Investors should have a wide range of companies in multiple sectors within their investment portfolio. But the backbone of any resilient portfolio that can withstand a bear market and soar during a bull market are blue-chip stocks. Companies with a strong reputation and industry-leading giants are among the most important additions for investors regarding continued growth within their portfolios.
I have chosen three blue-chip stocks to buy with common traits that allow them to experience continued growth in the near term.
These are income-generation stocks that supply investors with solid dividend yields. Trading at a fair valuation and having a growth catalyst, such as increased earnings or acquisitions.
Comcast (CMCSA)
Comcast (NASDAQ:CMCSA) is a leading media and technology company that offers broadband and wireless services to residential and commercial customers. It operates multiple Universal theme park locations in California, Florida, Japan, and China and owns the streaming service Peacock.
Over the past year, Comcast’s share price has remained practically unchanged. However, with a strong valuation and dividend growth, CMCSA could be one of the solid blue-chip stocks to buy for investors looking to improve their portfolios.
On April 25, Comcast reported earnings for the first quarter of 2024, stating total revenue increased by 1% and adjusted net income rose by 8% year-over-year. Most notably, its free cash flow surged by 19% within the same period. Additionally, Peacock’s paid subscribers increased 55% compared to the previous year. Recently, solid revenue-grossing movies such as Kung Fu Panda 4 and The Fall Guys were released.
In this first quarter, Comcast repurchased approximately $2.4 billion in shares, and its wireless customer lines increased 21% year over year. Comcast’s annual dividend yield is 3.16%, which amounts to a quarterly dividend of 31 cents per share. Its most recent dividend was distributed to investors on April 1.
Comcast has recently experienced growth across the board with its customer base, especially surrounding Peacock and its wireless, having rapid growth. It provides a strong cash position, which is a great sign to investors. It also offers a fair valuation, with its forward P/E ratio being 9.33, while the sector average is 13.86.
Pfizer (PFE)
Pfizer (NYSE:PFE) is a pharmaceutical manufacturer that distributes various medications and vaccines to treat cardiovascular, metabolic, and infectious diseases. Most notably, it provided the Covid-19 vaccine alongside BioNTech (NASDAQ:BNTX)
Over this past year, its star price has fallen significantly by 22% following a large reduction in the need for its COVID-19 vaccine.
On May 1, Pfizer reported earnings for Q1 2024, stating that total revenue fell by 20% and its net income dropped by 44% to $3.1 billion. Pfizer also reaffirmed its guidance for the full year 2024. Pfizer offers a decent dividend yield of 5.87% on an annual basis. Its most recent dividend was sent out to investors for 42 cents per share on May 8.
Pfizer has begun to experience a rebound in its share price within the last month. The stock price has risen by 12% with the acquisition of Seagen, a biotech company focused on oncology research and treatments. It could be a growth catalyst for Pfizer.
PFE has a decent valuation with a forward P/E ratio of 12.23, below the median sector forward P/E of 19.94.
International Business Machines (IBM)
International Business Machines (NYSE:IBM) provides a range of technology services, including software and hardware, enabling generative AI and cloud-based services to operate. Notable vendors for IBM include Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Salesforce (NYSE:CRM).
On April 24, IBM released its Q1 2024 earnings, stating total revenue increased by 1% while net income rose 73%. However, it fell short of analyst expectations, resulting in the stock price falling by 8%.
IBM also mentioned in its earnings release that it acquired HashiCorp (NASDAQ:HCP), a cloud infrastructure company, for $35 a share, which equates to approximately $6.4 billion in total enterprise value. The goal of this acquisition is to help improve IBM’s cloud platform.
IBM also offers a dividend yield of 3.95% on an annual basis. Its most recent distribution to investors was one dollar and 67 cents per share on May 8. IBM is trading at a great valuation. A forward P/E ratio of 16.91, while the sector average is 24.22, makes it a solid blue-chip buy for investors.
As of this writing, Noah Bolton did not hold (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.
