Blue-chip stocks are the stocks of financially stable, well-established, and high-quality companies that are market leaders in their respective sectors. These companies have gone through various market phases and have weathered the storm of market volatility over the years, and hence, have gained the trust of shareholders and investors.
Blue-chip companies are generally expected to provide investors with regular dividend payouts and growth over time as these companies have a solid business plan, management, and market positioning. Most conservative investors start their equity investment journey with blue-chip companies as they are expected to be relatively stabler.