Blue Chip Shares

Blue chips or blue chip shares are stock from well established, great profit earning  and dividend distributing corporations. Normally, these corporations are paying dividend regularly and can assure long term growth for the companies.

Big shareholders and long term investors like to hold these stocks as it is safe and managed by reputable management. The following are the common features for blue chip stock :

  • The stocks are widely owned by big shareholders.
  • The corporation had paid at least fifteen percent of dividend averagely for the past 5 years or have consistent dividend payout ratio and dividend policy.
  • The stock price has increased gradually every year.
  • The corporation's earning and profits have been growing  every year in a consistent basis. The growth rate should be better than the industry average.

Besides, some blue chips companies will even  have consistent projected growth of sales and revenue in plan and distribute the dividend based on their dividend policy that had been established previously.

The example of blue chips in global are companies such as Apple Inc., Google inc., Exxon Mobil Corporation and etc.