3 Blue Chip Stocks That You Can Buy and Hold for Years
3 Blue Chip Stocks That You Can Buy and Hold for Years
There are many stocks that you can invest in for the long haul and effectively forget about. These are businesses with robust financials, strong growth prospects, and a lot of stability for investors. They are what you would consider to be blue chip stocks.
Three of the best blue chip stocks to buy, whether you're a seasoned investor or new to Wall Street, are Walmart (NYSE: WMT), Apple (NASDAQ: AAPL), and Eli Lilly (NYSE: LLY). Here's a closer look at these stocks to see why they can make for solid investments in the long run.
1. Walmart
It's hard to imagine a scenario where big-box retailer Walmart isn't a huge force in the future. The company recently released its first-quarter earnings for fiscal 2025, with consolidated revenue of $161.5 billion (for the period ending April 30) rising by 6% year over year.
More impressively, its e-commerce business grew globally by 21%. Its advertising business achieved an even higher growth rate of 24%.
Walmart is not your typical retailer in that it's always looking for ways to get much bigger. Whether that's through the launch of its subscription service, Walmart+, or its planned acquisition of TV maker Vizio, the business is always eyeing new ways to expand.
Over the next five years in the U.S., the company also anticipates it will expand or open 150 stores.
Impressive financials put it in a strong position to pursue acquisitions and reinvest in its operations. Management also puts that money to work in rewarding its shareholders, with annual dividend increases for 51 consecutive years.
Its 1.3% yield is in line with the S&P 500 average and gives investors yet another reason to buy and hold the stock for the long haul.
2. Apple
The iPhone and iPad maker is another example of a phenomenal stock to own. Apple isn't generating strong sales growth right now due to inflation, but the business itself still looks solid. Over the trailing 12 months, the company has generated $100.4 billion in profit and $101.9 billion in free cash flow.
Apple does pay a modest dividend, which yields 0.5%, but share buybacks have been the company's preferred method of rewarding its investors. Earlier this month, Apple announced plans to repurchase $110 billion in stock, a new record for the company.
News of the buyback invigorated investors, sending the stock up. And with the business still doing well, they are likely to continue to see more buybacks, dividend payments, and growth.
In its most recent quarter (for the period ending March 30), Apple did release some underwhelming numbers, with net sales of $90.8 billion declining by 4% year over year. But the company hit an all-time record for services revenue at $23.9 billion.
Apple is, however, rumored to be working on a chatbot that could rival ChatGPT, and its latest phones are likely to feature artificial intelligence capabilities, which could help boost its growth.
The business has been slowing of late, but investors shouldn't count out Apple in the long run.
3. Eli Lilly
Eli Lilly is the most valuable healthcare stock in the world, with a market cap of $730 billion. Like Apple, it pays a modest dividend, which yields 0.7%, but it's the long-term prospects that have investors bullish on the stock.
The company's business is diverse -- Eli Lilly is a drugmaker with products serving multiple therapeutic areas, including immunology, neuroscience, and oncology.
Its most promising opportunities, however, are in diabetes and obesity control, which is its largest segment. Diabetes drug Trulicity has long been the company's flagship product, but new diabetes drug Mounjaro has taken over, generating $1.8 billion in revenue during the first three months of the year (versus less than $1.5 billion for Trulicity).
And recently approved Zepbound, which is effectively the same drug as Mounjaro but just approved for weight loss, has already generated $517 million and is sure to rise higher. It might not be long before Trulicity falls to the No. 3 spot in sales for Lilly.
The healthcare company has promising potential in the weight loss and diabetes categories, but it's a much broader business than that. Another potential catalyst on the horizon is donanemab, its early-stage Alzheimer's treatment. If it obtains approval, there could be even more growth ahead.
Lilly's strong growth prospects and high profit margins in excess of 17% make this an enticing stock to buy and hold.
Its valuation might not be considered cheap, at more than 110 times trailing earnings, but the sheer potential it has to get bigger is what should keep investors bullish. Eli Lilly could very well end up being the first healthcare stock with a market cap topping $1 trillion.
Should you invest $1,000 in Walmart right now?
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Walmart. The Motley Fool has a disclosure policy.