Titans of Industry: 3 Blue-Chip Stocks Ruling the Roost

These blue-chip stocks are leading their industries and rewarding long-term investors

Blue-chip stocks are established firms that offer revenue and earnings growth. Some of these companies are more mature and don’t go through as much volatility. Other blue-chip stocks can still grow and generate solid long-term returns but may be more prone to a market correction.

These types of stocks are optimal for investors who can buy and hold onto investments for many years instead of a few months. Investors looking for promising blue-chip stocks may want to consider these three picks.

Chipotle (CMG)

Source: Northfoto / Shutterstock.com

Fast food restaurant stocks have rewarded long-term investors. When most people think of fast food restaurants, they immediately think of McDonald’s (NYSE:MCD) which is up by 62% over the past five years.

However, smaller fast food chains offer more growth potential for long-term investors. Some of these same corporations provide healthier food which appeals to consumers. While investors can choose from many healthier fast food stocks, few of them match up to Chipotle (NYSE:CMG). 

Shares of the Mexican fast food chain are up by 76% over the past year. That’s more than McDonald’s 5-year gain. Also, CMG is up by 337% over the past five years. The firm is still expanding its profit margins while growing at a solid rate.

Chipotle increased its revenue by 15.4% year over year (YOY) in the fourth quarter of 2023. Diluted EPS increased by 27.3% YOY. Further, the company plans to open an additional 285 to 315 restaurants in 2024 which will further strengthen its growth rates. Therefore, the firm looks poised to gain market share and reward long-term investors. 

Deckers Outdoor (DECK)

Deckers Outdoor (DECK) logo displayed on smartphone screen

Source: shutterstock.com/Piotr Swat

Deckers Outdoor (NYSE:DECK) is the parent company of many athletic apparel and sneaker brands like Hoka, Ugg, and Teva. The firm is gaining market share while posting strong financials. 

In the third quarter of fiscal 2024, Deckers Outdoor achieved 16% YOY revenue growth. Also, the company increased its diluted EPS by 44% YOY. The athletic apparel company used its Q3 report to raise revenue and diluted EPS guidance for fiscal 2024. 

Hoka and Ugg led the way to record revenue. Unlike many stocks with these growth numbers, Deckers Outdoor still has a reasonable valuation. Shares trade at a 33 P/E ratio. 

The recent S&P 500 addition has a history of rewarding long-term investors. Shares are up by 113% over the past year and have gained 551% over the past five years. Analysts have been bullish on this stock and currently rate it as a strong buy. The highest price target of $1,150 suggests a 25% upside from the current price.

Walmart (WMT)

Image of Walmart (WMT) logo on Walmart store with clear blue sky in the background

Source: Jonathan Weiss / Shutterstock.com

Walmart (NYSE:WMT) offers stability since people will always turn to the retailer for affordable products. The company has specialized in this area for more than 60 years and has an impressive track record of rewarding long-term investors.

Shares are up by 30% over the past year and have gained 85% over the past five years. Additionally, the stock offers a 1.40% dividend yield for investors who seek cash flow from their investments. 

Walmart’s recent earnings report demonstrates why the company is positioned to reward investors. Revenue increased by 5.7% YOY. Notable improvements in e-commerce and advertising revenue can ignite future growth. Walmart’s recent acquisition of Vizio Holdings will further strengthen its rising advertising segment.

Finally, the e-commerce segment was up by 23% YOY and surpassed $100 billion in annual revenue. That’s compared to the $648.1 billion in full year revenue. Advertising revenue increased by 28% YOY. Therefore, Walmart is tapping into multiple growth verticals that can lead to revenue and earnings acceleration in the upcoming quarters. 

On this date of publication, Marc Guberti held a long position in DECK. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

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