consequently, it generates revenue whenever someone makes a payment using a Visa card, without being exposed to the risk involved in extending credit to cardholders.
Visa has a solid history of dividend payments. Since its Initial Public Offering (IPO) in 2008, it has increased its dividend every year.
Walmart (WMT)
Walmart is a retail corporation which operates a vast chain of supermarkets and discount stores across the US and other countries.
It is the biggest company in the world in terms of revenue. Although Walmart was originally listed on the New York Stock Exchange in 1972, it switched its listing to the Nasdaq in December 2025.
Walmart has an impressive track record when it comes to paying dividends. It has increased its annual dividend every year for more than 50 years, giving it the prestigious title of being a dividend king.
| Dividend King: A title given to dividend stocks which have grown their annual dividend payment for more than 50 consecutive years. |
Coca-Cola (KO)
The next blue chip company on our list is responsible for one of the world’s most recognisable brands.
Wherever you are, chances are you will find Coca-Cola on the shelves of your local shop. Besides its namesake soft drink, the company owns a vast array of other beverages – including well-known brands such as Fanta, Sprite and Appletiser.
If you thought Walmart’s dividend history was impressive, Coca-Cola's is even more so. It also boasts the title of dividend king, having increased its annual payout every year for more than 60 years.
Unilever (UVLR)
Moving on to UK blue chip stocks, the next on our list is consumer goods giant and FTSE 100 constituent Unilever.
If you haven’t heard of Unilever, you will have most likely heard of some of their brands, which include Dove, Hellmann’s and Vaseline. Recently, Unilever spun off its ice cream division, creating a new company named The Magnum Ice Cream Company which has its primary listing on the Euronext Amsterdam.
For the last 25 years, Unilever has either maintained or increased its annual dividend to shareholders.
HSBC (HSBA)
One of the “Big Four” UK banks, HSBC is the largest bank in Europe in terms of both market capitalisation and total assets.
Although the bank is listed on the London Stock Exchange (LSE), it generates the majority of its revenue from Asia. Indeed, in the last few years, the bank has focused its attention on fast growing markets in this region.
Like the other UK blue chip companies on this list, HSBC has a long history of distributing dividends, having consistently made payouts for more than 20 years. However, it has reduced its dividend on a number of occasions.
AstraZeneca (AZN)
AstraZeneca is currently the largest company on the LSE and, consequently, the largest member of the FTSE 100.
It is a pharmaceutical and biotechnology company, with a portfolio focused on oncology, biopharmaceuticals, rare diseases and vaccine and immune therapies. It’s probably best known for developing a Covid-19 vaccine with Oxford University which was used around the world during the pandemic.
AstraZeneca has consistently paid dividends to its shareholders for more than 20 years.
Nestlé (NESN)
Swiss company Nestlé is the largest food company in the world by market cap. It owns a vast range of food and drink brands, including Häagen-Dazs, KitKat and Nescafé.
Nestlé is a member of the Swiss Market Index (SMI) - Switzerland’s blue chip stock index – and has paid dividends to its shareholders every year since 1959.
LVMH (MC)
Next on the blue chip stocks list is French company LVMH Moët Hennessy Louis Vuitton, which specialises in luxury goods.
The company was formed in 1987 when fashion label Louis Vuitton merged with Moët Hennessy (which itself was formed via a merger in 1971 between champagne producer Moët & Chandon and cognac producer Hennessy).
LVMH is a member of the French benchmark index CAC 40, as well as the STOXX 50 index, which is composed of European blue chip stocks listed in the euro area. It has consistently paid dividends to shareholders for more than 25 years.
ASML (ASML)
The last company we’ll look at is the largest company in Europe by market cap. ASML is a Dutch technology company which specialises in developing and manufacturing photolithography systems.
These machines are used by semiconductor producers to create the microchips which are used in modern electronic devices around the world. In fact, there’s a high chance that the device you’re reading this on contains a chip created using technology developed by ASML.
Like LVMH, ASML is a component of the STOXX 50 European blue chip index and is also part of the Dutch AEX Index. It has paid dividends every year for almost 20 years.
How to Invest in Blue Chip Companies
There are a couple of different ways that investors can gain exposure to blue chip companies, the first of which is by buying shares in blue chip stocks directly.
Alternatively, investors may also consider investing in a mutual fund or Exchange-Traded Fund (ETF) which provides exposure to blue chip stocks. These funds can offer investors diversification over a variety of blue chip companies through a single investment.
There are many types of funds which track blue chip stock indices, such as the Dow Jones and the FTSE 100.
However, there are also lesser-known indices to consider, such as the S&P 500 Dividend Aristocrats Index. This index is composed only of S&P 500 companies which have increased their dividends for at least 25 consecutive years.
Whichever way you choose to invest, the process is mostly the same:
- Register for an investing account with a broker, such as Admiral Markets, which provides access to blue chip stocks and ETFs and complete the onboarding process.
- Log in to your account and open the trading platform.
- Search for the stock or ETF you want to invest in and open the instrument page.
- Create a new order, enter the number of shares you want to buy and send your order to the market.
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Frequently Asked Questions
What are UK blue chip stocks?
Examples of UK blue chip stocks include Unilever, AstraZeneca and HSBC.
Do blue chip stocks pay dividends?
Yes, most blue chip stocks pay dividends to their shareholders and many have a history of increasing these payouts over time.
Can blue chip stocks lose value?
Yes. Although blue chip companies may have a reputation for stability their values can, and do, decline, just like any other company. This may be due to market turmoil, an economic downturn, a poor earnings report or any other company specific issues.
How do blue chip stocks perform during recessions?
Blue chip stocks can sometimes weather a recession better than smaller companies, thanks to their typically strong fundamentals and robust balance sheets. However, that may not always be the case. Performance will vary depending on the company in question and the nature of the recession.
How can investors gain exposure to blue chip stocks?
Investors can gain exposure to blue chip companies by buying shares in them directly or by investing in a mutual fund or ETF which tracks a blue chip stock index.
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