As we enter a new year, investors seek blue-chip stocks that will outperform the market. However, identifying these stocks won’t be an easy task at hand. After the 2022 bear market, large-cap technology stocks led the market rebound in 2023. Therefore, buying them at these levels may not be the wisest decision.
There exists an array of blue-chip stocks that have largely flown under the radar in 2023. This will give them much more room to outperform the market through 2030 as interest rates come down. These companies are not only capable of significant outperformance, but also able to weather the market’s uncertainties.
Now, let’s discuss the three best Blue-Chip Stocks set to outperform!
Deere & Company (DE)
Deere & Company (NYSE:DE) is a blue-chip stock that is quietly flying under the radar. Over the last 3 years, the company has seen robust revenue and EPS growth.
Deere & Company stock is currently down 9% year-to-date (YTD), despite continuing to report strong year-over-year (YoY) growth metrics. During the 2022 fiscal year, the company remained extremely resilient despite supply chain constraints impacting the infrastructure equipment market. However, 2023 proved to be yet another resilient year and the prospect of interest rate cuts could be a key catalyst in 2024.
For the 2023 fiscal year, Deere’s revenue swelled 16.5% YoY to $61.25 billion. Net income was $10.16 billion, or $34.63 per share. This was above the company’s revenue and EPS estimates, after they raised estimates a second time in 2023. It is clear that Deere continues to execute on all cylinders as net income and revenue rose more than 40% for FY23. With a forward P/E of 13.64, DE stock appears to be undervalued and set to gain steam ahead of 2024.
Oracle (ORCL)
Oracle (NYSE:ORCL) stock is hitting a key inflection point as generative AI strengthens the company’s long term outlook. Despite missing on revenue in their latest quarterly results, investors cannot ignore Oracle’s long term FCF potential.
2023 has proven to be a transformative year for companies in the cloud services business. The cloud infrastructure market has seen continued momentum over the last decade and generative AI makes the story much different. Artificial intelligence is here to stay, and those at the forefront of this technological advancement will be the sole beneficiaries.
Oracle’s cloud revenue has maintained sequential growth largely driven by their generative AI strategy. CEO Safra Katz, said that ‘’Our cloud businesses are at nearly a $20 billion run rate, and cloud services are growing at an unprecedented rate.’’ AI cloud deployment is rising at such a rapid pace that cloud companies cannot keep up with the amount of data that needs to be stored. With the stock falling after their recent Q2 FY24, now is a good time to scoop up shares for the long term.
McDonald’s Corp (MCD)
McDonald’s Corp (NYSE:MCD) is an American multinational food services company headquartered in Chicago, Illinois. They’re one of the most iconic brands in the world, serving more than 69 million customers per day.
Over the last several decades, McDonald’s Corporation has delivered above average shareholder returns. The company has survived every major financial crisis and its strong brand recognition gives it a unique competitive advantage. If you’re reading this article, there is a strong likelihood that you’ve enjoyed a meal from McDonald’s. However, this is not just what makes this company special.
More recently, McDonald’s has eyed a large global expansion plan that has investors excited. The company has ambitions to reach 50,000 restaurants by 2027. That is an additional 8,802 more restaurants than the 41,198 restaurants for the quarter that ended in September. They have also beefed up their loyalty membership count from 150 million users to 250 million. These two key catalysts are likely to drive McDonald’s top line revenue growth over the next decade as it has stagnated in recent years.
On the date of publication, Terel Miles 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.
