3 Blue Chip Stocks to Buy in September and Keep Forever

Investors often seek quick returns by investing in higher-risk, higher-growth stocks. Indeed, this has been a profitable trade for the better part of 15 years, with most growth stocks underperforming their blue chip peers. And with a turnover from many top names (including some blue chip stocks), the future for a wide range of companies remains uncertain.

Macroeconomic conditions are improving, although the economy still appears to be strong. But with recent employment data and the Federal Reserve signaling an intention to cut interest rates, certain premium dividend-paying stocks could be in the spotlight again.

Many may be attracted by the stability and strength of the balance sheets of top companies. Others may prefer companies that are profitable and return capital to shareholders through dividends and buybacks. The next three stocks on this list certainly meet those criteria, for investors who want to take a more cautious approach to the market.

Key points about this article:

• Blue chip stocks have certainly performed well, but not as well as many high-growth tech stocks over the past 15 years.
• However, a rotation appears to be building, with many investors looking at blue chip stocks as portfolio staples for the next phase of this market cycle.
• If you are looking for action with huge potential, be sure to grab a free copy of ours brand new “Next NVIDIA” report.. It has a software stock where we are sure it has 10x potential.

McDonald’s (MCD)

McDonald’s sign

McDonald’s (NYSE:MCD) is a blue chip stock that really needs no introduction. For investors looking at the fast food giants, this is the top name and is expected to continue to be for the foreseeable future. With a market capitalization of around $200 billion, McDonald’s is massive, operating over 40,000 locations in over 100 countries. Importantly, about 95% of its restaurants are independently owned, meaning that McDonald’s earns the vast majority of its revenue and net income from franchise fees and royalties.

This is a model that has worked, with the company continuing to rely on scale and price growth in the past. Of course, prices began to fall, causing the company to miss out Q2 earnings expectations. A 3% drop in guest counts and a drop in US comparable sales led to EPS of just $2.97, versus the $3.08 analysts were expecting. Revenue was also substantially below expectations at $6.5 billion for the quarter, well below the forecast of $6.7 billion.

That said, the company’s recent decline may be a buying opportunity as McDonald’s management team focuses on introducing new value propositions and getting consumers excited about its brand again. So far, this strategy seems to be paying off, but we’ll have to see how future earnings reports play out.

I think McDonald’s world-class brand and its ability to capture the value-conscious consumer could be much more valued by the market if things turn sour. Consequently, with a 2.3% dividend yield that pays investors to be patient, this is a blue chip stock I think is worth buying in these dips.

Walmart (WMT)

A Walmart store, filmed from the parking lot

Walmart (NYSE:WMT) delivered strong results in the second quarter of fiscal 2025, with strong year-over-year growth in both revenue and earnings, allowing the company to beat analysts’ estimates. These results led the company’s management to to raise its guidance for fiscal year 2025a move that sent the stock higher immediately after the Aug. 15 earnings report.

In particular, Walmart posted strong growth across all segments, with e-commerce, in-store and club sales, and delivery services all performing strongly. Importantly, new ventures such as the company’s focus on advertising, membership and the marketplace also contributed to broader success and underscored the strength of Walmart’s business model.

I believe that as Walmart continues to expand its e-commerce footprint and increase margins (which expanded 43 basis points last quarter), its pricing strategies and more diversified revenue mix should be bodes well for long-term investors. This is a blue chip stock that pays a dividend of 1.1%, I think it deserves to recover from the falls.

PepsiCo (PEP)

A row of blue Pepsi bottles in what appears to be a grocery store

PepsiCo (NASDAQ:PEP) is among the consumer discretionary brands that have had challenges growing sales volume, resorting to price hikes to see revenue and earnings grow. That said, the undeniable pricing power that Pepsi possesses is remarkable and is one of the main reasons why many long-term investors continue to own and invest in this declining company.

Pepsi’s strong long-term growth profile is nicely accompanied by a 3.2% dividend yield, which is the highest on this list and among the most sustainable yields in the market. The company has has increased dividends for 52 consecutive yearsrecently increasing its distribution by 7%. Thus, iIf interest rates fall, I expect to see more demand for long-term dividend producers like Pepsi, making the stock’s recent valuation even more attractive.

On a perspective basis, Pepsi’s the management team expect sales in 2024 to grow by 4% and EPS to grow by 8% (or more). It is clear that the consumer is becoming more price conscious, so it is not clear whether further price increases will work in the coming quarters. But with a range of snack brands, in addition to its drinks, still commanding strong margins, any kind of cost improvement could improve the company’s outlook going forward.

Longer term, I think Pepsi is one of those world-class brands that should continue to perform very well over the long term and is worth holding patiently as a core position in a well-diversified portfolio.

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