blue chip

noun

Definition of blue chip

1a : 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

Other Words from blue chip Example Sentences Learn More about blue chip

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Examples of blue chip in a Sentence

Recent Examples on the Web

Recession fears aside, there are also legitimate worries that the US-China trade war will hurt corporate profits for leading US blue chip companies like Apple, Coke, GM and Caterpillar. — Paul R. La Monica, CNN, "How to find yield in a low-rate world," 6 Sep. 2019 The trade volleys exchanged around the weekend, including China's willingness to allow its currency to drop below a key threshold, have shaved more than 5 percent off the blue chip Dow. — oregonlive.com, "Just how bad was Monday’s stock market drop?," 5 Aug. 2019 The three major indices slumped by around 3 percent each by Wednesday's close, with the blue chip Dow Jones Industrial Average suffering its largest percentage loss of the year. — NBC News, "Is Trump right to blame the Fed for market plunge?," 15 Aug. 2019 Some industry experts said the early success of Encore’s table games suggests the company’s emphasis on high-end amenities, such as fancy restaurants and blue chip art, is bringing in the big-spending gamblers that casinos covet. — Joshua Miller, BostonGlobe.com, "At Encore Boston Harbor, gamblers are all-in on table games," 15 Aug. 2019 The blue chips are still way up for 2019 at a nearly 12.8 percent gain heading into one of the historically worst months of the year for stocks. — Thomas Heath, Washington Post, "U.S. stocks are on pace for worst week of 2019 as trade tensions ratchet up.," 2 Aug. 2019 Based in Beijing and founded in 2013 by Jihan Wu and Micree Zhan, Bitmain was the crypto industry’s blue chip company. — Mark Dent, WIRED, "The Hard-Luck Texas Town That Bet on Bitcoin—and Lost," 11 July 2019 Caterpillar, Dow Chemical and JPMorgan Chase were the only three among the 30 blue chips to drop on the day. — Thomas Heath, Washington Post, "Dow blasts past record in shortened session on heightened Fed expectations," 3 July 2019 The potential problem though is that Kentucky is stacked on the perimeter with four blue chip guards and three former McDonald's All-American forwards who want to stretch the floor to the 3-point line at times. — Jon Hale, The Courier-Journal, "Here's why Kerry Blackshear might pick Kentucky basketball — and why he might not," 18 June 2019

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.

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More Definitions for blue chip

blue chip

noun

Financial Definition of blue chip

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

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