Last week, I presented 10 blue-chip companies worth a closer look. With so many blue chips in existence out there, though, 10 didn't feel like enough. So, this week I'm presenting 10 more.
But first, remember what blue-chip firms are: The term "blue chip" is used to describe large and stable companies with established track records.
Note that this is not a list of "buy" recommendations. They're just companies that seem particularly interesting for one reason or another. There are probably some blue-chip companies on the list that will perform very well over the next few years, while others may be in for some tough times. Some are terrific companies, but their stock prices are not bargains at current levels -- you might add such firms to your watch list, in case a good buying opportunity develops in the future. (Meanwhile, if you want explicit recommendations, check out our suite of investment newsletters, which deliver several promising ideas each month -- we have newsletters for income investors, small-company investors, mutual fund investors, and more.)
Off we go!
In 1999, Home Depot raked in a whopping $30 billion in revenues. Just a few years later, it posted sales of more than twice that, roughly $65 billion. Its return on equity is holding steady in the high teens, with net profit margins inching up over the past years. The company is improving itself while focusing on home improvement -- refurbishing many of its older stores, appealing to female shoppers, and boosting its dedication to customer service. Another thing that might interest you is the degree to which Home Depot's management is diverse, gender-wise. Not only is the CFO a woman, but so is the controller, treasurer and investor relations chief. That's kind of unusual.
More than 100 years old, and with about $40 billion in annual sales, Johnson & Johnson is the most diversified health-care company in the world, operating in the pharmaceutical, medical device, and consumer products realms. Its return on equity is solidly in the neighborhood of 25%-plus, while its net profit margins are very healthy, in the high teens. J&J has grown annual sales every year for several decades. Its brands include Band-Aid, Imodium, K-Y, Acuvue, Lactaid, Aveeno, Balmex, Motrin, Monistat, Neutogena, Pepcid, Reach, Splenda, Stayfree and Tylenol.
America's largest food company, Kraft was spun off from Philip Morris -- now Altria Group
This is the world's leading food-service retailer with more than 30,000 restaurants in 119 countries serving 47 million customers each day. It boasts one of the most well-known brands in the world. The company was in the process of turning itself around recently, when its CEO suddenly passed away. Whitney Tilson had named Jim Cantalupo as the CEO of the year just last year. The firm rakes in more than $17 billion annually, and its net profit margins are inching back up to 6% and beyond after having fallen from nearly 15% in 1999.
While well-known as the No. 2 soft drink maker in the world behind Coca-Cola, Pepsi's big business is actually snack foods. Its Frito-Lay operations make it the No. 1 snack food manufacturer in the world. Pepsi shares, currently selling at a P/E in the neighborhood of 26, won't be found in the stock market bargain bin. But, if you're looking for some ballast in these volatile markets, Pepsi should continue to show at least modest growth and will likely hold up better than most companies during inevitable occasional downturns in the market. The company takes in more than $25 billion annually, with return on equity in the 30% range and net profit margins in the mid-teens.
Pfizer is a pharmaceutical powerhouse, sporting a market value of $280 billion. Eleven of its products -- Lipitor, Norvasc, Zoloft, Celebrex, Neurontin, Zithromax, Viagra, Diflucan, Zyrtec, Bextra, and Xalatan -- generated revenues of more than a quarter of a billion dollars in its most recent quarter alone. (That amounts to about a billion dollars each, annually.) Lipitor, the world's largest-selling pharmaceutical, brings in about $10 billion annually. According to the firm, "Four of the worlds eleven best-selling medicines are marketed by Pfizer, and fourteen of our medicines lead their therapeutic areas."
Procter & Gamble
More than 150 years old, Procter & Gamble markets almost 300 products to more than 5 billion consumers in 140 countries. The company is also not afraid to spend on research, in order to develop new products. It spends more than $1.5 billion annually on R&D. Its brands include Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor, Iams, Crest, Actonel, Olay and Clairol Nice 'n Easy. P&G's annual revenues top $43 billion, with net profit margins around 12%.
Sara Lee is much more than just cheesecake. Its brands include Hillshire Farm, Jimmy Dean, Earth Grains, Ball Park, L'Eggs, Hanes, Playtex, Ambi Pur, Kiwi, Chock Full o' Nuts, and Sara Lee. The firm's three lines of business -- food and beverage, branded apparel and household products -- generate nearly $20 billion in revenues annually. The company sports many brands, and most of them hold either the No. 1 or No. 2 spot in their niche. The firm isn't likely to grow at any kind of gangbuster pace, but it does offer a dividend yield above 3%.
Love it or hate it, Wal-Mart is a force to be reckoned with. It sports the highest annual revenues of any company on earth, at more than a quarter of a trillion dollars. Its return on equity is healthy, in the low 20s, and while its net profit margin of between 3% and 4% might seem low, that's actually not bad for a retailer, and when combined with Wal-Mart's phenomenal volume, it churns out some $9 billion in annual earnings and some $4 billion-plus in free cash flow.
Wrigley probably offers more than you think. Founded in 1891, the company's brand lineup now includes Juicy Fruit, Wrigley's Spearmint, Doublemint, Extra, Winterfresh, Big Red, Eclipse, Eclipse Flash, Orbit White, Orbit, Freedent, Surpass, Airwaves, and Alpine. Wrigley owns America's top five gum brands, with a total market share of nearly 60%. The company rakes in more than $3 billion per year, with return on equity in the mid 20s and net profit margins in the mid-teens. The firm has been increasing its revenues by more than 10% per year in recent years.
Wrigley discussion board
These are admittedly only a few of the many blue chips out there. I invite you to share some of your favorite blue-chip companies on our Commentary discussion board. Or just drop in to see what other Fools are saying.
Selena Maranjian produces the Fool 's syndicated newspaper feature - check it out . She owns shares of Pfizer. For more about Selena, view her bio and her profile . You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.
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