Resilient Blue-Chip Stocks Are Attractive in the Current Market Environment
What are some of the typical qualities that make a company resilient? It’s usually a business that can generate profits in almost any economic environment. With a strong brand name and products or services that always see steady demand, investors can count on these types of companies through thick and thin. Blue-chip stocks are a good example, as they are companies with strong balance sheets, stable cash flows, and business models that can stand the test of time.
Adding resilient blue-chip stocks to your portfolio makes a lot of sense at this time given the recent market volatility. With so many puzzling factors at play in the market and in the economy, targeting companies that offer reliability might be one of the smartest moves to make at the moment.
Let’s take a look at 3 resilient blue-chip stocks to buy now.
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If you’re interested in a blue-chip tech company that has consistently proven it can adapt to new trends over the years, Microsoft certainly fits the bill. The software company pivoted towards cloud computing at the perfect time, and now Microsoft Azure is providing entirely new growth prospects for long-term shareholders. Products like Windows, Microsoft Office, Office 365, Sharepoint, and more are some of the most popular business software options in the world, which means the company consistently generates cash flows from them that it can reinvest in high-growth areas of the business like Azure.
Microsoft’s revenue grew by 22% year-over-year in Q2 to reach $45.3 billion, and the company continues to reward shareholders with consistent earnings growth. There’s also a lot to like about the company’s XBOX Series X gaming console, which could deliver a nice earnings boost for Microsoft as supply chain issues start to diminish. The bottom line here is that Microsoft has a rock-solid net cash position, plenty of growth upside, and a history of creating innovative new products, making it one of the best blue-chip stocks on the market.
Even with Pfizer trading around its all-time highs, this blue-chip company could end up being a bargain at current levels. It’s a research-based global biopharmaceutical company that offers investors a nice balance of a strong existing drug portfolio and an intriguing pipeline of new drugs that could become future cash cows. With best-selling drugs like Prevnar, Ibrance, and Eliquis, investors can count on stable earnings quarter after quarter here. Worldwide prescription drug sales are expected to grow at a compound annual growth rate of 7.4% from 2020 to 2026, which tells us that there is plenty of money to be made for a company like Pfizer.
Investors are probably already aware of the company’s COVID-19 vaccine, which helped Pfizer deliver a revenue jump of 134% year-over-year to $24.1 billion in Q3. The company’s antiviral COVID treatment pills could be another strong growth driver, and FDA approval of the treatment could send shares soaring in the coming weeks. Finally, the company’s 3.05% dividend yield is very attractive, and Pfizer also has a history of share buyback programs that make it a great choice for long-term investors.
Companies that are involved in the health care industry can certainly offer reliability, especially in the wake of the global pandemic. McKesson is a solid pick as its North America’s largest pharmaceutical distributor, which means the company plays a vital role in keeping our country healthy. Along with pharmaceuticals, McKesson provides health information technology, medical supplies, and care management tools, which means it serves a broad range of health care customers. Perhaps what’s most attractive here is the fact that McKesson has a truly dominant market position, as it’s one of three companies that operate as a pharmaceutical wholesale and distribution oligarchy.
The company reported total revenues of $66.6 billion in Q2, up 9% year-over-year, and increased its FY 22 outlook, which is another strong reason to consider adding shares. McKesson is also playing a big part in the fight against COVID-19 and has seen strong demand for products like COVID-19 tests, vaccines, and more in recent quarters. Finally, the fact that McKesson is selling part of its European business is another plus to consider, as it will allow the company to focus on higher-growth areas of the business going forward.