blue-chip company

Today I got an offer from a headhunter for a contract-based work. Interesting is, I met a foreign word called "Blue Chip Company". So I did a little research to find out what it really means. Here it is! ;)

1. finance definition:

A company that is very strong financially, with a solid track record of producing earnings and only a moderate amount of debt. A blue-chip company also has a strong name in its industry with dominant products or services. Typically, blue-chip companies are large corporations that have been in business for many years and are considered to be very stable. However, there is no formal requirement for being a blue chip. Often, blue-chip companies are found in the Dow Jones Industrial Average.

2. Better explanation

Blue chip (stock market)

A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. The term derives from casinos, where blue chips stand for counters of the highest value. Most blue chip stocks pay regular dividends, even when business is faring worse than usual.

The phrase was coined by Oliver Gingold of Dow Jones sometime in 1923 or 1924. Company folklore recounts that the term apparently got its start when Gingold was standing by the stock ticker at the brokerage firm that later became Merrill Lynch. Noticing several trades at USD$200 or USD$250 a share or more, he said to Lucien Hooper of W.E. Hutton & Co. that he intended to return to the office to “write about these blue chip stocks.” Thus the phrase was born. It has been in use ever since, originally in reference to high-priced stocks, more commonly used today to refer to high-quality stocks. In contemporary media, Blue Chips and their daily performances are frequently mentioned alongside other economic averages like the Dow Jones Industrial Average.


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