How do you know which shares are blue chip shares in the stock market?

Question

hi there

when doing company research on the stock market, how do you know which securities are actually blue chip ones. obviously theres the well known ones (in australia that is) like BHP, Woodside, NAB etc. but if you come across a random share how do you know if it is blue chip or a speculative share (high risk high return). like does it say somewhere in bold "this is a blue chip share" or something.

i am in yr 12 and am pretty knew to the share market thing but if anyone could help then it would be very much appreciated.

Answer 1

good question,

Any company that is in the Fortune 500 or a member of the Dow Jones is considered a "Blue Chip"

Answer 2

Look for members of the Dow Jones averages

Answer 3

Blue chips are shares of those companies which have an

1. excellent and proven  management

2.  leaders in their field of business

3. Have a track record of rewarding their investors with dividends and bonus shares

4. Continuous and consistent track record of growth in profits and turnover

5. Has large market capitalization (This means the total value of their stocks is huge )

6. A great project execution and implementation record

No. There is no official title on any stock which says it is a blue chip. But like you said everyone knows it is a blue chip because it is referred as such by media.

You can check out the track record of any random share , its past performance , its history of dividend payment, company profit growth and future prospects. This can give you an idea if it is future or potential blue chip. Even such companies are usually well known.

These are not high risk  high reward companies. But they give more assured and consistent reward to their share holders.

Hope this helps