Blue chips have always been coveted stocks yet they are that much more in-demand amidst times of uncertainty. These proven businesses sell what the public needs and wants during the good times and the bad. Though blue chips are not exactly the same safe havens as gold and other precious metals, they pose minimal risk compared to most other stocks. Microsoft, NVIDIA and Texas Instruments are three blue chip value stocks worthy of your attention – and possibly your investing dollars – during and after the coronavirus pandemic.
Computers have never been more important. More and more people are working and learning from home, meaning MSFT products hold that much more value. There will likely be a strong demand for MSFT products and services for years, if not decades or even centuries into the future.
Check out MSFT’s POWR Ratings and you will find As across the board. It really is that difficult to find any flaws in this superstar stock. In fact, the POWR Ratings have MSFT ranked #1 of more than 80 stocks in the software category.
TipRanks’average analyst price target for MSFT is just under $200 with 21 analysts recommending investors buy the stock, one recommending a hold and none advising shareholders to sell. Indeed, MSFT is likely to return to its 52-week high of $190 and change in the weeks to come simply because the company’s products and services are of the utmost importance in our tech-focused economy. Microsoft Teams is poised to gain that many more subscribers as the remote working trend goes mainstream.
If you are hesitant to hop on board MSFT, take a look at its two-month chart. The stock undulated on a weekly basis since its freefall in mid-March yet every dip gave way to a subsequent spike, showing there is pent up demand for this blue chip stock.
If MSFT meets the Zacks’ consensus estimate for ’20 fiscal earnings, the company will enjoy nearly 13% growth from the reported figure just a year prior. It is clear MSFT is a winner that belongs in every investor’s portfolio.
The best investors do not hesitate to revert back to blue chip technology stocks when times get tough. Businesses and consumers alike need and desire computing equipment to function in the 21st century. NVDA provides the graphics and communications processing technology necessary for computers of all types to function with clarity, efficiency and aesthetic beauty.
In particular, NVDA’s graphics processors are implemented in computers used for gaming. Gaming was fairly mainstream prior to the coronavirus pandemic. Now that the masses have been quarantined for months, gaming has absolutely saturated the mainstream. Even members of the baby boomer cohort are playing games out of sheer boredom as there is not much else to do. This means NVDA’s graphics processors are that much more in demand and will likely continue to be coveted as more and more people delve into gaming.
NVDA GPUs are developing traction in the AI realm across a litany of industries so it should come as no surprise that NVDA is rated as an A or Strong Buy in the POWR Ratings. This darling has As in every category from Trade Grade to Peer Grade and Buy & Hold. The icing on the cake is the fact that the POWR Ratings have NVDA ranked #1 of the 86 stocks that comprise the semiconductor and wireless chip segment.
Disregard NVDA’s forward P/E ratio of 41 for the moment. Square your focus on the fact that NVDA generated more than $4 billion in free cash flow in the prior fiscal year, elevating its cash position to just under $11 billion. This means NVDA has the cash necessary to strategically pivot however desired and ultimately maintain industry dominance across posterity.
Texas Instruments (TXN)
The semiconductor industry is likely to hold strong regardless of the recession’s length. Semiconductors are an absolute necessity for businesses and consumers alike. TXN will undoubtedly be just as busy as ever as people and businesses purchase that many more computers and computing-related items in the never-ending push toward heightened efficiency and profitability.
Even if consumer spending on personal electronics tails off, TXN won’t suffer greatly as it has exposure in industrial, enterprise systems, communications and automotive markets. TXN executives should be praised for converting nearly half of its revenue from the prior year into free cash flow. The company held in excess of $5 billion in cash reserves at 2019’s end.
Though TXN has a C POWR Rating, it scores well with a B Peer Grade and B Industry Rank grade. Furthermore, the analysts are adamant TXN has at least 8% upside at its current price.
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MSFT shares closed at $183.16 on Friday, up $2.63 (+1.46%). Year-to-date, MSFT has gained 16.46%, versus a -10.53% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…