Blue-Chip, Growth & Speculative Stocks

In our meeting on Sunday, we struggled to identify which of the above categories some of the NSE companies fall into. As our investment strategy means we need to be able to be able to easily tell these categories, I thought I would try and kick off a debate as to a criteria that we can use to differentiate between the stocks:

Criteria:
Year on year profits: should be growing moderately for a blue-chip up to 10-30% but above all, there are profitable; more than 30% for a growth company while speculative will be tend to have irregular profit patterns.
Market share: Blue chip will be the dominant player with a growing and stable position in its sector/country. Growth companies will be showing an increased market share via organic growth or by acquiring other players in its sectors. Speculative will be in between but showing signs of focus on particular niches.
Shareholder structure: Blue-chip companies at the NSE will typically have very stable shareholding structure with a majority or controlling interest. Growth companies will have diverse stockholding or have experienced a recent change in shareholding.
Dividend policy: Blue-chips have reliable dividend policy with payout and broadly similar level or growing year on year regardless of performance. At the NSE, it’s a known fact that the best dividend payers are the foreign-owned ones. Growth companies will have a low dividend payout policy as they look to plough back most of their profits into growth.
Share price: The price movement of a blue-chip over a given period of say six months or an year will broadly mirror that of the total market index while that of a growth company will be higher. For a speculative stock, the price movement will be erratic and usually lower being impacted by company specific events.
Growth policy: A blue-chip will look to grow by improving efficiency, introducing new channels of distribution or new products. A growth company will grow fast organically via some competitive advantage and then by acquiring bolt-on businesses. A speculative business would typically not have a clear growth policy.