Science Fair Project Encyclopedia
Blue chip
A blue chip stock is the description of the stock of well-established companies having stable earnings and no extensive liabilities. Most blue chip stocks pay regular dividends, even when business is faring worse than usual. They are valued by investors seeking relative safety and stability, though prices per share are usually high. Typically, such stocks are perceived to offer reliable returns, low-yield, and low-risk.
Alternately, blue chip stocks are sometimes defined as companies whose stocks have large market capitalization values (for example, over $1 billion.)
The term comes from the blue-colored disks, which are typically the most valuable, used in the game of poker.
Examples (as of 2004) are Shell (petroleum), Coca Cola (food) and IBM (IT).
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