which of these four blue chip stocks would you invest in?
Exxon Mobil, Procter & Gamble, General Motors, General Electric
I'm doing a report on stock investing (I've never actually invested in stocks), and based on numbers, Procter & Gamble seems to be the best choice because it has the highest P/E, Profit Margin, Gross Margin, and 5yr Net Profit Margin, Gross Margin. HOWEVER it has the third lowest EPS, third lowest Net Income, and third highest Debt/Equity. What do you think?
Thank you Howard for correcting me!
- Anonymous9 years agoFavorite Answer
Might think again about considering GM a blue chip stock. This is not the 1950s. Each of the other 3 are decent choices. I already have investments in PG and GE. Own CVX instead of XOM. Better dividend. Actually, in my mind at least I am more interested in lower pe rather than higher pe. PE tells you how much you are paying per buck of earnings. Seems to me it is better to pay less than more all other things being equal. You need to consider consistency of earnings in addition to other statistics. Ten years ago PG was earning about 1.54 a share. Today it is earning about 3.93. During that time its annual earning never dropped more than about 10 cents a share from the previous year. The earnings of XOM have been somewhat more volatile. Dropped by 1/2 in 2009. Still haven't reached the level they were in 2008. That does not mean that the stock is not a blue chip or a good investment. It does mean though that their earnings have considerably less predictability than those of PG and therefore not to be valued so highly. There is also the consideration of what could conceivably happen to the company. Think BP.
- Anonymous9 years ago
XOM is the best stock in this list to invest in (this is a very solid company with a very solid stock). The second one is P&G. Avoid GM and remain indifferent when it comes to GE.
By the way, a stock with a very high P/E means that the stock is very overpriced (AMZN is one of these stocks by the way [see: http://fadi.el-eter.com/is-amazon-overvalued.html ], LNKD is another).
- I Like TurtlesLv 79 years ago
PE in and of itself is not the only factor to look at. A low PE does not always mean a bargain, value stock. Is GM over its problems? I don't think so and neither do investors, otherwise it would have a higher PE. Go with PG.
- Howard LLv 79 years ago
High P/E is not a good thing. It generally means the stock is overpriced. Based on that GM is the preferred stock.
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- denoncourtLv 44 years ago
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- underexposed...Lv 79 years ago
General Electric [GE] has almost $0.5trillion of debt and only $3Billion/quarter net income....I would reject this one outright because of this.
Proctor and Gamble [PG] has high debt too @ $33B with $3B/quarter net income I don't like such debt but on inspection it appears to be able to handle it for many years.
General Motors [GM} has $13B in debt with $3B/quarter net income...less debt
EXXON Mobile [XOM] has the least debt and highest revenue of all @ $9B debt with $10B net income
So....GE is out for me
nice rise this month but approaching resistance @ $24.75 with a huge resistance at $26.50
Also at a resistance @ $66.50 but is attacking it
Also at a all time high resistance @ $87.00 but attacking it strongly.....given the poor current price of oil and potential for oil to rise substantially I believe this resistance will fail and soon turn into a support.
On the basis of lowest Debt and highest quarterly income and best looking P&F chart....my choice would be EXXON Mobile [XOM] with Proctor & Gamble [PG] as a second choice.