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10 of the Best Blue-Chip Stocks to Buy for 2019

John Divine

The best blue-chip stocks for 2019.

You may not think of the stock market as the place to go if you're looking for a place to protect your nest egg and keep your principal intact. But with Americans living longer than ever, seeking out some growth is increasingly becoming a necessity. Most of the best blue-chip stocks to buy for 2019 combine three great factors -- growth potential, dividends and relative stability. These components can insulate your portfolio and provide some much-needed growth potential. With markets in increasingly uncertain times heading into the New Year, these companies, which are household names from a variety of sectors, are among the 10 best blue-chip stocks to buy for 2019.

Johnson & Johnson (ticker: JNJ)

Health care and consumer giant Johnson & Johnson, one of the most resilient stocks on Wall Street, boasts an impressive quality for conservative investors -- a lack of correlation to the broader market. JNJ's beta is 0.31, meaning that for every 100 percent move in stocks over the last three years JNJ has moved just 31 percent. That's generally what you want in the best blue-chip stocks to buy -- a safe haven from dramatic sell-offs. Stability is the name of the game. JNJ also has more than a dozen drugs in areas ranging from oncology to immunology in Phase 3 clinical trials, making health care the powerhouse of its future growth potential.

Berkshire Hathaway (BRK.B, BRK.A)

It doesn't get more blue-chip than Berkshire Hathaway and Warren Buffett, a man who built his empire by investing in the best of the best. Famous for the mantra, "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price," Buffett has assembled an entire set-it-and-forget-it portfolio of fantastic cash cows within Berkshire Hathaway's holding company. More than 99 percent of Buffett's own wealth is in BRK shares to boot. Despite no current dividend, Berkshire's unique willingness to make savvy decisions with shareholder capital gives it a leg up against its competitors.

Apple (AAPL)

Though it wasn't in this category a decade ago, in a way Apple headlines this list. With more than $230 billion in cash on hand, a blockbuster product earning recurring revenue in the iPhone, diversified income streams from the Mac and iPad, growing and high-margin services sales, plus buybacks and dividends bolstering its capital return program, AAPL has everything you might want in a blue-chip stock. A hush-hush electric car project adds a little-discussed growth potential as well. Apple boasts a stable business, brand loyalty and growth prospects. The recent market stumble in tech makes Apple stock all the more attractive for patient investors going forward.

Anthem (ANTM)

An underappreciated blue-chip stock, health insurer Anthem won't post blistering top-line growth for you, but it's a wonderful company at a fair price. The company's revenue is expected to grow 6 percent in 2019. With some good old-fashioned operating leverage at work, earnings per share are expected to grow by roughly twice that amount. Anthem spent $1.5 billion in the first three quarters of 2018 buying back shares, which ended up being a great investment. With a further $6 billion in buybacks authorized and shares trading for roughly 16 times earnings, ANTM stock still seems like one of the best blue-chip stocks to buy despite the recent repurchasing spree.

Comcast Corp. (CMCSA)

Comcast stock doesn't blow anybody's hair back, but this diversified entertainment and communications company rewards shareholders with a very sustainable 2 percent dividend. The company uses just 14 percent of its profits to shower investors in cash. Its $39 billion proposed acquisition of European broadcaster Sky further diversifies its portfolio at the expense of rivals Walt Disney Co. (DIS) and Twenty-First Century Fox (FOXA), the two other bidders. While CMCSA may seem a little boring, it's hard to dislike an oligopoly that grows its revenue by 10 to 15 percent annually from a buyer's perspective. Comcast is increasing its earnings at an attractive pace and trading for a little over seven times earnings.

Bank of America Corp. (BAC)

Bank of America was deep in hock after the financial crisis, paying more than $90 billion in the aftermath of the Great Recession for various fines, suits and damages. With that nightmare behind it, BAC is beginning to have a lot of spare cash flow to put to work, and some of its most important performance ratios are starting to show its improving efficiency. Return on assets has soared from a negative ratio in 2011 to more than 1 percent, and its return on equity is approaching 10 percent after hovering around 5 percent as recently as 2015. Rising rates and a low price-earnings-growth ratio make shares look like a steal at 12 times earnings.

Intel Corp. (INTC)

The best blue-chip stocks to buy for 2019 aren't just those that look cheap for the upcoming 12 months, but have the potential to outperform over the next three to five years. With tech getting clobbered recently, anyone with even a modicum of a contrarian bent should be eyeing Silicon Valley names, and in the mega-cap world that means Intel. The $220 billion chipmaker is trading for 11 times earnings and paying a 2.5 percent dividend. Having just added $15 billion to its buyback program, the Santa Clara, California-based INTC can be a long-term heavy hitter in not just PC semiconductors, but chips for data centers, mobile devices, artificial intelligence, gaming and other high-growth areas.

Phillip Morris (PM)

Want to own a real stalwart that will pay you to sit around passively as it weathers the worst of times with relative ease? Phillip Morris, international tobacco conglomerate and owner of brands like Marlboro and Parliament, is your pick. With a dividend yield rivaling real estate investment trusts and corporate bonds at 5.4 percent, investors shouldn't expect major capital appreciation from PM shares. But it's a great option for conservative income investors. Traditionally insulated from cyclicality, investors can remain confident consumers will continue smoking with brand loyalty regardless of economic circumstances. A spate of insider buying in the low-$80s not long ago should also reassure investors.

Caterpillar (CAT)

A contrarian pick to be sure, CAT is nonetheless one of the best blue-chip stocks to buy for 2019. But it may not be in play for the more easily shaken investor. Unlike Phillip Morris, CAT shares is cyclical, with success premised largely on the health of the global economy, commodity prices, such as oil and gold; and construction. That said, a rock-bottom price-earnings-growth ratio of 0.46 indicates extreme value for the patient investor. A 2.8 percent dividend, combined with the fact that Caterpillar is fresh off a great quarter in which revenue grew 18 percent and earnings per share roared 63 percent, make shares even more attractive.

DowDuPont (DWDP)

Chemical and agricultural leader DowDuPont rounds out U.S. News' list of the best blue-chip stocks to buy for 2019. On the verge of an unusual three-way spin-off, which is set to consummate in mid-2019, owners of DWDP will soon be the proud owners of three separate businesses -- Dow, the materials science company; DuPont, a specialty products business providing construction, biosciences, nutrition and electronics products and materials; and Corteva, an agriculture company. A forward P/E ratio of 12, a 2.7 percent dividend, and the promise of unlocking upwards of $4 billion in cost and growth synergies make DWDP a compelling, if complex, opportunity.

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