Blue-Chip Stocks


BLUE-CHIP STOCKS.

1.Blue-chip stock stability and benefits.

The term “Blue-chip” is originated from the game of poker, which holds the highest value in this game. Therefore, “Blue-chip Stocks” are stocks of well-known and well-established organizations and numerous of advantages of this kind of stocks are observed in global stock market.

Most of the investors know that “Blue-chip Stocks” have stable earnings and during economic downturn, they can choose these “safe-havens” because of their secure nature. Blue-chip companies offer security during the period of slowed growth due to their intelligent management teams and ability to generate stable profits. If investors face with “bear market”, there is no need for any concern about their investments in blue-chips, generally, they recover.


2.World-wide examples of this kind of organizations for 2019.

In this section well-known examples of this kind of organizations will be listed:

Johnson & Johnson (ticker: JNJ)
Health care and consumer giant Johnson & Johnson, one of the most successful stocks on Wall Street, so JNJ’s beta is just 0.62 which is lower than 1(less vulnerable) and that is what all investors want. Stability is the name of the game. JNJ also has more than a dozen drugs in areas ranging from oncology to immunology in Phase 3 clinical trials, making health care the powerhouse of its future growth potential.

Phillip Morris (PM)
If you want a loyal company pays you although you sit passively, even in any tough economical situations, Phillip Morris, international tobacco company which is owner of well-known products like Marlboro and Parliament, is definitely your option and this company is an opportunity for conservative income investors, because they can remain confident, consumers will consume smoking with brand loyalty and tastes regardless economic circumstances. Last year price of stock was 80$ and this should also reassure investors.

Comments

Post a Comment

Popular posts from this blog

LIFO versus FIFO

Image
LIFO versus FIFO LIFO method The last in first out (LIFO) method first matches against revenue the cost of the last goods purchased. It a periodic inventory system is used, then it would be assumed that the cost of the total quantity sold or issued during the month have come from the most recent purchases. The ending inventory would be priced by using the total units as a basis of computation and disregarding the exact dates involved. Example: Assume that a company had the following transactions in the first month of operations. Date Purchases Sold or Issued Balance March 2 2,000 @ $4.00 2,000 units March 15 6,000 @ $4.40 8,000 units March 19 4,000 units 4,000 units March 30 2,000 @ $4.75 6,000 units Periodic Inventory System: Assume that the cost of the 4,000 units withdrawn on absorbed the 2,000 units purchased on March 30 and 2,000 units of the 6,000 units purchased on March 15. The inventory and related cost of goods sold would then be computed as shown be...
Read more

What is the Substance over form concept?

Image
S ubstance over form   It is an accounting principle  used "to ensure that financial statements  give a complete, relevant, and accurate picture of transactions and events". If an entity practices the 'substance over form' concept, then the financial statements will show the overall financial reality of the entity (economic substance ), rather than the legal form of transactions (form). In accounting for business transactions and other events, the measurement and reporting is for the economic impact of an event, instead of its legal form. Substance over form is critical for reliable financial reporting. It is particularly relevant in cases of  r evenue recognition , sale and purchase agreements, etc. The key point of the concept is that a transaction should not be recorded in such a manner as to hide the true intent of the transaction, which would mislead the readers of a company's financial statements. There is widespread use of substance over form...
Read more

Accrual

Image
A ccruals Accruals are earned revenues and incurred expenses that have an overall impact on an income statement. They also affect the balance sheet, which represents liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liabilities and future interest expenses. The use of accrual accounts has greatly increased the amount of information on accounting statements. Before the use of accruals, accountants only recorded cash transactions on these statements. But cash transactions don't give information about other important business activities, such as revenue based on credit and future liabilities. By recording accruals, a company can measure what it owes in the short-term and also what cash revenue it expects to receive. It also allows a company to show assets that do not have a cash value, such as goodwill . Using the accrual method , an accountant...
Read more