There is nothing wrong with chasing some of the stocks that are hot right now, but a good portfolio must include a fair amount of good blue-chip stocks to get a stable foundation. Blue-chip stocks are companies that are clear leaders in various industries and sectors, with a solid position, if not an absolute competitive advantage.
Because blue-chip stocks are almost all large-cap companies, they are generally valued at more than $10 billion. Blue-chip stocks are also in good financial, whether it's stock performance, revenue or profitability.
In addition to these, they also have a good reputation, built on the quality of products and investors' confidence in the company's mission and management. Using Portfolio Grader, here are some great blue-chip stocks that investors can focus on in the fourth quarter.
United Airlines is one of the world's largest commercial airlines, with a market capitalization of more than $14 billion and a leading market share in the United States. The company earned $1.08 billion, or $5.03 per share, in the second quarter.
The results also showed that the average daily flight volume was more than 2,400 during the quarter, a record high for the company. Management also raised its full-year earnings guidance, and now projecting earnings per share in a range between $11 and $12.
Over the summer, as fuel prices rose, analysts began to worry that it would affect the airline's profitability in the third quarter, a reason for the recent decline in the company's shares.
But as a long-term investor, the airline stock's potential and attractive valuation cannot be ignored, with forward price-to-earnings ratio now below 4 times. UAL stock is up 10.93% in 2023 and has a "B" rating from Portfolio Grader, making it one of the best blue-chip stocks to buy right now.
As the top blue-chip stock in the U.S., Alphabet owns the Google search engine, YouTube, Waze driving app, Fitbit fitness trackers and Waymo self-driving cars, with a market capitalization of $1.6 trillion. Of course, the company's most important business is still Google, and Google's global market share is close to 92%.
Alphabet is also adding generative AI into its products, the latest being the Bard Extensions, a chatbot resembling a Google account that will use generative AI to answer questions using information from Gmail, Google Docs, Google Maps and other extension tools.
Alphabet's second-quarter revenue was $74.6 billion, up 7 percent from a year earlier. More than $42 billion of that comes from Google search revenue. GOOGL shares are up 56.35% in 2023 and have a "B" rating from Portfolio Grader.
Exxon Mobil has long been one of investors' favorite oil and gas stocks. The company is massive, with a market capitalization of nearly $460 billion, making it the largest energy company in the United States.
The energy stock itself had a choppy 2023, with shares drop 2.84% year-to-date. The second-quarter earnings also raised concerns among some investors, as profits fell 56% from a year ago. The reason behind this, of course, has to do with oil prices.
For energy producers, higher oil prices mean higher revenue and profitability for companies. In 2022, oil prices exceeded $100 per barrel, but fell below $70 per barrel in the second quarter of this year, now the situation is improving again.
Natural gas prices are rising as Saudi Arabia sticks to production cuts. JPMorgan analysts predict oil could return to $120 a barrel. While that won't be friendly to consumers' wallets, it will also allow the oil majors to return to near-record profitability. XOM shares have a "B" rating at Portfolio Grader.
If you are looking for a market leader in the restaurant industry, then McDonald's should be the first choice. Founded in Belladino, California, in 1940, McDonald's started small, but its operators figured out how to produce food cheaply and on a large scale, revolutionizing the fast food and restaurant franchise model.
In fact, McDonald's was the first company to figure out how to replicate the catering process so that customers would get the same experience and quality no matter which McDonald's branch they were in.
Today, McDonald's has more than 38,000 restaurants in 100 countries. The company's revenue for the second quarter was $6.47 billion, up 14% from a year earlier, while net income was $2.31 billion, up 94% from a year ago.
Second-quarter earnings per share was $3.15, up 97% from the same period last year. McDonald's also gives you the added bonus of offering a dividend, which currently yields just over 2%. MCD shares are down 5.81% in 2023 and have a "B" rating from Portfolio Grader.
As recently as this summer, Intel was languishing with a failing grade after two consecutive quarterly losses. But in the second quarter, Intel returned to profitability with net income of $1.5 billion, or 35 cents per share. Intel's turnaround was driven in part by $1.7 billion in cost cuts, part of management's goal to cut $3 billion in expenses this year.
Overall, the company wants to save $10 billion a year by 2025 to achieve leaner goals. That lifted the company's gross margin to 40% in the second quarter, beating expectations of 37.5%.
In addition, Intel has high hopes for its Gaudi 2 chip for artificial intelligence applications, saying it is on par with competitors in some tasks. It also plans to release its next-generation Gaudi 3 chip in 2024. So it should be time to give Intel stock some respect. INTC stock gets a “B” rating in the Portfolio Grader.
It's hard to mention Intel without talking about Nvidia. In fact, this tech stock remains the top pick for most investors in the semiconductor space, and it's also a highly successful blue-chip stock, with a market value that soared more than $1 trillion this year. Nvidia's success cannot be achieved without generative AI, because developers are constantly applying AI techniques to most technology products.
Nvidia, which makes the chips needed for generative AI, has a dominant market share of 80% to 95% of the AI computing market. After blowing past expectations in the second quarter, Nvidia issued guidance of $16 billion in revenue for the third quarter, and analysts are bullish on the company to hit that target. NVDA shares are up 190% this year and have an "A" rating from Portfolio Grader.
Apple is the largest company in the world with a market capitalization of more than $2.77 trillion. Shares of the smartphone, tablet and computer maker are up 33% in 2023. On September 12, Apple announced its latest product line: the iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max. Apple also announced the Apple Watch Series 9, Apple Watch Ultra 2, and the second-generation AirPods Pro.
Pre-orders for Apple's new iPhone 15 are as strong as ever, especially in the massive Chinese market. Pre-orders for the iPhone 15 Pro Max is five to six weeks, which is the longest waiting time for an Apple smartphone in seven years. “While it’s far too early to call the cycle, these data points are encouraging,” Morgan Stanley analysts said.
Wedbush Securities analyst Dan Ives said he believed the iPhone wolud drive $Apple(AAPL)$ 's stock to $240 per share in the next 12 months. As of Friday's close, AAPL shares were trading at $177.49. AAPL stock has a “B” rating in the Portfolio Grader.
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