From Morningstar: 2024-12-20 09:15:20

Blue-chip stocks are popular with investors due to their financial stability, brand recognition, and consistent dividends. Morningstar’s list of the best blue-chip stocks for long-term investment includes companies with wide economic moats, undervalued stocks, and market caps over $100 billion. Top picks for December 2024 include Anheuser-Busch InBev, Pfizer, Roche, Nike, Nestle, Sanofi, Danaher, Merck, Thermo Fisher Scientific, and Bristol-Myers Squibb.

Anheuser-Busch InBev is the most undervalued company on the list, trading 42% below Morningstar’s fair value estimate of $90 per share. The brewer has a strong cost advantage and efficient operations, with a strategy focused on acquiring brands with growth potential and expanding distribution.

Pfizer, a leading drug manufacturer, offers the highest trailing yield among the healthcare companies on the list. Trading at a 40% discount to its fair value estimate, Pfizer has strong cash flows from diverse drugs and significant competitive advantages in drug development.

Roche, a Swiss healthcare giant, trades 35% below Morningstar’s fair value estimate of $55 per share. The company’s leading drug portfolio and diagnostics provide competitive advantages, positioning it for continued growth and innovation in the healthcare industry.

Nike, a dominant athletic footwear brand, is one of the top nonhealthcare companies on the list. Despite challenges in key markets like China, Nike remains a leader in the athletic apparel market with a strong consumer plan and growth opportunities in emerging markets.

Nestle, the largest food and beverage manufacturer globally, is undergoing a revitalization under current management. The company’s strategy focuses on cost-cutting, portfolio management, and investment in high-growth categories, positioning it for future growth and success.

Sanofi, a drug manufacturer with a robust pipeline and strong cash flows, is well-positioned for growth despite upcoming patent losses. The company’s focus on immunology and rare disease drugs, along with strategic acquisitions, enhances its growth potential in the pharmaceutical industry.

Danaher, a medical technology company, recently received an upgraded moat rating from Morningstar due to its differentiated technology and strategic acquisitions. With a focus on attractive markets and divesting non-core assets, Danaher is a key player in the life science and diagnostic tool markets.

Merck, known for its high-margin drugs and pipeline of new products, is poised for strong returns on invested capital. The company’s R&D productivity is improving, and new products like Keytruda for cancer offer significant growth potential despite patent losses.

Thermo Fisher Scientific, a premier life science supplier, is weathering global biopharmaceutical spending challenges better than peers. With a diverse portfolio of products and strong long-term demand, Thermo Fisher is well-positioned to capitalize on future growth opportunities.

Bristol-Myers Squibb, a leader in partnerships and acquisitions, has a strong portfolio of drugs and a robust pipeline. The company’s focus on expanding through challenging patent losses and strategic partnerships positions it for future growth and success in the pharmaceutical industry.



Read more at Morningstar: 10 Best Blue-Chip Stocks to Buy for the Long Term