The 7 Best Blue-Chip Stocks to Buy Now: September 2023

With market uncertainty lingering as we move into autumn, now would be a good time for investors to put capital into some trusted blue-chip stocks. These are reliable companies that have market-leading positions, strong balance sheets, consistent earnings, and a history of providing shareholders with distributions in the form of dividend payments and stock buybacks. The opposite of speculative and volatile, blue-chip stocks can carry investors through any type of market and provide peace of mind along the way. With the near-term direction of the economy and interest rates unclear, investors would be smart to hedge their bets as we enter the final leg of the year by shifting money into blue-chip stocks that can give their portfolio balance and stability. Here are the seven best blue-chip stocks to buy now: September 2023.

Lululemon (LULU)

Athletic apparel retailer Lululemon (NASDAQ:LULU) just reported a very strong quarter. The company announced that its fiscal second-quarter profit rose 18% from a year earlier due largely to increased sales throughout China. Company executives say that sales growth in China remains decent in the current third quarter despite the economy slowing in the country of 1.4 billion people. Lululemon currently has 107 stores in China and plans to open 35 more stores internationally this year, with most of the new locations based in Asia.

For its fiscal Q2, Lululemon announced EPS of $2.68 versus $2.54 that was expected on Wall Street. Revenue in the quarter totaled $2.21 billion compared to a consensus forecast of $2.17 billion. The company’s revenue was also up 18% year-over-year in the latest quarter. On an earnings call, Lululemon executives said the company’s earnings are being fueled by strong international growth, with sales increasing 52% in markets outside of North America. And if those aren’t enough reasons to add LULU to the list of best blue-chip stocks, consider that LULU stock has gained 25% this year and is up 168% over five years.

UBS Group (UBS)

Speaking of profits, how about Swiss banking giant UBS Group (NYSE:UBS)? The European lender recently reported a record profit of $29 billion following its takeover of former rival Credit Suisse. The record profit crushed analysts’ consensus forecast for a profit of $12.8 billion. UBS attributed much of the profit to the value of Credit Suisse’s loan books, which created a huge accounting gain for the Zurich-based lender. UBS agreed to buy its troubled longtime rival Credit Suisse this spring at a price of $3.2 billion, which was viewed as very cheap.

By all accounts, the absorption of Credit Suisse is going better than expected and ahead of schedule. UBS said it is already seeing benefits from the integration of Credit Suisse’s large wealth management business. Plus, UBS executives say they anticipate costs savings of $10 billion by the end of 2026, compared with an earlier estimate of $8 billion by 2027. Most of the cost savings will come from reducing the size of its workforce, with UBS already laying off thousands of workers as it acquired Credit Suisse.

Owing to the successful takeover, UBS stock has risen nearly 40% this year and is currently trading at a 52-week high.

Salesforce (CRM)

Leading cloud computer company and Dow component Salesforce (NYSE:CRM) has redeemed itself in recent months with a successful turnaround plan that is now yielding results. The company’s stock recently rose more than 5% in a single trading session after the cloud giant posted Q2 financial results that beat Wall Street forecasts across the board. Salesforce posted EPS of $2.12 versus $1.90 that was expected by analysts, and revenue of $8.60 billion compared to $8.53 billion that was anticipated. The company’s revenue was up 11% from a year ago.

Salesforce said it saw growth in all five of its product categories during Q2 and added that it sees further expansion through artificial intelligence (AI), announcing an AI Cloud that will include tools for marketing and data analytics. In terms of forward guidance, Salesforce said it now expects EPS of $2.05 to $2.06 on $8.7 billion to $8.72 billion in revenue for Q3. Salesforce’s stock is now up 64% this year, making it the best-performing component of the Dow Jones Industrial Average so far in 2023.

Walmart (WMT)

Stocks don’t get much more blue-chip than Walmart (NYSE:WMT). The discount chain is one of the few retailers whose sales are managing to hold up this year.  Analysts are increasingly bullish on WMT stock, especially as the company expands its e-commerce sales channels. Walmart is also now the largest grocery store chain in the U.S. and sales of food items are the primary engine behind its revenue and profit growth these days.

Driven by strong grocery sales and online spending, Walmart reported Q2 EPS of $1.84 versus $1.71 that was expected. Revenue in the April through June period totaled $161.63 billion compared to $160.27 billion that was the consensus expectation on Wall Street. Importantly, the big box retailer said its e-commerce sales during Q2 rose 24% from a year earlier. Same-store sales grew 6.4% compared with a year ago. Walmart was one of the few U.S. retailers to raise its full-year guidance coming out of its Q2 print.

WMT stock has increased 13% this year, is at a 52-week high, and has risen 70% through five years.

CrowdStrike Holdings (CRWD)

Shares of cybersecurity firm CrowdStrike Holdings (NASDAQ:CRWD) got a nice 10% lift coming off the company’s recent Q2 earnings report. The shares are now up 56% this year and have gained 150% since September 2018. CRWD stock has gathered momentum after the company reported a big earnings beat and raised its forward guidance for the year. The Austin, Texas-based company announced Q2 EPS of 74 cents, which was far ahead of Wall Street forecasts of 56 cents.

Revenue came in at $731.6 million, up 37% from a year ago. That was also ahead of analyst expectations of $724.1 million. The company’s free cash flow stood at $188.7 million at quarter’s end, up 39% from $135.8 million a year earlier. Looking forward, CrowdStrike said it now expects revenue of $775.4 million to $778 million and 74 cents in earnings for the current third quarter. Wall Street had been looking for $774 million in revenue and 60 cents in profit for Q3. Analysts praise the fact that CrowdStrike is continuing to gain market share.

Exxon Mobil (XOM)

With crude oil prices back above $85 a barrel, there’s still a case for buying shares in energy giants. And one of the very best is Exxon Mobil (NYSE:XOM). Like all major oil producers, Exxon Mobil has seen its production and earnings slow down this year as crude prices have come off a peak of $122 a barrel reached in June 2022. The company reported a 56% decline in its Q2 profit due to retreating crude prices. But look a little closer and there are still reasons to be bullish on XOM stock.

Apart from last year’s record second quarter results, Exxon Mobil posted its strongest earnings for the April through June period in more than a decade this year, helped by aggressive cost cutting. The company said it achieved structural cost savings of $8.3 billion from 2019 levels, nearing its target of $9 billion in total cost cuts. The company also distributed $8 billion in cash to shareholders in Q2 of this year, including $3.7 billion of dividend payments.

XOM stock is up only 6% this year and looks like good value trading at just nine times forward earnings and offering a quarterly dividend payment that yields a high 3.21%.

Home Depot (HD)

Like Walmart, Home Depot (NYSE:HD) is a tried-and-true blue-chip name and deserves a spot among the best blue-chip stocks list. Also like Walmart, Home Depot’s financial performance  continues to surpass analyst expectations, beating on both the top and bottom lines with its Q2 print. The Atlanta-based home improvement retailer posted EPS of $4.65 versus $4.45 that was forecast on Wall Street. Revenue in the period totaled $42.92 billion compared to $42.23 billion that had been forecast. The company’s sales continue to get a boost from contractors and professional home builders.

If there was a rain cloud hanging over the latest financial results, it was that Home Depot issued muted guidance for the remainder of this year as consumer spending slows, saying it expects comparable sales to pullback 2% to 5%. Home Depot’s management team also said they are seeing demand for do-it-yourself renovation projects normalize after they skyrocketed while people were sheltering in place at home during the Covid-19 pandemic.

On the positive side, Home Depot announced a new $15 billion stock buyback program that takes effect immediately. And management made no mention of store thefts during their latest earnings call. HD stock has gained 15% in the last 12 months and 62% over five years.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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