Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to  make the right moves to keep competing successfully in a changing marketplace.

The root of the term “blue chip” stems from the game of poker, as the blue chips represent the highest value. Investing in blue chip stocks can give you an additional measure of safety in today’s turbulent markets.

Pat McKeough believes investors will profit most, and with the least amount of risk, by putting the bulk of your stock portfolio in shares of blue chip companies—those that are well-established, with strong balance sheets and steady earnings and cash flow. These are companies that have bright prospects in healthy and growing industries.

The best blue chips offer both capital gains growth potential and regular dividend income. The dividend yield is certainly one of the most concrete indicators of a sound investment. It is the percentage you get when you divide the current yearly dividend payment by the share or unit price of the investment. It’s an indicator we pay especially close attention to when we select stocks to recommend in our investment newsletters.

We feel most investors should hold the largest part of their investment portfolios in securities from blue chip companies. All these stocks should offer good “value”—that is, they should trade at reasonable multiples of earnings, cash flow, book value and so on. Ideally, they should also have above average-growth prospects in expanding markets.

Meanwhile, when investing in any type of stock, at TSI Network we recommend using our three-part Successful Investor strategy:

1-Invest mainly in well-established companies;
2-Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; Utilities);
3-Downplay or avoid stocks in the broker/media limelight.

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Blue Chip Stocks Library Archives

We did it again!

Another one of our buys—Innergex Renewable Energy (see page 22)—has attracted an attractive takeover bid.
Investors often ask how we have managed to recommend so many stocks over the years that get taken over. One key is that we aim to recommend stocks with assets that attract… Read More

CPKC can overcome tariff threat

We feel railway operator CPKC is in a good position to withstand the negative impact of a potential 25% U.S. tariff on imports from Canada and Mexico. About a third of its freight volumes are necessary goods, such as grains and fertilizers, so tariffs aren’t… Read More

Two buys for your safety-conscious gains

CPKC and Metro are leading competitors in their respective markets. You can expect that to lower your risk if the economy should weaken. We see both stocks as buys.
CANADIAN PACIFIC KANSAS CITY, $111.87, is a buy. The company (Toronto symbol CP; shares o/s: 933.3 million; Market cap: $102.9… Read More

Our three top U.S. picks for 2025

For our 2025 top buys, we’ve chosen three stocks, one from each of our WSSF Portfolios—Conservative, Aggressive and Income.
These three companies are leaders in their individual markets. That puts them in a strong position to profit from secular trends such as the ongoing shift to… Read More

Here are updates on two of your buys

Long-time readers know that we aim to keep you informed of important news about the stocks we cover. That means highlighting developments and plans that promise to bolster investor gains. Here are two buys that stand out this month:
MERCK & CO., $95.68, is a buy. The… Read More

Good quarter for CIBC

CANADIAN IMPERIAL BANK OF COMMERCE $95 is a buy. The bank (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 942.3 million; Market cap: $89.5 billion; Price-to-sales ratio: 3.5; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.cibc.com) cut its loan-loss provisions in its fiscal 2024… Read More

Here are two safety-conscious blue-chip buys

Here are two of our top safety-conscious recommendations. Both have growth ahead. Look for that to spur their share prices and your returns.
IMPERIAL OIL LTD., $101.02, is a #1 Buy for 2024. The company (Toronto symbol IMO; Shares o/s: 523.4 million; Market cap: $52.9 billion; TSINetwork Rating: Average;… Read More

IBM builds its expertise

IBM, $219.73, is still a buy. The company (New York symbol IBM; Shares outstanding: 921.1 million; Market cap: $202.4 billion; TSINetwork Rating: Above Average; Dividend yield: 3.0%) often buys other companies to enhance its expertise. It cuts the risk of using acquisitions to expand by targeting smaller firms… Read More

Visa hit with anti-trust suit

VISA INC. $270 is still a buy. The company (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 2.0 billion; Market cap: $540.0 billion; Price-to-sales ratio: 16.0; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic-payments network. It processes credit, debit, prepaid… Read More

Railways will rebound from brief strike

The federal government recently stepped in to end a work stoppage by locomotive engineers, conductors, train and yard workers, and rail traffic controllers at these two railways. The dispute will now go to binding arbitration, which will likely increase their operating costs. Even so, we… Read More