The explosive rally seen in November shows signs of faltering. As of this writing, the major stock indices have declined for three consecutive days at the start of December and there is no sign of a year-end Santa Claus rally.
Could investors end up with a lump of coal in their stockings this year? It’s still early in the final month of the year, but a surge in the market this December is by no means guaranteed. So what are investors to do amid continued uncertainty?
One of the best options is to put capital into stocks of reliable blue-chip companies. This idea looks particularly good as the Dow Jones Industrial Average that is comprised of 30 large blue-chip stocks is outperforming right now, having posted its best monthly gain in November since October 2022. Here are three blue-chip stocks you can count on for stability.
McDonald’s (MCD)
Fast food giant McDonald’s (NYSE:MCD) is typically a safe bet. The burger chain’s stock is up nearly 10% this year and has gained more than 55% in the last five years. And the company has just announced a major expansion initiative, with plans to open 9,000 new restaurant locations and add 100 million members to its loyalty rewards program by 2027. The aggressive growth targets are part of the Chicago-based company’s plans to grow its worldwide sales and bolster its stock price.
For 2024, McDonald’s is projecting net new restaurant growth of 4%. After next year, the company plans to grow its restaurant count by about 5% annually. Company executives said that by 2027 they want to have 50,000 restaurant locations worldwide, up from 41,198 restaurants currently. The company also plans to boost its loyalty rewards program that helps to drive mobile sales and repeat business. MCD stock also pays a healthy quarterly dividend of $1.67 per share for a yield of 2.33%.
Advanced Micro Devices (AMD)
Speaking of growth, Advanced Micro Devices (NASDAQ:AMD) has just introduced a new series of microchips called the “Ryzen 8040” that are aimed at boosting artificial intelligence (AI) applications by up to 60%. AMD announced that its new chips will be incorporated into most laptops and personal computers starting in the first quarter of 2024. The new chips are expected to be a major catalyst to AMD’s revenue and its stock price.
AMD also announced that its highly anticipated MI300X accelerator microchip is now available for sale. That chip is used in data centers and servers and directly competes against rival Nvidia’s (NASDAQ:NVDA) high-powered AI data center chips. AMD said that Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) have already placed large orders for the MI300X chip, which they plan to use in their own AI models.
During its most recent earnings call, AMD executives said that they expect data center microchips to generate $2 billion of sales for the company in 2024. AMD’s stock has gained 83% in 2023.
Toll Brothers (TOL)
Despite some difficulties in the housing market brought about by high interest rates, the stocks of home builders are proving to be good investment as we close out 2023 and look to 2024. Case in point is Toll Brothers (NYSE:TOL), whose stock has risen 75% this year, including a 3% boost after the company reported fiscal fourth-quarter and full-year financial results that beat Wall Street forecasts. Through five years, TOL stock is up 168%. The stock also pays a quarterly dividend of 21 cents for a 0.94% yield.
Toll Brothers reported earnings per share (EPS) of $4.11 on revenue of $3 billion for its fiscal Q4. For the full year, the company announced earnings of $12.36 a share on $10 billion in sales. Both the quarterly and full-year results beat analysts’ consensus expectations. Looking head, Toll Brothers expects to do even better, noting that a decline in interest rates in 2024 should bolster the spring selling season across the U.S. housing market. It plans to deliver more than 10,000 homes over the next 12 months.
On the date of publication, Joel Baglole held long positions in NVDA and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
