Blue Chip Stock

Blue Chip Stock

Stock in a well-known and highly respected publicly-traded company. Blue chip companies are usually financially sound and are thought to be relatively low-risk investments. They tend to be less volatile than other companies and to provide solid growth to portfolios. Examples in the United States include General Electric and Coca-Cola. Indices such as the Dow Jones Industrial Average tracks blue chip stocks.

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Blue chip stock. Blue chip stock is the common stock of a large, well-regarded US company. The companies in that informal category are collectively known as blue chip companies. Blue chips have a long-established record of earning profits and paying dividends regardless of the economic climate.

They take their name from the most valuable poker chips. In the United Kingdom, in contrast, comparable firms are called alpha companies.