Blue-chip stock

A large, well-established company with a long record of stable operations.

Definition

Blue-chip is an informal label for big, financially sound companies that are leaders in their industries and often pay dividends. There is no official list. The term comes from the highest-value chip in poker.

Watch out for

Being a blue chip does not protect a stock from large declines. Size and reputation are not the same as a low price.

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