Dominant market positions and strong and dependable financials typically ensure the shares of blue-chip companies remain relatively steady amid market volatility. This feature makes them ideal bets for long-term investors who have relatively lower risk appetites. Given current market volatility on concerns over rising inflation, many investors are gravitating toward blue-chip stocks. This is evidenced by the T. Rowe Price Blue Chip Growth ETF’s (TCHP) 10.3% returns over the past three months versus the SPDR S&P 500 Trust ETF’s (SPY) 6% gains.

Shares of blue-chip companies are typically favored in times of market volatility. Even though the United States and some other advanced economies have brought the COVID-19 pandemic under control, several economies continue to be severely affected by the deadly virus. Furthermore, St. Louis Federal Reserve President James Bullard told CNBC on June 18 that he sees an initial interest rate increase happening in late-2022 as inflation picks up faster than anticipated. These factors could sustain market volatility in the coming quarters.

So, we think it could be wise to buy and hold shares of fundamentally-strong blue-chip companies Alphabet Inc. (GOOGL), Johnson & Johnson (JNJ), Caterpillar Inc. (CAT), and Colgate-Palmolive Company (CL). They have the potential to deliver steady returns over the long run based on their continuing product and business innovations.

Alphabet Inc. (GOOGL)

GOOGL’s Google Services products and platforms include Chrome, Gmail, Google Maps, Search, and YouTube. It’s Google Cloud segment offers infrastructure and data analytics platforms, collaboration tools, and other services to  enterprise customers.

GOOGL’s $55.31 billion in revenues for its fiscal first quarter, ended March 31, 2021, represents a 34.4% year-over-year rise. The company’s net income increased 162.3% year-over-year to $17.93 billion. GOOGL’s EPS came in at $26.29, up 166.4% year-over-year.

For the current quarter, ending June 30, 2021, analysts expect GOOGL’s EPS and revenue to be  $19.21 and $56.02 billion, respectively, which represents an 89.6% and 46.3% year-over-year increase. GOOGL surpassed  consensus EPS estimates in each of the trailing four quarters.

MSC Industrial Supply Co. partnered with Google Cloud on June 14, 2021, to drive its digital transformation and transition to a cloud-first company. MSC Industrial deployed a new data cloud that leverages Google Cloud products like BigQuery, which significantly reduces the time needed to manage and analyze data. MSC Industrial’s Senior Vice President and Chief Information Officer Charlie Bonomo said, “We are delighted to work with Google Cloud as one of our transformation partners in building a new foundation to support MSC’s growth and success for years to come.” The stock has gained 67.5% over the past year to close Friday’s trading session at $2,402.22.

It’s no surprise that GOOGL has an overall B rating, which equates to Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

The stock has an A grade for Sentiment, and a B grade for Quality. Click here to see GOOGL’s ratings for Value, Stability, Momentum, and Growth as well.

GOOGL is ranked #2 of 71 stocks in the Internet industry.

Johnson & Johnson (JNJ)

One of the top players in the healthcare space, JNJ has been operating for more than a century. It researches and develops, manufactures and sells a range of products in the healthcare field. The company operates through three segments: consumer, pharmaceutical, and medical devices.

For the fiscal first quarter, ended March 31, 2021, JNJ’s sales came in at $22.32 billion, up 7.9% from the prior-year quarter. The company’s non-GAAP net income was $6.92 billion, which represents a 12.5% increase from the same period last year. Its non-GAAP EPS increased 12.6% year-over-year to $2.59.

JNJ’s EPS is expected to increase 35.3% year-over-year to $2.26 for the current quarter ending June 30, 2021. It surpassed the Street’s EPS estimates in each  of the trailing four quarters. The company’s revenue is expected to increase 26% year-over-year to $22.19 billion in the current quarter.

On June 15, 2021, the U.S. Food and Drug Administration authorized approximately 14 million more doses of JNJ’s COVID-19 vaccine to be manufactured at its Baltimore factory. All the JNJ doses authorized from the plant to date are expected to be exported to other countries. The stock has rallied nearly 13% over the past year to close Friday’s trading session at $161.98.

JNJ’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. It has an A Grade for Stability, and a B grade for Growth, Value, Sentiment, and Quality. In addition  to these ratings, one can see JNJ’s rating for Momentum here.

JNJ is ranked #1 of 227 stocks in the Medical-Pharmaceuticals industry.

Click here to checkout our Healthcare Sector Report for 2021

Caterpillar Inc. (CAT)

CAT manufactures construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, among other products. It operates through several segments, which include construction industries, resource industries, energy and transportation, and financial products.

The company’s total revenue for the first quarter ended March 31, 2021, came in at $11.89 billion, which represents an 11.8% rise from the prior-year quarter. CAT’s operating profit increased 29.2% year-over-year to $1.81 billion. The company’s net income increased 40.1% from the same period last year to $1.53 billion. Also, its adjusted EPS came in at $2.87, up 73.9% from the prior-year quarter.

Analysts expect CAT’s EPS and revenue to increase 131.1% and 25.9%, respectively, year-over-year to $2.38 and $12.59 billion for the current quarter ending June 30, 2021. It surpassed the Street EPS estimates in each of the trailing four quarters.

On April 26, 2021, CAT and Certarus Ltd. signed a memorandum of understanding (MOU) to explore opportunities to leverage each company’s  strengths to bring lower carbon energy solutions to their combined customer bases. This is expected to help CAT deliver comprehensive customer solutions. The stock has rallied 63.7% over the past year to close Friday’s trading session at $208.86.

CAT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. It also has a B grade for Growth. Click here to see the additional POWR Ratings for CAT (Sentiment, Momentum, Value, Quality, and Stability).

CAT is ranked #31 of 84 stocks in the A-rated Industrial-Machinery industry.

Click here to check out our Industrial Sector Report for 2021

Colgate-Palmolive Company (CL)

CL is a consumer products company known worldwide for its oral, personal and home care products that  include toothpaste, toothbrushes, and mouthwash. It also offers pet nutrition products for everyday nutritional needs, and a range of therapeutic products to manage disease conditions in dogs and cats.

CL’s net sales for the first quarter, ended March 31, 2021, was  $4.34 billion, which represents a 6% rise from the prior-year quarter. The company’s gross profit increased 7% from the same period last year to $2.64 billion. Its operating income increased 5.5% from the same period last year to $1 billion. CL’s non-GAAP EPS increased 6.7% year-over-year to $0.80.

Analysts expect CL’ EPS to increase 7.2% in its fiscal year 2021 to $3.28. It surpassed consensus EPS estimates in each of the trailing four quarters. The company’s revenue is expected to be  $4.24 billion for the current quarter, ending June 30, 2021, which represents an 8.9% year-over-year rise.

CL plans to send the first-ever private-sector oral care experiment to the International Space Station (ISS) under the sponsorship of the ISS U.S. National Laboratory. This will be  the first of several research projects in space that CL has planned in partnership with the ISS National Lab. The stock has advanced  10.1% over the past year to close Friday’s trading session at $81.20.

It’s no surprise that CL has an overall B rating, which equates to Buy in our POWR Ratings system. The stock has an A grade for Quality, and a B grade for Stability. Click here to see CL’s ratings for Sentiment, Value, Growth, and Momentum as well.

CL is ranked #8 of 71 stocks in the Consumer Goods industry.

GOOGL shares were trading at $2,402.21 per share on Monday morning, down $0.01 (0.00%). Year-to-date, GOOGL has gained 37.06%, versus a 11.64% rise in the benchmark S&P 500 index during the same period.

About the Author: Ananyo Guha Niyogi

Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand. More...

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