In this article, we discuss the 5 best blue chip stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to the 11 Best Blue Chip Stocks To Buy Now.
5. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 61
Consecutive Years of Dividend Payouts: 59
Dividend Yield: 2.79%
Guggenheim analyst Laurent Grandet recently upgraded The Coca-Cola Company (NYSE:KO) stock to Buy from Neutral and raised the price target to $66 from $61, noting that the “portfolio rationalization” and “strong sales in emerging markets” would help The Coca-Cola Company (NYSE:KO) with gross margin benefits in the coming months. The analyst forecast that The Coca-Cola Company (NYSE:KO) would grow earnings by 12% annually through 2023.
The Coca-Cola Company (NYSE:KO) has been a favorite stock among hedge funds for the past many years. Nebraska-based firm Berkshire Hathaway is a leading shareholder in The Coca-Cola Company (NYSE:KO) with 400 million shares worth more than $20 billion.
4. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 66
Consecutive Years of Dividend Payouts: 37
Dividend Yield: 7.94%
As AT&T Inc. (NYSE:T) prepares to roll out 5G services, investors should breathe a sigh of relief as it seems that a turbulent short-term period for the stock may be nearing an end. In 2021, AT&T Inc. (NYSE:T) had undergone a massive overhaul as management took steps to create long-term value for shareholders, including sales of assets. AT&T Inc. (NYSE:T) management now expects free cash flow to be in the $20 billion range annually for the coming years. In 2021, the firm has also drastically reduced the net debt from $147 billion to around $50 billion.
Hedge funds appreciate the growth profile of AT&T Inc. (NYSE:T). 66 hedge funds in the database of Insider Monkey were long AT&T Inc. (NYSE:T) at the end of September with stakes worth $3.2 billion.
In its Q1 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“Nelson Capital stayed busy in the first quarter, making several adjustments within our core portfolio. In the communication services sector, we sold AT&T (tkr: T). Over the years, AT&T has made several poor acquisitions, especially in the content realm, leaving the company saddled with debt and unable to change directions.”
3. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 69
Consecutive Years of Dividend Payouts: 65
Dividend Yield: 2.18%
Consumer staples stocks like The Procter & Gamble Company (NYSE:PG) do not make investors rich very quickly. However, for those prepared to wait for their investment to mature, The Procter & Gamble Company (NYSE:PG) is certainly more than just a wealth preservation vehicle. The Procter & Gamble Company (NYSE:PG) has grown free cash flows over the past five years at a rate of more than 5%. The firm also appears well-positioned, according to analysts, to improve efficiency and maintain industry-leading profitability in 2022.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Cedar Rock Capital is a leading shareholder in The Procter & Gamble Company (NYSE:PG) with 7.4 million shares worth more than $1 billion.
2. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 74
Consecutive Years of Dividend Payouts: 32
Dividend Yield: 3.48%
Goldman Sachs analyst Chris Shibutani recently initiated coverage of Bristol-Myers Squibb Company (NYSE:BMY) stock with a Buy rating and a price target of $72, noting that the current share price reflected “overly pessimistic views” on the firm. The analyst highlighted the potential of Bristol-Myers Squibb Company (NYSE:BMY) with respect to new product launches and key pipeline assets.
Hedge funds appreciate the stability that Bristol-Myers Squibb Company (NYSE:BMY) offers in large portfolios. This is why 74 hedge funds in the database of Insider Monkey hold stakes worth $4.5 billion in Bristol-Myers Squibb Company (NYSE:BMY).
In its Q4 2020 investor letter, Wedgewood Partners, an asset management firm, highlighted a few stocks and Bristol-Myers Squibb Company (NYSE:BMY) was one of them. Here is what the fund said:
“Bristol-Myers Squibb recently reported accelerating sales as much of the medical services industry returned to work. The Company continues to expect double-digit earnings growth over the next few years, driven by existing drugs, in addition to a broad pipeline of new drugs and indications. While the market remains fixated on a couple of patent expirations that could occur over the next several years, we think this is well-known at this point, yet the market still undervalues a couple of key acquisitions the Company has made in the past few years, particularly Celgene, which was acquired for a song.”
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 88
Consecutive Years of Dividend Payouts: 59
Dividend Yield: 2.48%
Johnson & Johnson (NYSE:JNJ) announced late last year that it would be splitting into separate firms, one focusing on consumer health products and the other handling the pharma business. Analysts expect the separate entities to deliver more value to shareholders in the long-term since it will allow the businesses to grow on their own. Johnson & Johnson (NYSE:JNJ) expects to split within the next two years.
On January 4, Johnson & Johnson (NYSE:JNJ) declared a quarterly dividend of $1.06 per share, in line with previous. At the end of the third quarter of 2021, 88 hedge funds in the database of Insider Monkey held stakes worth $6.8 billion in Johnson & Johnson (NYSE:JNJ).
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