Blue-chip stocks offer investors a safe haven in a turbulent market. Blue-chip stocks tend to be those of companies that have stable finances, low levels of debt and strong brands. They also tend to pay their stockholders reliable dividends and have the free cash flow to buyback their own stock.
This is typically the opposite of high-flying start-up companies that are riskier and more likely to crash and burn when the stock market takes a downturn. Growth stocks can be great to own when the bulls are running on Wall Street. However, when a bear market takes hold, reliable blue-chip stocks offer a bigger margin of safety and more predictably to investors. With both the Nasdaq and Standards and Practices (S&P) 500 indexes now in a correction (down 10% from their highs this year), now is a good time for investors to seek out blue-chip names. Here are the three best blue-chip stocks to buy in November.
Intel (INTC)
Shares of Intel (NASDAQ:INTC) jumped 9% higher after the microchip and semiconductor company issued third-quarter financial results that surpassed Wall Street forecasts. Intel’s profit was particularly strong, with the company announcing earnings per share (EPS) of 41 cents compared to the 22 cents that had been expected among professional analysts. Revenue in Q3 also came out ahead at $14.16 billion versus $13.53 billion that was expected. Intel’s gross margin for the quarter was 45.8%, which was flat from a year earlier.
While Intel’s revenue for Q3 was 8% lower than a year ago, management said on an earnings call that they expect positive revenue growth in the current fourth quarter of the year. They also reiterated plans to cut costs by $3 billion this year. In Q3, the company’s operating expenses declined 15% from a year ago. Also, it looks like Intel’s efforts to pivot to becoming a foundry business is starting to gain traction. While the chip-manufacturing business remains a small part of Intel’s overall operations, recording just $311 million in revenue during Q3, its sales grew nearly 300% from a year earlier.
The Q3 print did a lot to reignite confidence in Intel and the company’s forward direction. INTC stock is now up 33% on the year.
Procter & Gamble (PG)
Consumer goods company Procter & Gamble (NYSE:PG) is about as reliable a blue-chip stock as investors can hope to find. The maker of Tide laundry detergent and Gillette razor blades consistently issues strong financial results that beat Wall Street estimations. The company’s recent Q3 print was no exception. Procter & Gamble reported EPS of $1.83 versus $1.72 that had been expected. Revenue in the July through September quarter totaled $21.87 billion compared to $21.58 billion that was anticipated. Revenue increased 6% year-over-year.
However, the strong Q3 results came despite the company’s overall sales volumes continuing to decline as consumers seek cheaper generic alternatives to many of its products as inflation remains an issue. Regardless, the company, whose name brand products also include Crest toothpaste and Pampers diapers, said that its Q3 sales got a boost from a 7% price increase. Procter & Gamble is forecasting that its full-year revenue will grow 2% to 4%, and it still expects EPS of $6.25 to $6.43 for the entire year. Analysts had full-year EPS of $6.39 penciled in for the company.
PG stock is down a slight 3% year to date. Buy the dip in this blue-chip stock.
Charles Schwab (SCHW)
While investment management firm Charles Schwab (NYSE:SCHW) issued mixed financial results for this year’s third quarter, it is hard to ignore the current valuation of this stock. Down nearly 40% on the year, SCHW stock is currently trading at 16 times future earnings. The company’s shares haven’t been this cheap since the early days of the Covid-19 pandemic in 2020. The stock also pays a quarterly dividend of 25 cents a share, giving it a healthy yield of 2%. Much of the decline in Charles Schwab’s share price this year can be attributed to the general turmoil that has gripped the banking and finance sectors.
In terms of its Q3 earnings, Charles Schwab reported EPS of 77 cents, which was better than the consensus expectation of 75 cents. Revenue for the quarter totaled $4.61 billion versus analyst estimates of $4.65 billion. The revenue in Q3 was down 16% from a year ago. Revenue from trading activities declined 17% to $768 million, missing analysts’ expectations for $804 million. And new brokerage accounts in the quarter were flat from a year ago. Charles Schwab, which remains the largest publicly traded United States brokerage firm, said it continues to be challenged by high inflation and elevated interest rates.
Investors with a long time horizon shouldn’t worry about Charles Schwab. In time, SCHW stock will recover. Investors should buy now or miss the move higher.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
