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4 Blue Chip Stocks That Should Belong in Your Portfolio

For long-term investors, blue chip stocks are rarely out of favor. While there is an air of positivity in the stock markets currently because the economy is expected to recover quickly, short-term volatility cannot be ruled out. In such a scenario, blue chip stocks are the safest bets. So, Walmart (WMT), Johnson & Johnson (JNJ), 3M Company (MMM), and Lockheed Martin Corporation (LMT) are four stocks that we think could ensure stable returns for one’s portfolio.

The stock markets ended the first quarter of 2021 on a  positive note. Technology stocks are back in action and investors are optimistic ahead of the launch of President Biden’s proposed infrastructure spending. Positivity over a strong economic rebound is likely to define underlying market  sentiment over the next few weeks.

The last few weeks have been a roller-coaster ride for the markets and occasional volatility in the coming days cannot be ruled out. As investor sentiment continues to oscillate, we think it best to protect one’s  portfolio with high-performing blue-chip stocks, such as Walmart Inc. (WMT), Johnson & Johnson (JNJ), 3M Company (MMM), and Lockheed Martin Corporation (LMT). 

If one’s intent is to participate in market gains without exposing oneself to too much risk, these blue chips are the best bets. These  stocks  have weathered several market cycles and remained resilient.

Walmart Inc. (WMT)

WMT is a leading operator of retail, wholesale, and other units globally. Walmart U.S., Walmart International, and Sam's Club are the three segments through which the company operates.

WMT posted a 7.3% year-over-year increase in its revenue to hit $152.1 billion for the fourth quarter ended January 31, 2021. During the quarter, the company’s comp sales rose8.6% and Walmart’s U.S. eCommerce sales climbed 69%. WMT further stated that its FY22 capital investments are  likely to be $14 billion, to build a supply chain and automation. Its loss per share for the quarter was $0.74 compared to $1.46 posted in the same period last year.

Analysts expect WMT’s revenue for the quarter ending March 31, 2021 to be $131.9 billion, representing a 0.7% year-over-year decline. Its EPS is expected to grow at the rate of 6.3% per annum over the next five years.

WMT climbed 19.6% over the year to close yesterday’s trading session at $135.83. Over the past six months, the stock has declined 2.9%.

It’s no surprise that WMT has an overall B rating which equates to Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

WMT has an A  Stability rating, along with Value and Quality ratings of B. In the A-rated Grocery/Big Box Retailers  industry, it is ranked #7 of 40 stocks.

In addition to the POWR Ratings grades we’ve  just highlighted,  one  can see the WMT ratings for Growth, Momentum, and Sentiment.

Click here to checkout our Retail Industry Report for 2021

 Johnson & Johnson (JNJ)

JNJ is involved in the research, development, manufacture, and sales of a range of products in the healthcare field worldwide. The company operates through three segments, namely Consumer Health, Pharmaceutical, and Medical Devices.

During the fourth quarter ended December 31, 2020, JNJ’s revenue rose 8.3% year-over-year to $22.4 billion, driven by its  Pharmaceutical segment and increased sales in STELARA, DARZALEX, ERLEADA, and IMBRUVICA. Its EPS for the quarter climbed to $0.65 from $1.50 posted in the prior-year period.

Analysts expect JNJ’s revenue for the quarter ending March 31, 2021 to be $22 billion, representing a 6.3% year-over-year rise. Its EPS is expected to grow at the rate of 5.6% per annum over the next five years.

JNJ ended yesterday's trading session at $164.35, gaining 25.3% over the past year. During the past six months, the stock has gained 10.4%.

Due to its bright prospects, JNJ has an overall B rating, which translates to a Buy. JNJ has a Stability rating of A, and Sentiment, Quality, and Value ratings of B. In the 236-stock Medical - Pharmaceuticals industry, it is ranked #11.

Click here to see the additional POWR Ratings for JNJ (Growth, and Momentum).

Click here to checkout our Healthcare Sector Report for 2021

3M Company (MMM)

MMM develops, manufactures, and sells various products through its segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. The company has a strategic collaboration with Merry Maids in the residential cleaning sector.

MMM’s sales for the fourth quarter ended December 31, 2020 climbed 5.8% year-over-year to $8.6 billion, boosted by a 12.7% growth in its  Safety and Industrial segment. Its EPS for the quarter climbed to $2.38 from $1.66 posted in the prior year period.

Analysts expect MMM’s revenue for the quarter ending March 31, 2021, to be $8.5 billion, representing a 4.9% year-over-year increase. Its EPS is expected to grow at the rate of 7.2% per annum over the next five years.

Over the past year, MMM has rallied 41.2% to end yesterday’s trading session at $192.68. During the past six months, the stock climbed 20.3% higher.

MMM’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, which equates to Neutral in our POWR Ratings system. MMM has a Quality grade of A, and a Stability grade of B. In the A-rated, 87-stock Industrial - Machinery industry, it is ranked #52.

To see additional POWR Ratings for Growth, Value, Momentum, and Sentiment for MMM, Click here.

Lockheed Martin Corporation (LMT)

LMT is a leading security and aerospace company that designs, develops, manufactures and integrates  and integrates technology systems, products, and services globally.

LMT recently received a $1.12 billion contract to produce the  U.S. Army’s Lot 16 Guided Multiple Launch Rocket System (GMLRS) rockets and associated equipment. Manufacturing will be handled  at LMT’s facilities in Camden, Arkansas, Dallas and Lufkin, Texas, and Ocala, Florida, and will be completed by September 2023.

During the fourth quarter ended December 31, 2020, LMT’s net sales climbed 6.9% year-over-year to $17 billion. Its EPS for the quarter climbed to $6.38 from $5.29 posted in the same period last year. LMT ended the quarter with $1.8 billion cash from operations.

Analysts expect LMT’s revenue for the quarter ending March 31, 2021 to be $8.5 billion, representing a 4.9% year-over-year rise. Its EPS for the quarter is expected to grow at 3.8% to $6.31.

LMT ended yesterday's trading session at $369.50, rising 9% over the past year. During the past six months, the stock has climbed 8%.

Due to its bright prospects, LMT has an overall B rating, which equates to Buy in our POWR Ratings system. LMT also has a Value, Stability, Quality ratings of B. In the 67-stock Air/Defense Services industry, it is ranked #10.

Click here to see the additional POWR Ratings for LMT (Growth, Sentiment, and Momentum).

Want More Great Investing Ideas?

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WMT shares were trading at $135.62 per share on Thursday afternoon, down $0.21 (-0.15%). Year-to-date, WMT has declined -5.52%, versus a 7.50% rise in the benchmark S&P 500 index during the same period.



About the Author: Namrata Sen Chanda

Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education.

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