The blue chips are companies that have a wide recognition, well – established and financially sound in the industry in which they operate.
Blue chip stocks can offer good returns to those who invest in the long run. However, some are quoted at higher prices, since they are from companies that are more solid and, therefore, are more valued in the market.
The English term refers to blue poker chips, which are the highest value and allow players to place higher bets.
Blue chip stock characteristics
Blue chip shares are traded on the stock market according to the reputation of the companies that own the shares.
These shares have high liquidity and low levels of volatility, as they are constantly traded. In the long run, they are moving towards a growth trajectory.
Blue chip companies are better able to control their debts, have good equity control and strong cash generation. The payment of dividends to shareholders can be part of the company’s history, depending on the articles of association.
Blue Chips at Bovespa
In Brazil there are companies that can be considered as blue chips, which manage to maintain high values in the Brazilian stock market.
Large companies operating in Brazil are listed on the B3, São Paulo stock exchange. The value of its shares count towards the Bovespa Index, the official indicator of the stock exchange.
The Ibovespa is an indicator that considers a portfolio with the most traded shares on the stock exchange. In the beginning it was formed by 18 blue chips and currently has more than 70 companies.
Among them, we can highlight some that have a large volume of shares traded and that have consistent financial stability.
Examples of blue chips on Bovespa
Oil, mining and steel
- Petrobras (PETR3 and PETR4) – oil
- Vale (VALE3) – mining
- Gerdau (GGBR4) – steelmaker
- CSN (CSNA3) – steel industry
- Usiminas (USIM5) – steel mill
Banks and financial institutions
- Banco do Brasil (BBAS3) – bank
- Itaú Unibanco (ITUB4) – bank
- Bradesco (BBDC3 and BBDC4) – bank
- Santander (SANB11) – bank
- B3 (B3SA3) – bag
Food or beverage industry
- Ambev (ABEV3) – drinks
- JBS (JBSS3) – food
- BRF SA (BRFS3) – food
- Lojas Renner (LREN3) – department
- Magazine Luiza (MGLU3) – electronics and furniture
- Via Varejo SA (VVAR3) – retail trade
- Lojas Americanas (LAME4) – retail trade
- Rumo SA (RAIL3) – freight transport
- Azul (AZUL4) – airline
These are some of the companies that are on B3 and on the Bovespa Index. The composition of the index can be followed on the B3 website.
In the American market, blue chips can be found on indices such as the Dow Jones Industrial Average. It includes companies like Coca-Cola, McDonald’s and General Electric.
Investors who wish to invest in a fund that tracks the stock index can purchase a share of an ETF fund. In Brazil, this fund is “BOVA11″.