If you’re searching for cheap blue-chip stocks to buy, look no further. Blue-chip stocks continue to lag the performance of growth stocks. Although it is currently at an all-time high, the Dow Jones Industrial Average, comprised of 30 blue-chip names, is up only 4% this year compared to an 11% gain in the technology-laden Nasdaq index. While some blue-chip stocks are performing strongly, many well-known companies are seeing their share price slide lower and badly lagging the market’s overall performance. The declines, while notable, should be seen as a buying opportunity in many instances.
Some of the stocks that are down this year are struggling with short-term issues that are beyond the company’s control. In time, the situation should resolve itself and the share price should move higher. It’s also good to have blue-chip stocks in one’s portfolio as these securities can be defensive in times when the market drops or the economy falters. Plus, stalwart blue-chip stocks are more likely to pay dividends than fast-growing tech stocks and start-up companies. Buying when prices are down and riding them higher should be the goal of every investor.
Here are seven blue-chip stocks to buy at or near their 52-week low in March.
Blue-Chip Stocks to Buy: McDonald’s (MCD)
The Golden Arches is as blue-chip as stocks come. The hamburger and restaurant chain has been a reliable performer for decades, trades at a reasonable 24 times future earnings estimates, and pays a quarterly dividend that yields a strong 2.40%. McDonald’s (NYSE:MCD) has raised its dividend payment every year since 1976. Yet MCD stock has struggled in recent years. Year-to-date (YTD), the share price is down 6%. Over five years, it is up only 45%.
The softness in MCD stock is curious given that the company is in the midst of an aggressive growth strategy, with plans to open 9,000 new restaurant locations and add 100 million members to its loyalty rewards program by 2027. McDonald’s also continues to diversify its menu, recently announcing that it will sell Krispy Kreme (NASDAQ:DNUT) doughnuts at its more than 13,500 restaurants across America.
But while news of the Krispy Kreme partnership sent DNUT stock up 30% in one day, it barely moved the needle on MCD stock. Time to buy the dip.
Apple (AAPL)
Arguably the best deal in the market right now is the stock of Apple (NASDAQ:AAPL). The consumer electronics giant’s share price is down nearly 10% on the year and not far from its 52-week low. Slowing sales in China and an antirust lawsuit filed against it by the U.S. Justice Department have pushed AAPL stock down since the start of the year. Smart investors will treat the decline as a buying opportunity.
Despite the headwinds it faces, Apple continues to keep its business chugging along. In recent weeks, the company announced that it plans to start selling its new Vision Pro augmented reality headset in China. Also, Apple is reportedly in talks to license Gemini artificial intelligence (AI) technology from Google parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and integrate it into future iPhones.
The addition of AI sets up iPhone for potentially its biggest upgrade in years and could give the smartphone a whole new competitive advantage.
Blue-Chip Stocks to Buy: Lululemon Athletica (LULU)
A huge buy-the-dip opportunity has opened up with the stock of Lululemon Athletica (NASDAQ:LULU) after the company’s latest earnings print. LULU stock fell more than 10% after the retailer issued weak forward guidance and said that its North American sales are slowing. The post-earnings decline has dragged the share price 23% lower year to date. However, this popular athletic apparel maker’s stock is not likely to be down for long.
While it is true that Lululemon’s North American sales have decelerated, the company is killing it with its international expansion. For the final quarter of 2023, the company’s international sales grew 54% year-over-year, with sales in the key market of China increasing 78%. Lululemon’s total sales, North America included, were up 16% from a year ago. The strong international growth and overall growth are not reflected in LULU stock.
Lululemon also continues to expand beyond its traditional focus on women consumers, moving into men’s wear and launching in February a new line of men’s sneakers. Sneakers and casual footwear, both men’s and women’s, represent a huge new market for Lululemon Athletica.
Adobe (ADBE)
Can software company Adobe (NASDAQ:ADBE) survive an existential threat posed by AI? That’s the question facing the company as its share price has fallen 13% so far in 2024. ADBE stock began to sink after privately held OpenAI launched a new text-to-video generator that competes against its own creative software products that include Photoshop and Illustrator. The situation hasn’t been helped by Adobe’s latest earnings print.
Adobe offered up forward guidance that disappointed analysts on Wall Street. The company also got dinged for canceling its planned $20 billion acquisition of design software start-up Figma and had to pay a $1 billion termination fee. The guidance and Figma fee overshadowed the fact that Adobe reported strong financial results that beat analyst forecasts. The company also announced a $25 billion stock buyback program.
Adobe is not taking the threat from OpenAI and other competitors lying down. Over the last year, the company has added AI features to many of its software products, including an image editing tool called Firefly.
Blue-Chip Stocks to Buy: Hershey (HSY)
We’re heading into the Easter long weekend, and one would assume that this would be a great time to be a shareholder of Hershey Co. (NYSE:HSY). After all, Americans spent $3.3 billion on Easter chocolate and candy in 2023, up 8.2% from the previous year. Sadly though, there is not much reason to celebrate the Easter Bunny’s arrival this year. Not with cocoa prices trading at an all-time high and above $10,000 per metric ton for the first time ever.
Record prices for cocoa is a huge problem for Hershey, which spends more than $1 billion a year on the active ingredient in chocolate. Cocoa prices have risen 40% this year due to global supply constraints. The problem lies in the Ivory Coast of Africa, which is the biggest cocoa producer in the world. The region has been hit by both flooding and hotter-than-usual temperatures that are causing drought conditions and diminishing crop yields.
The flooding and excessive heat has also led to an outbreak of cacao swollen shoot virus that is harming the cocoa crop. The world’s supply of cocoa is now on course for a third straight annual supply deficit. The worsening problem has HSY stock down 24% over the last 12 months and not far from its 52-week low. But long-term, Hershey remains a solid investment. Here’s hoping cocoa prices move lower before Halloween.
Walgreens Boots Alliance (WBA)
We’re barely through one quarter of the year, and already 2024 has been tough on pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA). In early January, the company cut its quarterly dividend payment to shareholders by nearly 50%, sending WBA stock plunging. Then, the company was kicked out of the blue-chip Dow Jones Industrial Average and replaced by Amazon (NASDAQ:AMZN), further hurting its share price.
The net effect is that WBA stock is down 23% on the year. That brings its 12-month decline to nearly 40%. While things look dark for Walgreens, there are some faint glimmers of light starting to shine on the company and its stock. The company has a new CEO named Tim Wentworth who took the helm in October of last year. He has already undertaken a turnaround plan that included cutting the dividend to strengthen the company’s balance sheet and preserve cash.
Additionally, Walgreens’ most recent earnings beat Wall Street forecasts on both the top and bottom lines. The strong print was a reversal for Walgreens, which had missed earnings estimates in the two previous quarters. It will take time, but WBA stock could come back.
Tesla (TSLA)
How low can Tesla (NASDAQ:TSLA) stock go? A lot lower according to analysts who cover the company. Down nearly 30% on the year, TSLA stock is currently the worst performer in the S&P 500 index. However, each day seems to bring a new analyst downgrade for the stock. Most recently, analysts at Bernstein lowered their price target on Tesla’s shares to $120 from $150 and reiterated a “sell” equivalent rating.
Bernstein, and others, are worried about slumping global demand for Tesla’s electric vehicles, especially in China. They’re also seeing weak demand for Tesla’s Model 3 electric vehicle stateside. The piling on has hurt investor sentiment related to TSLA stock and pushed the share price lower. Approaching a 52-week low, and with its market capitalization sliding to $500 billion, its fair to wonder, what’s next for Tesla?
Despite the glum situation, there’s every reason for investors to buy-the-dip in TSLA stock. The company is taking steps to right the ship, including raising prices and offering a free trial of its full self-driving feature. Also, the stock has fallen sharply in the past and always comes roaring back. This time is likely to be no different.
On the date of publication, Joel Baglole held long positions in AAPL and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
