Common stock of a nationally known company that has a long record of profit growth, dividend payment, and a reputation for quality management. The most popular index which follows US blue chips is the Dow Jones Industrial Average. The Dow Jones Industrial Average is a price-weighted average of 30 blue-chip stocks that are generally the leaders in their industry.
It is a stock that is thought to be safe, in excellent financial shape and firmly entrenched as a leader in its field. Blue chips generally pay dividends and are favorably regarded by investors. Examples of blue chips are Wal-Mart, Coca-Cola, Berkshire Hathaway and Exxon-Mobile.