Blue Chip Stocks For Long Term Investment

Meaning of Blue Chip Stocks -

Bluechip stocks are high-quality stocks that belong to companies that are well-established, large, well-known, and have been in the market for decades. The term "blue chip stocks" is derived from the card game "poker," in which the blue betting disc or "chip" has the highest value. The term "blue chip" is used to describe the "highest-valued stock." Some of them are dividend-paying stocks with high yields. A blue-chip stock is either the market leader in its sector or one of the top three in terms of market capitalization. Because of all of these reasons, they are extremely common among investors.

is it Blue chip stocks a good investment?

Any investor will want to put their money into a company that has been profitable for many decades. Blue-chip stocks aim to make money for shareholders over the long term, even though they aren't always among the most popular stocks. As a result, these are excellent investments for those who can stick with them through good times and bad. Their solid financial position, consistent growth rate, excellent management team, brand recognition, and reputation keep them afloat through difficult business cycles and industry trends.

Most bluechip companies in India have a market capitalization of more than Rs 20,000 crores, as a rule of thumb. Stocks that are debt-free are the bluest of the blue chips. Blue-chip firms, on the other hand, can be distinguished by their lower and stable debt-to-equity ratio. In addition to the above, bluechip businesses have a high return on equity (ROE), a high-interest coverage ratio, and a low price to revenue ratio.

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Bluechip stocks are high-quality stocks that belong to companies that are well-established, large, well-known, and have been in the market for decades. The term "blue chip stocks" is derived from the card game "poker," in which the blue betting disc or "chip" has the highest value. The term "blue chip" is used to describe the "highest-valued stock." Some of them are dividend-paying stocks with high yields. A blue-chip stock is either the market leader in its sector or one of the top three in terms of market capitalization. Because of all of these reasons, they are extremely common among investors.

List of Best Blue Chip Stocks to Consider

Company Name	Industry	Share Price as of 4th Sep (NSE)
TCS	Information Technology	Rs 3,835
HDFC BANK	Banking	Rs 1,576
Infosys	Information Technology	Rs 1,700
ITC	FMCG	Rs 210
Coal India	Mining/Minerals	Rs 146
Reliance Industries	Diversified	Rs 2,389
Larsen & Toubro	Construction and Eng	Rs 1,695
Asian Paints	Paints	Rs 3,333
Maruti Suzuki	Automobile	Rs 6,869
Avenue Supermarts	Retail Business	Rs 3,93

Tata Consultancy Services

Market Cap: Rs 14.21LCr
P/E: 41.49
Dividend Yield: 1.04%

TCS is among the latest and emerging innovations that the company is exploring. BFSI is the company's largest revenue division, accounting for roughly 31% of overall revenue, led by Retail and CPG, Communications, Media and Tech, Manufacturing, Life Sciences, and Healthcare, and Energy and Utilities under Public and Others. North America accounts for around 51% of TCS' income, with the UK and Europe ex-UK accounting for about 15%, and India accounting for just 5.7 percent.

HDFC BANK

Market Cap: Rs 8.73LCr
P/E: 26.58
Dividend Yield: 0.41%

HDFC Bank Limited, headquartered in Mumbai, Maharashtra, is an Indian banking and financial services firm. As of April 2021, HDFC Bank is India's largest private sector bank in terms of assets and market capitalization. On the Indian stock exchanges, it is the third-largest firm by market capitalization. In the last three months, brokers have upgraded their recommendation or target price. Stock with average price momentum and valuation and medium financial results. These stocks may be inexpensive, and they have piqued the interest of some investors. HDFC Bank is a Zero Promoter Pledge Organization.

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Infosys

Market Cap: Rs 7.16LCr
P/E ratio: 35.59
Dividend Yield: 1.59%

Infosys Limited is a multinational company based in India that specializes in business consulting, information technology, and outsourcing. Bengaluru, Karnataka, India, is the company's headquarters. By 2020 sales estimates, Infosys is the second-largest Indian IT company after Tata Consultancy Services, and the 602nd largest public company in the world, according to Forbes Global 2000. Stock with strong financial results and a fair to expensive valuation, but no market momentum, as technical indicators, imply. Strong cash-generating capacity from core sector - Improving Cash Flow over the past two years. ROA has been declining for the past two years due to inefficient asset usage to generate profits.

Larsen & Toubro Ltd

Market Cap: Rs 2.38LCr
P/B: 2.49
P/E: 19.14

The firm is also listed among the top five construction firms in the world. Basic and heavy engineering, construction, real estate, capital goods manufacturing, information technology, and financial services are among the company's business interests. L&T Group has 118 branches, 6 partners, 25 joint ventures, and 35 joint operations companies as of 2020. Price to Book Ratio is among the highest in the industry. Companies with a low Piotroski score have poor financials. A stock with a high analyst rating and at least a 20% upside potential.

Asian Paints

Market cap: 3.20LCr
P/B: 23.23
P/E:91.60

Asian Paints has a 50 percent market share in the organized domestic paints market. Asian Paints has a 60 percent market share in the decorative paints segment, which accounts for 70-75 percent of the Indian paint industry. The business has a decent operating margin of over 22.20 percent, which is higher than its rivals, thanks to its leadership role. For the last five years, the debt-to-equity ratio has remained constant at 0.1. Price to Book Ratio is among the highest in the industry. Companies with a high Piotroski score have sound financials. Strong cash-generating capacity from core sector.

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