Blue chip companies have an established reputation, popularity and secure long-term growth, according to the U.S. Securities and Exchange Commission. These companies provide blue chip stocks that the Dow Jones Industrial Average uses in its index, according to the U.S. Securities and Exchange Commission.
Duke University explains that stocks from blue chip companies offer a lower risk for investors. Examples of blue chip companies include General Electric and Procter & Gamble. Economics Help details that these well-known brands often are multinational companies.
Blue chip companies also engage in market capitalization, which the U.S. Securities and Exchange Commission defines as a company’s worth by an assessment of market prices and the shares of stock available.