10 Best Blue-Chip Stocks to Buy April 2024
10 Best Blue-Chip Stocks to Buy April 2024
10 Best Blue-Chip Stocks to Buy for the Long Term—April 2024
These are the largest firms by market capitalization on Morningstar’s Best Companies to Own list whose stocks were at least 10% undervalued as of April 24, 2024.
These are the largest firms by market capitalization on Morningstar’s Best Companies to Own list whose stocks were at least 10% undervalued as of April 24, 2024.
These are the largest firms by market capitalization on Morningstar’s Best Companies to Own list whose stocks were at least 10% undervalued as of April 24, 2024.
These are the largest firms by market capitalization on Morningstar’s Best Companies to Own list whose stocks were at least 10% undervalued as of April 24, 2024.
- Roche RHHBY
- Pfizer PFE
- Anheuser-Busch InBev BUD
- Comcast CMCSA
- Nike NKE
- Sanofi SNY
- Nestle NSRGY
- Starbucks SBUX
- Toronto-Dominion Bank TD
- Unilever UL
Re: 10 Best Blue-Chip Stocks to Buy April 2024
Roche
Market Capitalization: $196 billion
Morningstar Price/Fair Value: 0.56
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 4.56%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Drug Manufacturers—General
The largest drugmaker and most undervalued company on our list of the best blue-chip stocks to buy, Roche stock trades 44% below our fair value estimate of $55 per share. The company’s drug portfolio and industry-leading diagnostics provide significant competitive advantages and underpin our wide economic moat rating, says Morningstar strategist Karen Andersen. “This Swiss healthcare giant is in a unique position to guide healthcare into a safer, more personalized, and more cost-effective endeavor,” she notes. With its biologics focus and innovative pipeline, we expect Roche to continue to achieve growth as its blockbusters face competition.
Pfizer
Market Capitalization: $149 billion
Morningstar Price/Fair Value: 0.63
Morningstar Style Box: Large Value
Trailing 12-Month Yield: 6.28%
Morningstar Capital Allocation Rating: StandardIndustry: Drug Manufacturers—General
Pfizer stock offers the highest trailing yield among our list of the best blue-chip stocks to buy for the long term. We don’t think the market fully appreciates the pharmaceutical giant’s ability to offset major patent losses over the next five years, argues Morningstar director Damien Conover. We’re most bullish on several recent launches, including cardiovascular drug Vyndaqel, Conover says. Pfizer provided 2024 guidance that acknowledged the firm would be unlikely to hit the previous 6% growth-rate guidance from 2020 to 2025 (excluding covid-19 product sales). Despite the falling outlook, management reiterated support for the dividend, which we believe is secure and will likely support the stock valuation. We think Pfizer stock is worth $42 per share, and it currently trades 37% below that.
Market Capitalization: $196 billion
Morningstar Price/Fair Value: 0.56
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 4.56%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Drug Manufacturers—General
The largest drugmaker and most undervalued company on our list of the best blue-chip stocks to buy, Roche stock trades 44% below our fair value estimate of $55 per share. The company’s drug portfolio and industry-leading diagnostics provide significant competitive advantages and underpin our wide economic moat rating, says Morningstar strategist Karen Andersen. “This Swiss healthcare giant is in a unique position to guide healthcare into a safer, more personalized, and more cost-effective endeavor,” she notes. With its biologics focus and innovative pipeline, we expect Roche to continue to achieve growth as its blockbusters face competition.
Pfizer
Market Capitalization: $149 billion
Morningstar Price/Fair Value: 0.63
Morningstar Style Box: Large Value
Trailing 12-Month Yield: 6.28%
Morningstar Capital Allocation Rating: StandardIndustry: Drug Manufacturers—General
Pfizer stock offers the highest trailing yield among our list of the best blue-chip stocks to buy for the long term. We don’t think the market fully appreciates the pharmaceutical giant’s ability to offset major patent losses over the next five years, argues Morningstar director Damien Conover. We’re most bullish on several recent launches, including cardiovascular drug Vyndaqel, Conover says. Pfizer provided 2024 guidance that acknowledged the firm would be unlikely to hit the previous 6% growth-rate guidance from 2020 to 2025 (excluding covid-19 product sales). Despite the falling outlook, management reiterated support for the dividend, which we believe is secure and will likely support the stock valuation. We think Pfizer stock is worth $42 per share, and it currently trades 37% below that.
Re: 10 Best Blue-Chip Stocks to Buy April 2024
Anheuser-Busch InBev
Market Capitalization: $118 billion
Morningstar Price/Fair Value: 0.67
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 1.37%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Beverages—Brewers
The only brewer on our list of the top blue-chip companies to buy, Anheuser-Busch InBev stock trades 33% below our fair value estimate of $90 per share. The firm has built a vast global scale and regional density through past acquisitions like Grupo Modelo and SABMiller. AB InBev has a history of buying brands with promising growth platforms and then expanding distribution while squeezing costs from the businesses, which contributes to its Capital Allocation Rating of Exemplary. Morningstar strategist Philip Gorham thinks there is plenty of upside with the stock for patient investors.
Comcast
Market Capitalization: $160 billion
Morningstar Price/Fair Value: 0.67
Morningstar Style Box: Large Value
Trailing 12-Month Yield: 2.93%
Morningstar Capital Allocation Rating: StandardIndustry: Telecom Services
Trading 33% below our fair value estimate of $60 per share, Comcast is the only telecom stock on our list of blue-chip stocks to buy. Growth in Comcast’s cable business has slowed, and we expect it to continue to slow as more customers access fiber and wireless network alternatives. We nevertheless think Comcast will be able to limit broadband share losses in the coming years while enjoying solid pricing power, says Morningstar director Mike Hodel. NBCUniversal isn’t as well positioned, but we like the idea of expanding the theme park business around key content franchises, he adds. A solid balance sheet has allowed Comcast to aggressively repurchase shares and pay decent dividends.
Market Capitalization: $118 billion
Morningstar Price/Fair Value: 0.67
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 1.37%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Beverages—Brewers
The only brewer on our list of the top blue-chip companies to buy, Anheuser-Busch InBev stock trades 33% below our fair value estimate of $90 per share. The firm has built a vast global scale and regional density through past acquisitions like Grupo Modelo and SABMiller. AB InBev has a history of buying brands with promising growth platforms and then expanding distribution while squeezing costs from the businesses, which contributes to its Capital Allocation Rating of Exemplary. Morningstar strategist Philip Gorham thinks there is plenty of upside with the stock for patient investors.
Comcast
Market Capitalization: $160 billion
Morningstar Price/Fair Value: 0.67
Morningstar Style Box: Large Value
Trailing 12-Month Yield: 2.93%
Morningstar Capital Allocation Rating: StandardIndustry: Telecom Services
Trading 33% below our fair value estimate of $60 per share, Comcast is the only telecom stock on our list of blue-chip stocks to buy. Growth in Comcast’s cable business has slowed, and we expect it to continue to slow as more customers access fiber and wireless network alternatives. We nevertheless think Comcast will be able to limit broadband share losses in the coming years while enjoying solid pricing power, says Morningstar director Mike Hodel. NBCUniversal isn’t as well positioned, but we like the idea of expanding the theme park business around key content franchises, he adds. A solid balance sheet has allowed Comcast to aggressively repurchase shares and pay decent dividends.
Re: 10 Best Blue-Chip Stocks to Buy April 2024
Nike
Market Capitalization: $143 billion
Morningstar Price/Fair Value: 0.73
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 1.50%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Footwear and Accessories
Nike, the largest athletic footwear brand in all major categories and all major markets, dominates categories like running and basketball with popular shoe styles. We view Nike as the leader of the athletic apparel market and believe it will overcome current challenges, such as uneven demand for sportswear in key markets, argues Morningstar senior analyst David Swartz. Nike’s consumer plan is led by its Triple Double strategy to double innovation, speed, and direct connections to consumers. The plan includes cutting product creation times in half, increasing membership in Nike’s mobile apps, and improving the selection of key franchises while reducing its styles by 25%. Nike stock trades at a 27% discount to our fair value estimate of $129 per share.
Sanofi
Market Capitalization: $117 billion
Morningstar Price/Fair Value: 0.76
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 4.08%
Morningstar Capital Allocation Rating: StandardIndustry: Drug Manufacturers—General
The third and final drugmaker on our list of blue-chip stocks to buy, Sanofi’s wide lineup of branded drugs and vaccines and robust pipeline create strong cash flows and a wide economic moat. Growth of existing products and new product launches should help offset upcoming patent losses, says Morningstar’s Conover. Sanofi’s existing product line boasts several top-tier drugs, including immunology drug Dupixent. A history of acquisitions and robust cash flow from operations mean Sanofi could take advantage of further growth opportunities through external collaborations. We expect the firm’s acquisition focus on immunology drugs and rare disease drugs will continue following several deals in this area. Sanofi stock trades 24% below our fair value estimate of $61 per share.
Market Capitalization: $143 billion
Morningstar Price/Fair Value: 0.73
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 1.50%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Footwear and Accessories
Nike, the largest athletic footwear brand in all major categories and all major markets, dominates categories like running and basketball with popular shoe styles. We view Nike as the leader of the athletic apparel market and believe it will overcome current challenges, such as uneven demand for sportswear in key markets, argues Morningstar senior analyst David Swartz. Nike’s consumer plan is led by its Triple Double strategy to double innovation, speed, and direct connections to consumers. The plan includes cutting product creation times in half, increasing membership in Nike’s mobile apps, and improving the selection of key franchises while reducing its styles by 25%. Nike stock trades at a 27% discount to our fair value estimate of $129 per share.
Sanofi
Market Capitalization: $117 billion
Morningstar Price/Fair Value: 0.76
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 4.08%
Morningstar Capital Allocation Rating: StandardIndustry: Drug Manufacturers—General
The third and final drugmaker on our list of blue-chip stocks to buy, Sanofi’s wide lineup of branded drugs and vaccines and robust pipeline create strong cash flows and a wide economic moat. Growth of existing products and new product launches should help offset upcoming patent losses, says Morningstar’s Conover. Sanofi’s existing product line boasts several top-tier drugs, including immunology drug Dupixent. A history of acquisitions and robust cash flow from operations mean Sanofi could take advantage of further growth opportunities through external collaborations. We expect the firm’s acquisition focus on immunology drugs and rare disease drugs will continue following several deals in this area. Sanofi stock trades 24% below our fair value estimate of $61 per share.
Re: 10 Best Blue-Chip Stocks to Buy April 2024
Nestle
Market Capitalization: $270 billion
Morningstar Price/Fair Value: 0.83
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 3.31%
Morningstar Capital Allocation Rating: StandardIndustry: Packaged Foods
Nestle is the largest food and beverage manufacturer in the world by sales. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle faces competition from local competitors, and past missteps have caused the firm to miss out on or be late to the latest consumer trends. However, current management has reversed past trends, says Morningstar senior analyst Ioannis Pontikis. Aside from structural cost-cutting efforts, the management team has successfully put a lot of weight on reinvigorating growth through active portfolio management, resetting legacy businesses, and further investment in high-growth categories (coffee, petcare, water, and nutrition). Nestle stock trades 17% below our fair value estimate of $124 per share.
Starbucks
Market Capitalization: $100 billion
Morningstar Price/Fair Value: 0.85
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 2.48%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Restaurants
Starbucks is the largest specialty coffee chain in the world, generating $36 billion in sales during fiscal 2023. Starbucks has increased its prices by 8% annually in the United States over the past five years. We expect the firm to have mid-single-digit unit growth through 2033 as Starbucks increases penetration in its core US and Chinese markets and with its license partners in more than 80 other global markets, says senior analyst Sean Dunlop. Starbucks’ ongoing investments in its loyalty program, with roughly 34 million active users in the US, clearly resonate with an audience that has grown increasingly amenable to digital ordering: 59% of US order volume is now driven by loyalty program participants. Starbucks stock is trading at a 15% discount to our fair value estimate of $105 per share.
Market Capitalization: $270 billion
Morningstar Price/Fair Value: 0.83
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 3.31%
Morningstar Capital Allocation Rating: StandardIndustry: Packaged Foods
Nestle is the largest food and beverage manufacturer in the world by sales. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle faces competition from local competitors, and past missteps have caused the firm to miss out on or be late to the latest consumer trends. However, current management has reversed past trends, says Morningstar senior analyst Ioannis Pontikis. Aside from structural cost-cutting efforts, the management team has successfully put a lot of weight on reinvigorating growth through active portfolio management, resetting legacy businesses, and further investment in high-growth categories (coffee, petcare, water, and nutrition). Nestle stock trades 17% below our fair value estimate of $124 per share.
Starbucks
Market Capitalization: $100 billion
Morningstar Price/Fair Value: 0.85
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 2.48%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Restaurants
Starbucks is the largest specialty coffee chain in the world, generating $36 billion in sales during fiscal 2023. Starbucks has increased its prices by 8% annually in the United States over the past five years. We expect the firm to have mid-single-digit unit growth through 2033 as Starbucks increases penetration in its core US and Chinese markets and with its license partners in more than 80 other global markets, says senior analyst Sean Dunlop. Starbucks’ ongoing investments in its loyalty program, with roughly 34 million active users in the US, clearly resonate with an audience that has grown increasingly amenable to digital ordering: 59% of US order volume is now driven by loyalty program participants. Starbucks stock is trading at a 15% discount to our fair value estimate of $105 per share.
Re: 10 Best Blue-Chip Stocks to Buy April 2024
Toronto-Dominion Bank
Market Capitalization: $104 billion
Morningstar Price/Fair Value: 0.85
Morningstar Style Box: Large Value
Trailing 12-Month Yield: 5.00%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Banks—Diversified
Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation’s banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the US, with the rest from other countries. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Morningstar analyst Michael Miller says Toronto-Dominion should remain one of the dominant Canadian banks for years to come. Toronto-Dominion has also established a significant presence in the US by having the most branches there among Canadian banks as well as a 12% ownership stake in Charles Schwab SCHW, Miller adds. Toronto-Dominion Bank stock is trading at a 15% discount to our fair value estimate of $69 per share.
Unilever
Market Capitalization: $121 billion
Morningstar Price/Fair Value: 0.86
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 3.86%
Morningstar Capital Allocation Rating: StandardIndustry: Household and Personal ProductsGlobal consumer product company Unilever rounds out our list of the best blue-chip stocks to buy for the long term. Unilever stock looks moderately undervalued to us, trading 14% below our fair value estimate. Global fast-moving consumer goods giants like Unilever still face competition from small, local, and more agile competitors. Decreasing investments in marketing, capital expenditure, and research and development have led to market share losses and a comparatively weak organic growth rate, which has caused the stock to underperform when compared with peers of similar stature and size, says Morningstar’s Pontikis. However, a new organizational structure around its business groups is a step in the right direction toward accountability, agility, and better execution. We think Unilever stock is worth $56 per share.
Market Capitalization: $104 billion
Morningstar Price/Fair Value: 0.85
Morningstar Style Box: Large Value
Trailing 12-Month Yield: 5.00%
Morningstar Capital Allocation Rating: ExemplaryIndustry: Banks—Diversified
Toronto-Dominion is one of the two largest banks in Canada by assets and one of six that collectively hold roughly 90% of the nation’s banking deposits. The bank derives approximately 55% of its revenue from Canada and 35% from the US, with the rest from other countries. With over CAD 400 billion in Canadian assets under management and top-three dealer status in Canada, and being the number-one card issuer in Canada, Morningstar analyst Michael Miller says Toronto-Dominion should remain one of the dominant Canadian banks for years to come. Toronto-Dominion has also established a significant presence in the US by having the most branches there among Canadian banks as well as a 12% ownership stake in Charles Schwab SCHW, Miller adds. Toronto-Dominion Bank stock is trading at a 15% discount to our fair value estimate of $69 per share.
Unilever
Market Capitalization: $121 billion
Morningstar Price/Fair Value: 0.86
Morningstar Style Box: Large Blend
Trailing 12-Month Yield: 3.86%
Morningstar Capital Allocation Rating: StandardIndustry: Household and Personal ProductsGlobal consumer product company Unilever rounds out our list of the best blue-chip stocks to buy for the long term. Unilever stock looks moderately undervalued to us, trading 14% below our fair value estimate. Global fast-moving consumer goods giants like Unilever still face competition from small, local, and more agile competitors. Decreasing investments in marketing, capital expenditure, and research and development have led to market share losses and a comparatively weak organic growth rate, which has caused the stock to underperform when compared with peers of similar stature and size, says Morningstar’s Pontikis. However, a new organizational structure around its business groups is a step in the right direction toward accountability, agility, and better execution. We think Unilever stock is worth $56 per share.