What is a common characteristic of blue chip stocks?

Blue chip stocks are characterized by their association with well-established companies that have a history of stable earnings and strong financial performance. These companies are often leaders in their respective industries and have demonstrated resilience during economic downturns. The stability and reliability of their earnings make blue chip stocks generally considered lower-risk investments compared to more volatile stocks.

Investors are attracted to blue chip stocks because they can offer potential for both capital appreciation and regular dividends. This steady performance is contrasted with higher-risk investments and sectors that might not provide the same level of financial security. Thus, the defining feature of blue chip stocks lies in their established presence in the market and their ability to generate consistent profits over time.