10 Best Blue-Chip Stocks to Buy for the Long Term

Investors often hold blue-chip stocks at the core of their portfolios. That makes sense. After all, blue-chip companies are leaders in their industries. Their names are familiar to investors.

What Are Blue-Chip Stocks?

Blue-chip stocks are from companies that are large, well-established, and financially sound. These companies have strong brand names and reputations, and they generate dependable earnings. Blue-chip companies usually boast consistent dividends and are often considered less risky, given their financial stability.

However, investors may differ in how they define blue-chip companies. Some investors demand that a blue-chip stock be included in a particular index, such as the Dow Jones Industrial Average. Others may include only dividend-paying companies on their lists of blue-chip stocks. Still others may have specific market-cap thresholds for blue-chip companies.

10 Best Blue-Chip Stocks to Buy for the Long Term

These are the largest firms by market cap on Morningstar’s Best Companies to Own list whose stocks were the most undervalued as of Oct. 12, 2026.

1. Sony Group SONY
2. SAP SAP
3. Lowe’s LOW
4. PepsiCo PEP
5. Charles Schwab SCHW
6. S&P Global SPGI
7. Lockheed Martin LMT
8. Alphabet GOOGL
9. Bristol-Myers Squibb BMY
10. Bank of America BAC

To come up with our list of the best blue-chip stocks to buy for the long term, we screened for:

• Stocks from companies included on Morningstar’s list of the Best Companies to Own. Companies on this list have wide
  Morningstar Economic Moat Ratings
  and predictable cash flows, and they are run by management teams that make smart capital-allocation decisions.
• Stocks that are undervalued, as measured by our price/fair value metric.
• Companies with market caps above $100 billion.

Here’s a little more about each of these blue-chip stocks for the long term, including commentary from the Morningstar analysts who cover each company. All data is as of Oct. 12, 2026.

Sony Group

• Morningstar Price/Fair Value: 0.71
• Market Capitalization: $140.9 billion
• Forward Dividend Yield: 0.65%
• Industry: Consumer Electronics

Consumer electronics firm Sony Group is the most affordable stock on our list of the best blue-chip stocks to buy. Sony Group is a conglomerate with consumer electronics roots, which not only designs, develops, produces, and sells electronic equipment and devices, but also is engaged in content businesses, such as console and mobile games, music, and movies. The stock is trading 29% below our fair value estimate of $34 per share.

As technologies and consumer preferences change rapidly, it is generally difficult for consumer electronics companies to build an economic moat. The replacement cycle for digital appliances is usually four to six years, but as most products are commoditized, it is difficult for manufacturers to build an ecosystem that prevents customers from switching to other brands. As a result, Sony’s profitability in electronics has been unstable in the past, while its music, movies, and financial-services businesses have generated solid results.

Over the past decade, Sony has transformed its business model to enable more solid and stable growth by reducing the volatility of the consumer electronics business and by aggressively investing in acquiring content for its entertainment businesses such as music, movies, and games.

In the consumer electronics business, profits are generated from digital cameras and audio equipment, where Sony has strengths, while the TV business is thoroughly focused on avoiding losses by focusing on premium products and strictly managing inventories.

In the music and movie businesses, Sony has been able to seize growth opportunities, such as the expansion of the streaming market, by expanding its content and exploring new artists.

The image sensor business has the largest global market share. The majority of sales come from the mobile market, which is benefiting from the strong demand for improved image quality in smartphone cameras. However, unlike the entertainment businesses, image sensors require high capital investment and research and development, and with such high fixed costs, we believe the profitability of the business is not high enough.

PlayStation is Sony’s largest revenue-generating business. While user migration from PS4 to PS5 is progressing well, rising game development costs and competition from other platforms such as Steam are becoming a concern for the business.

Read more about Sony Group here.

SAP

• Morningstar Price/Fair Value: 0.72
• Market Capitalization: $251.5 billion
• Forward Dividend Yield: 1.34%
• Industry: Software—Application

Founded in Germany in 1972 by former IBM employees, SAP is the world’s largest provider of enterprise application software. This cheap stock looks 28% undervalued and has a fair value estimate of $302 per share.

SAP is the world’s largest provider of enterprise application software and global market leader in enterprise resource planning software. The company earns revenue by selling subscriptions for its various cloud-based software-as-a-service products as well as licenses and maintenance fees for on-premises software, which are now being largely phased out. Besides its core ERP products such as S/4HANA, SAP offers well-known back-office software products such as Concur for travel and expense management and Ariba for procurement.

The company was late to the cloud for ERP software but now offers two compelling products: RISE with SAP, which is the private-cloud edition designed for SAP’s large enterprise customers that are transitioning from their SAP on-premises ERP (ECC) to SAP S/4HANA; and GROW with SAP, which is the public cloud edition that is designed for midmarket companies with less complex requirements. We think GROW with SAP fills an important void in SAP’s product offering, as previously SAP’s ERP software was often unattractive to smaller customers given the implementation costs were just too high. With the launch of these new products, cloud revenue is growing swiftly, and SAP is capturing many new midmarket customers.

SAP is following a land-and-expand strategy, which is common in the enterprise software market. RISE with SAP and GROW with SAP are the land products, after which the company then upsells and cross-sells more SAP products to these customers, which is much easier in a cloud-based model. The company has yet to release its latest long-term ambitions but expects revenue growth to accelerate at least through 2027, along with rising margins as the cloud business reaches efficient scale.

Read more about SAP here.

Lowe’s

• Morningstar Price/Fair Value: 0.73
• Market Capitalization: $104.1 billion
• Forward Dividend Yield: 2.69%
• Industry: Home Improvement Retail

Next on our list of the best blue-chip stocks to buy is Lowe’s. Lowe’s is the second-largest home improvement retailer globally, with 1,761 stores in the US after the 2023 divestiture of its Canadian locations. The stock is trading at a 27% discount to our fair value estimate of $255 per share.

Lowe’s is the second-largest home improvement retailer globally, set to capture around $92 billion in sales in fiscal 2026. With a perpetual focus on retail fundamentals (merchandising, operational efficiency, supply chain improvements, omnichannel shopping experience, and customer engagement), Lowe’s has been able to manage costs while maintaining its low-cost position. The firm retains some of its cost savings and passes the rest on to its customers through everyday low prices, creating a flywheel effect. Intangible asset and scale-based cost advantages support a wide moat.

After Marvin Ellison took the helm in 2018, a full overhaul of Lowe’s C-suite, board, and merchandising team ensued. The team implemented a perpetual productivity plan, which has led to gains in profit margin. Thanks to the institutionalization of processes that were inefficient and the divestiture of underperforming lines, we expect Lowe’s adjusted operating margin to reach 11.6% in 2026, up from 9.1% in 2019. We think operational and cultural changes position Lowe’s for more consistent returns ahead.

Lowe’s updated its long-term financial goals in December 2024, targeting yearly operating margin and ROIC improvement of 30 basis points and 50 basis points, respectively, beginning in 2026. However, we expect this to be sidetracked in 2026 by the acquisition of Foundation Building Materials, which, while driving faster sales growth, will drag on return on invested capital and profit margin. The firm is also facing transitory near-term headwinds, including a cautious consumer on the sales side and inflationary costs (fuel, transportation) on the expense side, along with elevated mortgage rates.

We think Lowe’s operating margin and ROIC expansion goals are reasonable in the long term, given the structural changes that have occurred, once the home spending environment normalizes. In our opinion, aging housing stock and continued demand for professional home repair services set the firm up for further sales growth and cost leverage, bolstered by continuous process upgrades to better serve pros. Additionally, Lowe’s still has opportunities in underserved categories, like pet and workwear.

Read more about Lowe’s here.

PepsiCo

• Morningstar Price/Fair Value: 0.75
• Market Capitalization: $172.6 billion
• Forward Dividend Yield: 4.67%
• Industry: Beverages—Non-Alcoholic

PepsiCo is a global leader in snacks and beverages, owning well-known household brands including Pepsi, Mountain Dew, Gatorade, Lay’s, Cheetos, and Doritos, among others. This cheap stock looks 25% undervalued and has a fair value estimate of $169 per share.

PepsiCo’s tight retail relationships on the back of strong beverage and snack brands, coupled with massive distribution and procurement scale, underpin our wide moat rating, and we foresee this position as unwavering. For one, we see Pepsi’s snack lineup as well placed to bolster its share by leveraging unrivalled brand awareness, operational scale, and retail relations. Within its beverage mix, the firm is exploring a variety of options from nascent, in-house brands to brand licensing from third-party category leaders to expand its sales exposure in nonsparkling categories. This can add to the firm’s distribution clout and augment its carbonated drinks that have struggled thus far to narrow the gap with wide-moat Coca-Cola.

Growth has stalled over the past two years, which we attributed to sluggish performance in the North America snack business amid demand challenges and cost inflation. This more than offset steady mid-single-digit organic sales expansion internationally as the firm invests more to tap rising demands in Latin America, Asia, and Africa. To reinvigorate growth in North America and reinforce long-term competitive positioning, we believe the firm has prioritized health-focused product innovation, increased investment in value offerings and digital marketing for better consumer engagement, in addition to pruning its portfolio to sharpen the focus on core offerings. The strategic roadmap looks cogent, although we think execution will be key to the turnaround and the initiatives to take time to bear fruit.

Longer term, while we think demand for PepsiCo’s food and beverage products tends to be resilient throughout economic cycles, risks and uncertainties nonetheless abound. The firm faces challenges that include the inroads from e-commerce and hard discounters that introduce more competition and disrupt the pricing structure, and consumption pattern shifts driven by a more mobile lifestyle and higher health awareness. That said, a nimble and pragmatic approach, coupled with inherent brand prowess and manufacturing/distribution scale, should enable the firm to navigate the evolving competitive landscape while enhancing its returns.

Read more about PepsiCo here.

Charles Schwab

• Morningstar Price/Fair Value: 0.78
• Market Capitalization: $167.8 billion
• Forward Dividend Yield: 1.32%
• Industry: Capital Markets

Charles Schwab is one of the largest retail-oriented financial services companies in the US, with $11.9 trillion in client assets across its brokerage, banking, asset management, custody, financial advisory, and wealth management businesses at the end of 2025. The stock is trading at a 22% discount to our fair value estimate of $124 per share.

Charles Schwab’s strategy rests on three pillars: deepening client relationships, leveraging scale to drive efficiency, and delivering on what the company calls the brilliant basics. We view this as an appropriate approach.

Schwab has done an excellent job over the years in deepening its customer relationships by building a robust, intuitive trading and advisory platform with an ever-expanding menu of services. From its roots as a retail brokerage, Schwab has expanded into mutual fund distribution, proprietary and low-cost asset management products, lending, retirement accounts, and most recently, wealth management. As a result, it has emerged as a premier asset gatherer in the industry, with 5%-6% annual organic net asset growth over the past decade (adjusted for TD Ameritrade), driving its total client assets to $11.9 trillion at the end of 2025.

With Schwab servicing just 40%-45% of customer assets, by our estimates, we see plenty of runway for future growth as it adds in-demand products such as alternative-investment products and cryptocurrency trading and continues to expand its still-small loan book, encouraging clients to consolidate their financial lives with Schwab. Its attention to the brilliant basics affords Schwab the ability to credibly introduce new products and organically increase its scale.

As we see it, increasing scale and reducing cost to serve is critical in a financial-services industry that continues to see fee compression as transparency and the availability of low-cost alternatives increase. Schwab drove its expense/client assets ratio down to just 0.12% during the most recent fiscal year, head and shoulders above the 0.47% and 0.37% average among its online brokerage and wirehouse competitors, respectively (by our calculations). Maintaining its position as a low-cost operator will be essential. The addition of new products allows Schwab to spread investments across a broader base of assets in a way that higher-cost peers simply cannot, entrenching its competitive edge.

Overall, Schwab’s best-in-class efficiency and attractive product suite position the firm well to continue to gain market share in a competitive financial-services industry.

Read more about Charles Schwab here.

S&P Global

• Morningstar Price/Fair Value: 0.79
• Market Capitalization: $121.5 billion
• Forward Dividend Yield: 0.94%
• Industry: Financial Data & Stock Exchanges

S&P Global provides data and benchmarks to capital and commodity market participants. This cheap stock looks 21% undervalued and has a fair value estimate of $525 per share.

Whether through credit ratings, financial indexes, or commodity price reporting, S&P Global has established a wide moat from its data-driven benchmarks. Given the embedded nature of these benchmarks, S&P enjoys a strong competitive position and strong operating margins. In February 2022, S&P completed its $44 billion acquisition of IHS Markit. We believe IHS Markit’s recurring revenue model diversified S&P’s revenue but also limited revenue upside. We note that much of IHS Markit has been divested or spun off, such as Engineering Solutions, OSTTRA, and Mobility Global.

Bond issuance volume is a key revenue driver for S&P’s ratings business, which makes up almost 45% of the firm’s adjusted operating income. Over the long term, we believe high-single-digit revenue growth, driven by nominal GDP growth and pricing, is a reasonable expectation for this business. Regulatory issues are part of the backdrop of the firm’s ratings business, but regulations can often benefit established players.

S&P’s other segments include market intelligence (22% of adjusted operating income), S&P Dow Jones indexes (18%), and energy (16%). While this business is moaty, in our view, we see limited synergy with S&P’s other segments. Market intelligence revenue is recurring but faces stout competition from other providers such as Bloomberg, LSE Group (Refinitiv), and FactSet. The indexes segment revolves around the S&P 500 and is monetized from index subscriptions to active asset managers, license fees for passive exchange-traded funds and mutual funds, and royalties from exchange-traded options and futures. Energy consists of S&P’s legacy Platts business and IHS Markit’s resources segment.

After spinning off its education business in 2013 and rebranding to S&P Global from McGraw Hill Financial, the firm has focused on expanding margins. Adjusted operating margin rose to 55% in 2021 from 34% in 2013, driven by streamlining operations and operating leverage, with strong interim revenue growth. However, given the inclusion of IHS Markit, which had some lower-margin businesses, we expect S&P Global’s adjusted operating margins to normalize to the low- to mid-50s, below historical peaks.

Read more about S&P Global here.

Lockheed Martin

• Morningstar Price/Fair Value: 0.79
• Market Capitalization: $118.1 billion
• Forward Dividend Yield: 2.81%
• Industry: Aerospace & Defense

Lockheed Martin is the world’s largest defense contractor and has dominated the Western market for high-end fighter aircraft since it won the F-35 Joint Strike Fighter program in 2001. The stock is trading at a 21% discount to our fair value estimate of $650 per share.

Lockheed derived nearly 72% of its $75 billion in 2025 sales servicing contracts from the US military, with the largest annual budget on Earth, and stands to operate the largest defense procurement program ever awarded (F-35) through the 2060s. Thus, as a bet on the defense industry, Lockheed is hard to beat. Biggest isn’t always best, but Lockheed (and investors) benefit from the sheer scale of its tens of billions of dollars of contracts that provide defined decadeslong revenue and profit streams.

Lockheed should benefit from recent and foreseeable increases in US defense spending, driven by the Pentagon’s goal to modernize the military’s ability to counter aggression from multiple so-called great power rivals, namely China and Russia, while also managing threats from terrorism and hot spots like Iran and North Korea.

Defense budgets usually ebb and flow with a nation’s wealth and its perception of danger. In the US, both have been on the rise, and among many allies, notably NATO countries as well as Korea and Japan, geopolitics is leading to larger military budgets than we’ve seen for decades. For perspective, we estimate that the portions of the US defense budget relevant to contractors like Lockheed and its many subcontractors shrank between 2011 and 2016 by 3.7% annualized while these budgets grew between 2016 and 2024 by 5.8% annualized. We think the contractors’ budget will continue to grow with modernization and robust demand from the Trump administration in the near term but should moderate to around 2.5%-3.0% growth over the long term.

We think Lockheed Martin’s exposure to the F-35 program, hypersonic missiles, and the militarization of space aligns it well with areas of spending prioritized in the US defense budget. In the current environment, though, the constraint on the defense sector’s opportunity is not access to defense spending or the size of budgets, but rather the ability to deploy enough skilled employees (often requiring security clearance) and specialized components and materials (that are lately in short supply) to execute the programs on time and on budget.

Read more about Lockheed Martin here.

Alphabet

• Morningstar Price/Fair Value: 0.81
• Market Capitalization: $4.3 trillion
• Forward Dividend Yield: 0.25%
• Industry: Internet Content & Information

Alphabet is a holding company that wholly owns internet giant Google. The stock is trading at a 19% discount to our fair value estimate of $433 per share.

We view Alphabet as a conglomerate of stellar businesses. With solutions ranging from advertising to cloud computing and self-driving cars, Alphabet has built itself into a true behemoth, generating tens of billions of dollars in free cash flow annually. While antitrust concerns around Alphabet’s core search business have made headlines, we retain our confidence in Alphabet’s overall strength and foresee the firm remaining at the forefront of a variety of verticals, including search, artificial intelligence, video, and cloud computing.

Alphabet’s core strategy is to preserve its strong advertising business, with the majority of advertising revenue coming from Google Search. To that end, the firm has invested considerably over the years to improve its search capabilities, ensuring that its search engine remains deeply embedded in how hundreds of millions of users access information on the web.

We see the firm’s investments in AI as a continuation of this effort to safeguard its core product, Google Search. We believe that by leveraging generative AI, Google can not only improve its own search quality via features such as AI overviews, but also improve its advertising business by augmenting its ability to target customers with relevant ads.

On the antitrust front, we don’t foresee a material deterioration in Google’s search business resulting from governmental or judicial intervention. While there is a range of possible outcomes depending on what remedial steps are imposed, we think it is likely that Google will maintain its leadership position in search and text-based advertising in the long term.

Beyond search, we have a positive outlook on Alphabet’s cloud computing platform, Google Cloud Platform. We believe increased migration of workloads to the public cloud and an uptick in the deployment and usage of AI are key growth drivers for GCP over the next five years. At the same time, we believe that as GCP scales, it will become a more important part of Alphabet’s overall business, both from a top-line and profitability perspective.

Read more about Alphabet here.

Bristol-Myers Squibb

• Morningstar Price/Fair Value: 0.82
• Market Capitalization: $117.6 billion
• Forward Dividend Yield: 4.38%
• Industry: Drug Manufacturers—General

Bristol Myers Squibb discovers, develops, and markets drugs for therapeutic areas such as cardiovascular, cancer, and immune disorders. The stock is trading at an 18% discount to our fair value estimate of $70 per share.

Adept at partnerships and acquisitions, Bristol-Myers Squibb has built a strong portfolio of drugs and a robust pipeline. This strategy is evident in the acquisition of Celgene, which netted the firm an excellent pipeline and a strong foothold in blood cancer. More recent acquisitions—oncology firms Mirati and RayzeBio and neurology firm Karuna—also help support Bristol’s strong overall pipeline and wide moat.

The acquisition of Medarex in 2009 helped secure Bristol’s strong first-mover advantage in cancer immunotherapy, bringing rights to novel antibodies against PD-1 (Opdivo) and CTLA-4 (Yervoy) used in melanoma as well as other cancers, including lung and kidney cancers. A newer combination drug, Opdualag, is also approved in melanoma, with ongoing trials in lung cancer. Competition from Merck’s market-leading PD-1 inhibitor Keytruda and a 2028 US patent expiration for Opdivo are clear headwinds. However, recently approved subcutaneous Opdivo Qvantig will help slow sales declines, buying time for Bristol’s pipeline to advance. BioNTech-partnered pipeline program pumitamig is in phase 3 testing in certain forms of breast and lung cancers and could be an early mover among new, bispecific immunotherapy drugs.

Bristol is aggressively repositioning itself to expand through challenging patent losses for drugs representing the majority of its sales. These include cancer drugs Revlimid and Pomalyst by 2026 and cardiovascular drug Eliquis (marketed with Pfizer) in 2028. The 2019 Celgene acquisition moved Bristol deeper into blood-related disease, which tends to be an area with strong drug pricing power and should help the company at a time when governments and private payers are pushing back on drug prices. Blood cancer cell therapy Breyanzi and anemia drug Reblozyl have secured leading positions in the US market, and pipeline drugs iberdomide and mezigdomide are in phase 3 trials. The 2020 MyoKardia acquisition (cardiology drug Camzyos) and 2024 Karuna acquisition (schizophrenia drug Cobenfy) are poised to each generate multibillion-dollar annual sales. We are monitoring data updates in 2026 that could expand labels or help secure new launches.

Read more about Bristol-Myers Squibb here.

Bank of America

• Morningstar Price/Fair Value: 0.83
• Market Capitalization: $381.7 billion
• Forward Dividend Yield: 2.35%
• Industry: Banks—Diversified

Diversified bank Bank of America rounds out our list of best blue-chip stocks to buy. Bank of America is a formidable financial titan with a $3.5 trillion balance sheet and a cornerstone of the American economy, holding the second-largest deposit market share in the US. The stock is 17% undervalued relative to our fair value estimate of $66 per share.

We view Bank of America’s strategy as a testament to the efficacy of a scaled, integrated model. Pursuing a core strategy of responsible growth, the company aims to grow in a way that looks good, leveraging its size and international presence to build a system that helps almost every customer, everywhere. While peers, particularly in Europe, have narrowed their service scope, Bank of America maintains formidable scale, allowing it to demonstrate a commitment to digital leadership and to reap the economic benefits of fractionalizing this expenditure across its retail, wealth, and institutional footprints. A prime example is Erica, its AI virtual assistant, which spans business lines and facilitated 200 million interactions in the second quarter of 2026, deeply embedding the bank into the operations of its 50 million active digital users.

Flexing this scale to offer a deep product shelf at competitive costs has allowed the firm to capture top-tier market share across various lines of business. Its retail operations hold the largest market share of US consumer deposits, serving 70 million clients through roughly 3,530 financial centers. The wealth management franchise provides sticky, fee-based revenue with approximately $4.9 trillion in client balances. Meanwhile, the firm’s trading operations and investment banking division consistently rank among the top four globally by revenue.

The “responsible” pillar of the firm’s growth framework is underpinned by an unwavering commitment to a disciplined risk framework. Bank of America intentionally skews its loan portfolio toward higher-quality borrowers, operating with strict underwriting standards that have yielded the lowest total loss rate among peers in 13 of the past 14 Federal Reserve stress tests. Though the banking industry is inherently cyclical, the firm maintains a highly capitalized, liquid foundation, anchored by an 11.2% common equity Tier 1 capital ratio and $960 billion in average global liquidity. This disciplined posture ensures through-the-cycle resilience and provides ample flexibility to continually fund organic growth and deliver robust shareholder returns.

Read more about Bank of America here.

How to Find More of the Best Blue-Chip Stocks to Buy

Investors who’d like to extend their search for top blue-chip stocks can do the following:

• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
• Use the Morningstar Investor screener to build a shortlist of blue-chip stocks to research and watch.