Blue chip (stock market)

A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. Most blue chip stocks pay regular dividends, even when business is faring worse than usual. They are valued by investors seeking relative safety and stability, though prices per share are usually high. Typically, such stocks are perceived to offer reliable returns, low yield, and low risk. Many blue chips are components of popular indices, such as the Dow Jones Industrial Average and the S&P 500.

Alternately, blue chip stocks are sometimes defined as companies whose stocks have large market capitalization values (for example, over $10 billion.)

The term comes from blue-colored poker chips, which are typically the most valuable. Examples are Royal Dutch Shell (petroleum), The Coca-Cola Company (food), American Express (financial services) and IBM (information technology). The now defunct company Enron was once considered a blue chip stock.