6 Cheap Blue-Chip Stocks to Buy Now

Volatile markets can be a blessing in disguise for bargain hunters of blue-chip stocks.

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Volatile markets can be a blessing in disguise for bargain hunters of blue-chip stocks. After all, name-brand companies don’t go on sale every day. If it takes inflation fears, presumptive trade wars or a whiff of scandal to get good stocks at great prices, so be it.

But how do you find such blue-chip bargains? One way is to key on some fundamental valuation measures. Any time a big, quality name is trading at a price-earnings multiple that doesn’t adequately reflect it earnings growth prospects, you have a potentially cheap stock on your hands. Put another way: If a stocks trades at 15 times estimated earnings, but analysts forecast those same earnings to grow at an average of, say, 25% a year for the next five years, something’s up.

Now, it could be that whatever’s up is not good. Sometimes a stock is cheap for a reason. Perhaps it represents equity ownership in a virtual Dumpster fire, for example. When it comes to quality blue-chip stocks, however, there’s a chance the market is simply giving a patient, long-term investor a break on price.

Here are some big-name blue-chip stocks we found that aren’t quite trading up to their growth prospects. They might be cheap for now, but they probably won’t stay that way for long.

Disclaimer

Data is as of March 13, 2018. Companies are listed in alphabetical order. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Analysts’ ratings provided by Zacks Investment Research. Click on ticker-symbol links in each slide for current share prices and more.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.


A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.


Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.


In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.


Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.


Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.