Equity investors have had a wild ride so far in 2025. The broad market S&P 500 came out of the gate strong, rising 3.2% from its 2024 close of 5,919.74 to its Feb. 19 intra-year high of 6,111.15. Wall Street, however, wasn’t sold on President Trump’s hawkish trade policy and began to sell off in anticipation of possible supply chain disruptions that could result from the tariffs the president was promoting. By April 8, fears of a full-blown global trade war had driven the market down 18.5% from its February high to its year-to-date low close of 4,982.77. Since then, the president has paused his proposed tariff regime and become more conciliatory on trade. The market has reacted with erratic but steady upward progress to close at 5,659.91 on May 9, almost 14% up off the lows.
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In volatile and unpredictable markets like the one we’ve seen in the first quarter of this year, investors will often pare back on risk and take a more conservative approach. That might mean avoiding aggressive securities and increasing allocations to safe assets like Treasury bills or money market funds. The phenomenon is called a flight to safety and, in terms of equity investing, it often involves taking profits from high-flying growth stocks and refocusing on blue-chip names.
Investors understand that while blue-chip stocks aren’t necessarily Wall Street’s next big thing, they are proven long-term winners. Blue-chip stocks represent well-established, financially sound companies that have stood the test of time. They’ve usually been in business for many decades and have demonstrated an ability to thrive in all kinds of markets and economic conditions.
Like all stocks, blue chips have their ups and downs, but generally, they’re profitable companies dedicated to creating shareholder value. Many blue-chip stocks pay annual dividends, as well. Dividends are a tangible way for investors to share in the revenue and earnings a company generates every quarter, and they can help hedge against the rising cost of living.
There are always good reasons to hold blue-chip stocks, and the reasons only increase in turbulent, unpredictable markets. Some experts believe that blue-chip companies should be the core or anchor of any equity portfolio. If the idea of owning blue-chip stocks appeals to you in today’s market environment, this list will be of special interest. The included companies are well-known to investors and are, by many measures, undervalued by some Wall Street analysts:
| Blue-Chip Stock | Year-to-date Performance* | Market Capitalization* |
| Colgate-Palmolive Co. (CL) | -0.1% | $72 billion |
| Emerson Electric Co. (EMR) | -8.8% | $67 billion |
| General Dynamics Corp. (GD) | 4.2% | $73 billion |
| Procter & Gamble Co. (PG) | -4.8% | $376 billion |
| PepsiCo Inc. (PEP) | -13.5% | $180 billion |
*As of March 9 close.
Colgate-Palmolive Co. (CL)
CL is down 0.1%, or essentially flat year to date as of May 9 close. Despite that uninspiring recent performance, BofA Equity Analyst Bryan Spillane is bullish on the stock. Spillane believes the company’s dominant market share, geographic depth and aggressive growth stance will benefit it even in challenging economic times. BofA’s 12-month price objective for CL is $110, representing a potential upside of more than 20% from its May 9 closing price of $89.81. The stock’s current yield of 2.3% could further enhance the stock’s total return.
Colgate-Palmolive is famous for manufacturing and selling detergents, soaps, oral hygiene products and home care items. The company is also prominent in the pet and livestock food industry. The wide diversity of its product lines and its status as a blue-chip company will help CL generate an estimated $20 billion in revenue in fiscal 2025 and $21 billion in 2026, a 5% annual revenue growth rate.
Colgate-Palmolive is a global firm with operations in North America, Latin America, Europe, Asia and Africa. The company has a market cap of $72 billion.
Emerson Electric Co. (EMR)
EMR is a blue-chip electrical parts manufacturing company in the industrials sector. The company was founded 135 years ago in 1890, and has been publicly traded since 1947. EMR makes electrical tools, gauges, valves, switches and has recently started developing electrical engineering software to complement its mechanical products.
The stock is down 8.8% year to date, but some analysts believe there is significant value in the name. CFRA Equity Analyst Jonathan Sakraida, for instance, has a “buy” rating on the stock and gives it four out of five stars on CFRA’s proprietary star system. Sakraida’s price target for EMR is $135, representing 9.4% upside potential from its May 9 close of $123.41.
EMR pays an annual forward dividend of $2.11, which works out to a current yield of 1.9%. EMR is one of only about 65 stocks that have increased dividends every year for at least 50 consecutive years. The company’s market cap stands at $67 billion.
[READ: 7 Best Actively Managed ETFs to Buy Today]
General Dynamics Corp. (GD)
General Dynamics has been a mainstay in the defense industry for many decades. This blue-chip company was founded in 1899 and has a market capitalization of $73 billion. It engineers and manufactures fighter jets, nuclear submarines, and armored fighting vehicles for the U.S. military and other friendly nations. It has a significant presence in the civilian aviation industry as well. The company’s Gulfstream line of private jets is very popular with businesses and ultra-high-net-worth individuals.
The stock’s performance had been disappointing over the previous 12 months or so, but that changed in early April as Wall Street came to realize that General Dynamics was not going to be greatly affected by President Trump’s aggressive tariff policies. Year to date, GD is beating the S&P 500 handily. As of May 9, the S&P has dropped 3.8% while GD has appreciated by 4.2%.
TD Securities, Citigroup, BofA Securities, Morningstar and CFRA all have a “buy” rating on the stock. Additionally, GD is a consistent dividend payer with a current yield of 2.2%. The company’s market cap sits at $73 billion.
Procter & Gamble Co. (PG)
Founded in 1837, PG has been considered a blue-chip stock for many decades. The company is a component of both the Dow Jones Industrial Average and the S&P 500. Procter & Gamble is one of the world’s leading global consumer products companies. Its brand portfolio included iconic names like Tide, Pampers, Gillette, Crest, Charmin and many more. The mission of Procter & Gamble is to improve the lives of its customers by providing superior products and to create value for shareholders through intelligent growth and financial stability.
PG consistently generates more than $20 billion a quarter in global sales. The company’s financial strength has allowed it to increase its dividend for 69 consecutive years. The current annual payout stands at $4.23, which equates to a current dividend yield of 2.7%.
The stock has depreciated 4.8% year to date as of May 9, but some Wall Street pros feel like great value has been created as the stock has fallen. Both BofA Securities and CFRA rate the stock “buy,” along with Truist Securities and Citigroup. RBC Capital and Raymond James have an “outperform” rating on the name.
PepsiCo Inc. (PEP)
PepsiCo is a 127-year-old company that was founded in 1898 as a direct competitor to the Coca-Cola Co. (KO). Since then, PEP has been a worthy rival to KO, and has grown into one of the world’s largest beverage and prepared snacks companies. PEP has a market cap of $180 billion and pays a current dividend yield of 4.3%.
No one at the company or on Wall Street is happy with the recent performance of this blue-chip stock. The company is down 13.5% year to date and has dismal 12-month total return numbers. Yet, there may still be a legitimate investment rationale for buying this stock.
PepsiCo owns an impressive portfolio of brands that include Pepsi, Mountain Dew, Gatorade, Tropicana, Aquafina, 7UP, Lipton, Doritos, Cheetos, Ruffles, Tostitos, Fritos, Quaker Oats and many more. And that’s to say nothing of the North American Coffee Partnership it maintains with Starbucks Corp. (SBUX), which has a 90% market share in the prepared coffee market in North America. This stock will have its ups and downs, but those brands will remain market leaders and may eventually be the catalyst for the stock recouping value for shareholders.
PepsiCo has challenges to overcome, but management is committed to executing a successful turnaround and it has seen challenging times before. Aggressive investors with a long-term time horizon may want to consider this undervalued blue-chip stock.
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Update 05/12/25: This story was published at an earlier date and has been updated with new information.
