The Dow Jones Industrial Average was up over 400 points for much of the day yesterday. It’s amazing what some good news on the trade war front can do.
While we can’t expect that type of rally every day, the point is that if the trade war issues were off the table, most other economic indicators look more like silver linings than clouds.
On the other hand, when you are dealing with a country like China, there are significant global implications.
When the No. 1 and No. 2 economic powers square off, it sends traders scurrying around trying to hedge for the worst and leverage for the best.
Now that talks look like they’re back on, stocks are in a less stressful environment and traders can go back to business as usual, and not worry so much about a massive trade war.
The 10 A-rated blue-chip stocks to buy below are well positioned to grow as the global economy expands. Most are also leveraged to U.S. growth, just in case there’s some short-term international dust ups.
A-Rated Blue Chip Stocks to Buy: Lennar Corporation (LEN)
Lennar Corporation (NYSE:LEN) is one of the leading homebuilders in the U.S.
In the past year, LEN stock has essentially tread water as investors wait to see how inflation will affect home purchases. But the fact is, demand continues to grow and that has been reflected in LEN stock.
In Q2, LEN announced that its backlog had nearly doubled and it crushed earnings estimates. Profits were up 45% compared to the same quarter a year ago. Total revenue was up 67%.
If a company reported these numbers in any other sector, its stock would be going parabolic. But tariff concerns and little visibility on interest rates have kept any breakouts slim.
This is a great time to start building a position.
A-Rated Blue Chip Stocks to Buy: Amazon (AMZN)
Amazon (NASDAQ:AMZN) is certainly a blue-chip stock that has few peers. And the fact that not all its revenue is resting on the back of its tech certainly helps diversify its fortunes.
From cloud computing, to ecommerce, to grocery stores and entertainment, AMZN is a conglomerate that is being built from the inside out. The one thing that drives its success is its ability to grow into businesses that are complimented by its existing businesses.
For example, it was just announced that AMZN will be looking to buy the art house movie company Landmark Theaters. This would give it a place to feature its content in more than 50 theaters in major cities across the U.S.
Add to this its forays into healthcare as well as logistics, and you’ll see that its growth is leveraged to its successes. And that makes for a compelling growth story.
A-Rated Blue Chip Stocks to Buy: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is another top blue-chip growth play, but it has a different story to tell than its competitors.
It certainly has a lock on the world’s most popular desktop and laptop operating system, Windows. And that’s a very good place to start.
In recent years, it has tried to break into the mobile OS market to no avail, with Android and iOS not leaving much room for options.
But it has built out its cloud operating division Azure, which is really the backbone of mobile computing. If you don’t have the ability to store massive amounts of data in the cloud, you can’t have small mobile devices to access it.
MSFT is also making significant headway with its hardware. Its gaming console, Xbox One, is very popular and its new generation of Surface laptop/tablet hybrids are getting very competitive in features, performance and style with its lead competitor, Apple (NASDAQ:AAPL).
A-Rated Blue Chip Stocks to Buy: Vantage Energy Acquisition (VEAC)
Vantage Energy Acquisition (NASDAQ:VEAC) is an interesting venture if you’re interested in getting into the U.S. energy exploration and production (E&P) sector with a literal “ground floor” opportunity.
This company was formed by energy investment management firm Natural Gas Partners that has nearly $20 billion invested in similar companies.
Essentially, you’re buying the potential for VEAC to acquire land that has productive reserves in the next couple of years. You’re trusting that the team in place will find good properties and then turn them into productive assets or sell them to someone who will.
Again, the team in place has a lot of experience, but this isn’t the easiest path for energy investors. Still, it may be a very exciting one. If the U.S. energy patch grows at a solid clip, this could be a very lucrative investment.
A-Rated Blue Chip Stocks to Buy: Visa (V)
Visa (NYSE:V) is having its moment in the sun. It’s up 37% in the past 12 months, which is pretty good for blue-chip financial company with a $313 billion market cap.
The fact is, both consumers and financial institutions are starting to warm up to the idea of a cashless society. For financial institutions it means far less time and energy (i.e., money) spent on counting, storing and managing all that paper.
For individuals and businesses, it is also much easier to buy things without having to stop to write a check or fish around for a dime or penny to avoid getting more cumbersome change to carry around.
Some traditionalists complain about the erosion of privacy in a digital cash world, but as with many things, the benefits tend to outweigh the risks for most people. And in developing economies, debit cards are becoming the go-to form of payment.
This trend will keep V growing for many years to come.
A-Rated Blue Chip Stocks to Buy: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) has gone from a tech industry specialist to one of the most dominant chipmakers on the planet.
And the crazy thing is, it’s the market that has grown around it, rather than NVDA hunting for a market.
Simply put, NVDA makes graphic processing units (GPUs). These are the chips — or graphics cards — that allow computers to process images.
Now, think about how images — videos, movies, selfies, Vines, etc. — have become so common to our experience with everything from our desktops to our smartphones. Then think about virtual reality and augmented reality. Then add to that all the scientific applications of enhanced graphics of everything from atomic structures of molecules to the farthest galaxies in space.
Then think about the Internet of Things (smart houses, driverless cars, etc.) and cloud computing and Big Data.
All these are powered by NVDA chips. Welcome to the future.
A-Rated Blue Chip Stocks to Buy: Netflix (NFLX)
Netflix (NASDAQ:NFLX) is yet another FANG stock that made this list. Who would have ever imagined that the company that started by changing the way people rented movies would end up becoming one of the most influential entertainment companies of the early twenty-first century? And not only has it changed U.S. viewing habits, but it is transforming how people around the world watch their entertainment.
Recently, NFLX fell short of its subscriber goals for the quarter and the stock took a hit. But this entertainment titan with a $140 billion market cap is still up nearly 90% for the past 12 months and 64% year-to-date. It seems, this small setback isn’t worrying investors too much.
Just today it announced another major coup, signing the creator of the hit network ABC (owned by Disney (NYSE:DIS) ) television show Black-ish to a multi-year development deal worth nearly $100 million.
This is on the heels of grabbing Shonda Rhimes of Grey’s Anatomy fame as well as American Horror Story producer Ryan Murphy from Twenty-First Century Fox (NASDAQ:FOXA).
Remember that adding this talent also denies this talent to its competitors.
A-Rated Blue Chip Stocks to Buy: Nike (NKE)
Nike (NYSE: NKE) hasn’t made the headlines much this year. Some of that has to do with the meltdown of its competitor Under Armour (NYSE:UA), the rise of Adidas (OTCMKTS:ADDYY) and the controversy of these companies working deals with colleges under the table to promote their brands.
But as we look forward, NKE is back on the right track.
Up 45% in the past 12 months, it’s regaining its footing against ADDYY and with the U.S. economy strong, it is growing revenue at home.
ADDYY has a tougher European economy to sell into at this point.
Tariffs may be the biggest issue for both of these major brands since a weak China is a weak Asia and that means slower sales. But this isn’t a long-term issue and NKE will find a way.
A-Rated Blue Chip Stocks to Buy: Union Pacific Corporation (UNP)
Union Pacific (NYSE:UNP) is a transportation company. Fundamentally, it’s a railroad company that does a fair amount of intermodal transportation services.
This is the core of any modern economy — getting goods from the docks and factories to distributors and retailers. When the economy is good, transport companies like UNP are good.
In the past 12 months, UNP stock is up 44%. You don’t have to have a degree in economics to figure out that when a transport firm is growing like that, business is good. And if business is good, the economy is good.
The big concern for UNP is if there’s a real trade war on the Atlantic or Pacific sides of the globe. There’s a good chance the increasing domestic consumption would help keep UNP busy for a quarter or two, but anything longer may start to hurt it, and the U.S. economy in general.
But UNP has been around long enough to see its fair share of these types of challenges and it’s the kind of company that will always find a way to take advantage of whatever opportunities avail themselves. It will not be caught by surprise.
A-Rated Blue Chip Stocks to Buy: Valero Energy (VLO)
Valero Energy (NYSE:VLO) is a great downstream energy pick. It’s the world’s largest independent oil refiner that also operates its own retail stations. It also produces ethanol.
The real pivot point for oil comes when the oil from the fields hits the refiners. It’s their job to break down the crude into constituent parts and then sell on the finished products to various markets.
You see, it’s not just that crude is turned into gasoline. It’s also turned into a number of chemicals that are used in a variety of industries.
When the economy is doing well, demand for all these products rise and VLO is rewarded with rising margins and increasing revenue. Another plus is, unlike major diversified oil companies, VLO doesn’t have any of the risks or headaches managing the upstream or midstream parts of the energy business.
It’s up 71% in the past 12 months and it is still delivering a 2.9% dividend yield.
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Source: Investor Place