Key Points

• Blue chip companies have established sound business models that can deliver solid returns over time.

• These companies often operate in stable industries with steady demand for their services.

• They also tend to display a strong economic moat through pricing power and barriers to entry.

• 10 stocks we like better than Berkshire Hathaway ›

Investing in the stock market is one way to build enduring, long-term wealth. As an investor, you could choose to invest in high-flying growth stocks, dividend stocks that provide passive income, or more conservative investments that can preserve and grow your investments steadily over time.

One strategy you can consider is investing in blue chip companies. These companies have withstood the test of time thanks to sound business models that have led to solid returns for patient investors.

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Blue chips typically offer reliable dividends and steady long-term growth, making them appealing to both seasoned investors and newcomers seeking to establish a solid financial foundation. Here are four blue chip stocks you can invest in today.

Image source: Getty Images.

Berkshire Hathaway

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has thrived under the leadership of its longtime CEO, Warren Buffett. Since 1965, Buffett has led the conglomerate to 20% annualized returns, or enough to turn a $100 investment into $5.5 million today.

So when Buffett announced earlier this year he was stepping down at the end of 2025, it took the wind out of the sails of Berkshire Hathaway stock, which is down 12% since the announcement in early May.

However, Berkshire Hathaway is a widely diversified conglomerate with holdings across numerous industries, including insurance, transportation, materials, consumer goods, and energy. Its insurance operations help generate a steady stream of cash flow, which it can invest in treasuries or equities, or use to acquire companies outright.

What makes Berkshire appealing right now is its massive cash pile and positive tailwinds from higher interest rates. The Federal Reserve is cautious about cutting interest rates due to concerns about inflation stemming from higher tariffs. This has resulted in rates staying "higher for longer," and Berkshire has benefited to the tune of $2.9 billion in interest income in the first quarter.

Berkshire will be under new leadership, led by CEO Greg Abel, with its investment portfolio managed by Todd Combs and Ted Weschler, the investing lieutenants tapped by Buffett and the late Charlie Munger over a decade ago. While the uncertainty around its future remains, I think it's well-capitalized and diversified enough that it's a buy at today's price.

Progressive

Progressive (NYSE: PGR) is the second-largest automotive insurer in the United States. What sets this blue chip company apart is its disciplined underwriting, strong brand, and direct-to-consumer model.

The company relies heavily on technology and data to accurately price risk and was one of the original companies to adopt usage-based insurance, known as telematics. This approach utilizes driver data to price policies, which is one reason the company has outperformed its competitors.

Progressive's track record of navigating underwriting cycles while maintaining profitability distinguishes it. Going back 23 years, the company's combined ratio has averaged 92%, which is significantly lower than the industry average of 100%. Put differently, Progressive has earned an average of $8 in underwriting profit for every $100 in premiums.

As a stock, Progressive offers defensive characteristics with upside. Insurance is a stable industry that enjoys steady demand, and Progressive has demonstrated its ability to outperform its peers in underwriting profitability.

The company is also well-positioned to perform if inflation and interest rates were to remain elevated. That's because it has pricing power, allowing it to adapt to rising costs, and it also earns interest on float (the cash it collects from premiums but hasn't yet paid out in claims).

Its stellar long-term performance and ongoing strong underwriting make Progressive an excellent blue chip stock to consider adding to your portfolio today.

Chubb

Chubb (NYSE: CB) is one of the world's largest publicly traded property and casualty insurers, recognized for its underwriting discipline, global diversification, and robust balance sheet. It operates across commercial and personal lines, with a reputation for serving high-net-worth individuals and complex corporate risks. Its conservative approach to risk, coupled with a broad international footprint, has enabled it to weather economic cycles well.

Chubb has been a solid dividend stock for investors, growing its payout for 32 consecutive years. With a yield of 1.4% and an average annual total return of 11.7% over the past two decades, the company offers investors a balanced combination of income and stock price appreciation. It also enjoys the benefits that Progressive does, such as pricing power and interest income, making it another solid blue chip stock to consider owning today.

S&P Global

S&P Global (NYSE: SPGI) plays a key role in markets. The company is perhaps best known for its S&P 500 index, but it also provides credit ratings, data, and analytics. Barriers to entry make it difficult to break into the credit ratings space, and S&P Global holds a 50% share of this market.

S&P Global's business model is resilient and scalable. Credit rating demand rises with bond issuance, while its index and data segments enjoy recurring fees from ETF licensing and subscriptions. The company also has low capital requirements, which enables it to enjoy high margins, recurring revenue, and a global reach.

The company has raised its dividend payout for 53 years, making it an exclusive member of the Dividend Kings club. While it offers a modest dividend yield of 0.7%, when combined with its stock price appreciation, S&P Global has returned 15.3% annually over the past two decades. For investors, S&P Global offers growth and a wide moat along with steady cash flows, making it a quality blue chip stock to own today.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

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Courtney Carlsen has positions in Berkshire Hathaway and Progressive. The Motley Fool has positions in and recommends Berkshire Hathaway, Progressive, and S&P Global. The Motley Fool has a disclosure policy.

Key Points

• Most states don’t tax Social Security benefits at all.

• Of those that do, the policies vary significantly.

• On the federal level, some seniors are about to get a new tax break.

• The $23,760 Social Security bonus most retirees completely overlook ›

One of the most common questions I get asked from older friends and relatives is, "Will I have to pay taxes on my Social Security benefits?"

The short answer is "maybe." Some retirees have to pay federal income tax on a portion of their Social Security benefits, depending on their income level. However, the exact amount of tax you'll end up paying on your Social Security benefits depends not just on your income level, but where you live.

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The good news is that most states don't tax Social Security benefits at all. In more than 80% of all U.S. states, Social Security income is completely exempt from any state income taxes.

In this article, we'll take a closer look at the states that don't tax Social Security, the few states that still do, and a new tax break seniors are about to get that will help offset any tax burden.

Image source: Getty Images.

The 41 states that don't tax Social Security benefits

First, let's get to the list you've been waiting for. If you live in one of these 41 states (or D.C.), you won't pay any state income tax on your Social Security benefits in 2025.

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Mississippi
• Missouri
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• South Carolina
• South Dakota
• Tennessee
• Texas
• Virginia
• Washington
• Wisconsin
• Washington, D.C.
• Wyoming

Note that this list has two types of states. There are those that don't have a state income tax at all, like Florida, and those that have provisions in their tax code that specifically exclude Social Security income (or all retirement income, in some cases).

The states that have Social Security income tax

There are only nine states that still tax Social Security benefits in 2025, and in alphabetical order, they are:

• Colorado
• Connecticut
• Minnesota
• Montana
• New Mexico
• Rhode Island
• Utah
• Vermont
• West Virginia

There are a couple of key points to know, if your state is on this list.

First, the number of states that don't tax Social Security has increased in recent years and is likely to continue to do so. In fact, 2025 is the last year that West Virginia is going to tax Social Security.

Second, each of these states has its own tax framework for Social Security benefits, and they generally only apply to either higher-income households (significantly higher than the federal taxation thresholds) or to certain age groups, like Social Security beneficiaries under 65.

A special tax break for seniors

As a final thought, regardless of what state you live in, it's important to know that a special tax break is going into effect for tax years 2025 through 2028. President Trump campaigned on the elimination of taxes on Social Security altogether, but that isn't happening. However, the recent tax and spending plan included a senior bonus that should significantly lower any Social Security tax burden, especially on middle-income retirees.

The short version is that if you're 65 or older, you can qualify for a tax deduction of as much as $6,000 per person (so married couples can get twice that amount). It begins to phase out above income levels of $75,000 (single) and $150,000 (married), but if you qualify, you can use the deduction regardless of whether you choose to itemize on your tax return.

To be sure, this isn't likely to completely eliminate tax on Social Security benefits for many retirees, but it is certainly a valuable tax break worth knowing.

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Key Points

• BYD isn't a typical Buffett stock, but has qualities that fit his philosophy.

• VeriSign makes the internet function as we know it today.

• Buffett loves Coca-Cola for the soda as well as as the company.

Warren Buffett is one of the most legendary figures on Wall Street. The longtime CEO of Berkshire Hathaway turned the company into a dominant conglomerate that has its hands in everything, including real estate, insurance, energy, consumer goods, and healthcare.

Under Buffett's leadership, Berkshire's portfolio gained 5,502,284% from 1965 to the end of 2024. By way of comparison, the S&P 500 gained 39,054%, including dividends, in that same period. Now 94 and planning a well-deserved retirement at the end of the year, Buffett undoubtedly belongs on the Mount Rushmore of investors.

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Image source: The Motley Fool.

Buffett's philosophy involves buying quality businesses that have distinct competitive advantages. He invests for the long term, often holding stocks for decades, and tends to prefer companies with strong management, reliable earnings, and a consistent dividend.

Now that the calendar has turned to July and we're halfway through the year, this is a good time to take a cue from the Oracle of Omaha himself and choose stocks that are held in Buffett's portfolio. If you're looking for a new investment, you can't go wrong with these three Warren Buffett stocks: BYD (OTC: BYDDY), VeriSign (NASDAQ: VRSN), and Coca-Cola (NYSE: KO).

BYD: An outlier that fits the Buffett mold

On the surface, BYD doesn't look like a Buffett stock. The Chinese company, which got its start in 1995 as a rechargeable battery maker, now is one of the world's biggest manufacturers of electric vehicles (EVs). It also works in rail transit, new energy, electronics, and power storage. Berkshire's stake in BYD is more than 162 million shares, valued at $2.5 billion.

Berkshire actually got involved with BYD because of the influence of Charlie Munger, the longtime Buffett confidant and late Berkshire Hathaway vice chairman. But the company fits with Berkshire's portfolio because of the key position it has in the Chinese EV market. BYD is by far the biggest supplier of EVs in China, delivering 3.52 million vehicles in 2024. The company in second place, Wuling, had just 673,279 deliveries.

Earnings for the first quarter showed revenue of $23.77 billion, up 36% from a year ago. Profits totaled $1.27 billion, up 100% from the same quarter a year ago.

VeriSign makes the internet functional

VeriSign is one of those businesses that you may not know a lot about, but as it turns out, you use its products every day. The Virginia-based company provides domain name registry services and internet infrastructure -- in short, it's the exclusive registrar for websites that end in .com or .net.

The company says it provides support for 169.8 million domain names that end with .com or .net, and processes more than 428.1 billion domain name system (DNS) queries each day. The scope of its work, and its massive competitive moat are exactly the qualities that Buffett looks for when choosing a stock.

First-quarter financials included revenue of $402 million, up 4.7% from a year ago. Net income was $199 million and $2.10 per year, compared to $194 million and $1.92 per share in the first quarter of 2024. Buffett feels strongly enough about VeriSign that Berkshire owns 14.3% of the company, holding nearly 13.3 million shares.

Coca-Cola is a longtime Buffett favorite

Buffett is passionate about Coca-Cola, both as a beverage and as a company. He famously downs five cans of Coca-Cola per day, and once told Fortune magazine that he gets 25% of his daily calories from the carbonated drink.

But Coca-Cola does a lot more than its namesake soda. As people started looking for healthier options, Coca-Cola expanded its offerings to include bottled water, sports drinks, tea, and juices. It's even started a line of alcoholic beverages.

Earnings for the first quarter showed revenue down 2%, to $11.1 billion. But on the plus side, the company managed to improve its operating margin to 32.9% from just 18.9% in the first quarter of 2024. And earnings per share grew 5%, to $0.77 per share.

Berkshire owns 400 million shares of Coca-Cola stock, representing a 9.3% share. Its stake is worth a whopping $28.45 billion.

Should you invest $1,000 in BYD Company right now?

Before you buy stock in BYD Company, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BYD Company wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

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See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and VeriSign. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.

Tyler Technologies (NYSE: TYL) was given the cold shoulder by analysts on the first trading day of the week. On the back of an analyst's price cut, the company's share price eroded, although not by an alarming figure. It declined 0.6% for an uninspiring performance, considering the S&P 500's (SNPINDEX: ^GSPC) marginal (less than 0.1%) Monday rise.

Snip, snip

That was roughly proportionate with the cut enacted by Wells Fargo's Michael Turrin. He shaved $20 off his Tyler price target for a new fair-value assessment of $590 per share. In doing so, he maintained his equal weight (read: hold) recommendation on the specialty tech stock.

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The reasons for Turrin's move weren't immediately clear. Analysts often make tweaks to their stock evaluations after earnings; this one closely follows Tyler's latest earnings release. Last week, the company unveiled its first-quarter results, posting revenue that grew 10% year over year to $565 million, and non-GAAP (generally accepted accounting principles) adjusted net income that ballooned by nearly 30% to $122 million.

Both headline figures convincingly beat analyst estimates, as did bottom-line guidance for the entirety of 2025. Management attributed the improvements to strong growth in revenue for the company's software-as-a-service (SaaS) offerings, among other products.

A relatively harmless cut

It can be hard for ambitious tech companies to impress investors, who often expect lofty growth numbers for a number of years. I don't think Tyler investors should be discouraged by this fresh price target cut -- the company looks solid fundamentally and attractively priced. In short, I'd be more bullish on its potential than Turrin is.

Should you invest $1,000 in Tyler Technologies right now?

Before you buy stock in Tyler Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tyler Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

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See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Wells Fargo is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tyler Technologies. The Motley Fool has a disclosure policy.