blue chip

noun

Updated on: 17 Apr 2018

Definition of blue chip

1 a : a stock issue of high investment quality that usually pertains to a substantial well-established company and enjoys public confidence in its worth and stability; also : a company that offers such stocks

b : a business or undertaking with an outstanding record or likelihood of profitability

2 : one that is outstanding: such as

a : an outstandingly worthwhile or valuable property or asset

b : an athlete rated as excellent or as an excellent prospect

—

blue-chip

adjective

See blue chip defined for kids

Recent Examples of blue chip from the Web

The hollowing out of Trump's political circle is mirrored in his legal war council, following the recent departure of his counsel John Dowd and a struggle to attract blue chip counsel to strengthen his team.

— stephen collinson, CNN, "Trump embraces his instincts at a key global moment," 2 Apr. 2018
This is a different type of bunch for him, because he's been getting these blue chip players now, these one-and-dones.

— jack holmes, Esquire, "Reggie Miller Sounds Off on Paying College Athletes," 15 Mar. 2018
Once the ultimate blue chip stock, a member of the Dow Jones Industrial Average since 1932, the consumer-goods giant famous for Ivory soap, Dawn dish liquid and Bounty paper towels has a market capitalization of $238 billion.

— stephen wilmot, WSJ, "Why P&G Investors Should Want Nelson Peltz on the Board," 15 Sep. 2017
BlackRock has made investments in Italian blue chips, Elliott among other things has pursued distressed debt opportunities, and Blackstone has been active across the board with a focus on real estate.

— mario calvo-platero, WSJ, "Italy’s Recovery Will Survive Its Election," 2 Mar. 2018
The blue chip average had been 300 points higher before the late-afternoon slide.

— Washington Post, "Spike in bond yields upends US stock market rally," 21 Feb. 2018
Apple, Cisco, Intel and Microsoft were all on the upside as the rest of the 30-stock blue chip index went negative.

— Anchorage Daily News, "Dow closes down more than 1,100 points after plunging over 1,500 points," 5 Feb. 2018
There are literally hundreds of strategies for investing in stocks that can produce good long-term results but my preference is to use blue chip dividend-paying stocks.

— stewart welch, AL.com, "100 Rules of Success: Investing Part 3," 2 Feb. 2018
But ultimately, look for the blue chips to dominate the second week.

— the si staff, SI.com, "2018 Australian Open Roundtable: Predictions, Dark Horses and Top Storylines," 12 Jan. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'blue chip.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of blue chip

1892

in the meaning defined at sense 1a

See Words from the same year

NEW! Time Traveler

Financial Definition of BLUE CHIP

blue chip

noun

What It Is

A blue chip is a nationally recognized, well-established and financially sound company. The term comes from blue poker chips, which have the highest value in the game.

How It Works

Blue chip companies have several characteristics:

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.

IBM, AT&T, General Electric, Coca-Cola and DuPont are examples of blue chip companies.

Why It Matters

Investors often consider the stocks of blue chip companies good long-term investments because blue chips tend to offer consistent returns. Higher stock prices and lower yields generally balance this perceived lower risk, however.

The two most popular lists of blue chip stocks are the Dow Jones Industrial Average and the Nifty Fifty. The Dow Jones Industrial Average is a list of thirty industry-leading companies chosen by the editors of the Wall Street Journal. The Nifty Fifty are the fifty blue chip stocks that became popular before the bear market of 1973-1974.

Investors can purchase shares of blue chip companies directly or they can invest in derivative blue chip instruments that provide exposure to a variety of blue chip stocks. One example is a type of derivative blue chip instruments called Diamonds, which are exchange-traded securities that represent fractional shares of the underlying components of the Dow Jones Industrial Average.

Source: Investing Answers

Law Dictionary

blue chip

noun

legal Definition of blue chip

: a stock issue of high investment quality that usually pertains to a substantial well-established company and enjoys public confidence in its worth and stability

—

blue-chip

adjective

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Definition of blue chip

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blue-chip

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