What The Term “Blue Chip Company” Means

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Here are the Features of a Blue Chip Company

Blue chip companies are widely known for good financial performance, product acceptance, high quality management and regular dividend payment.

A Blue chip company is very strong financially, with a solid track record of producing earnings and only a moderate amount of debt. It also has a strong name in its industry with dominant products or services. Typically, these companies are large (international) corporations that have been in business for many years and are considered to be very stable.

There is no formal requirement for being a blue chip.

Characteristics of Blue Chip Companies

  • They are usually large companies.
  • They are usually older companies.
  • They generally sell widely used products or services.
  • They perform relatively well during economic downturns.
  • They have records of long-term, stable growth.
  • They usually pay regular dividends, and those dividends usually grow over time.
  • They have reputations as management and industry leaders.
  • They are usually very creditworthy.

Investors often consider the stocks of blue chip companies good long-term investments because blue chips tend to offer consistent returns.

Here is a list of Some Nigerian Blue Chip companies

FBNH

GLAXOSMITHKLINE

GUINNESS

NIGERIAN BREWERIES

DANGOTE CEMENT

JULIUS BERGER

NESTLE

1 COMMENT

  1. Excellent article. Good to add that the description “blue chip” comes from the card game of poker, where the blue-coloured chips have the highest value.

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