What are Blue Chip Stocks?

Blue Chip Stocks refer to stocks of high value which give huge returns in the long run. They are shares of highly recognized and large companies which have proven record of sound financial output and standing. These stocks are highly priced as the tremendous goodwill as they are usually the market leaders in their industries. They are thus able to withstand tough market conditions and thereby give great returns. Oliver Gingold was the first to use this term in 1923.

Blue chip companies are recognised by many parameters like consistent revenue over a long period, debt to equity ratio, return on equity, price to earnings ratio etc. Some of the blue chip companies in India are State Bank of India, Reliance Industries, Bharti Airtel, Tata Consultancy Services, Coal India, ONGC, ITC etc.