The term "Blue Chip" has a few different definitions. The most common usage refers to companies that are among the top of their industry. These companies tend to be well-established and financially sound. They are not always leaders in their industries, but they are companies which have proven themselves to be among the most consistently profitable and stable in their fields. The term is also used in casinos to refer to the highest value chips, which are worth the most money.Blue chip companies are usually well-established corporations that have typically been around for decades. They are usually household names, such as Johnson & Johnson (NYSE: JNJ), Coca-Cola Co. (NYSE: KO), Procter & Gamble Co. (NYSE: PG), and AT&T Inc. (NYSE: T). These companies were once pioneers in their industries, and they have consistently remained profitable for years. These are the sort of companies that would be described as "rock solid" investments, because they rarely if ever report a loss or restate earnings. The stock prices of blue chip companies are often very expensive, and they usually don't provide the same returns as a company that is growing rapidly and experiencing significant earnings increases year-over-year. However, blue chip companies can be excellent choices for investors who want to invest in high-quality companies with steady growth and stable earnings.Blue chip companies are often viewed as being in the upper echelons of their respective industries. They are generally considered to be the largest and most successful businesses in their fields. For example, a company like Coca-Cola, which was founded in 1886, is often considered to be a blue chip company in the beverage industry. It is considered one of the most well-established players in the industry, and it has remained profitable for more than 120 years. Investors have come to expect Coca-Cola to be one of the highest-quality performers in the beverage industry, and it is one of the most widely held stocks.
For many investors, blue chip companies have a positive connotation. They are prestigious, respected and well-known companies. Many blue chip stocks are considered to be "riskless" investments because they are usually leaders in their industries and have had many years of strong growth.
