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.
 How Successful Investors Get RICHLearn everything you need to know in ‘The Canadian Guide on How to Invest in Stocks Successfully’ for FREE from The Successful Investor. How to Invest In Stocks Guide: Find 10 factors that make your investments safer and stronger. |
2024 is the third year in a row that we’ve made McDonald’s our top Conservative buy. The stock is down 15% since the start of the year, but we continue to see the company’s prospects as bright.
McDonald’s is also doing a good job adjusting to… Read More
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:
LUNDIN GOLD, $23.41, is a buy. The miner… Read More
Artificial intelligence (AI) is an example of an investment idea that could boost your investment returns—or more likely end up costing you money. All in all, we think that the biggest, surest gains from AI will come from investing in established businesses that are already… Read More
CANADIAN NATIONAL RAILWAY CO. $162 is a buy. The company (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 664.0 million; Market cap: $107.6 billion; Price-to-sales ratio: 6.1; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 30,255-kilometre network stretches across the country,… Read More
2024 is the fifth year in a row we selected CP Rail (now CPKC after its merger with U.S.-based railway Kansas City Southern) as your #1 Conservative Buy. If you bought the stock five years ago, at the start of 2019, you’ve enjoyed a 121%… Read More
METRO INC., $77.46, is a buy. The company (Toronto symbol MRU; Shares outstanding: 225.7 million; Market cap: $17.5 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.metro.ca) operates 992 grocery stores and 641 drugstores, in Quebec, Ontario and New Brunswick.
Metro has formed a new alliance with AddÉnergie Technologies Inc. (which… Read More
LOBLAW COMPANIES, $161.79, is a buy. The retailer (Toronto symbol L; Shares outstanding: 306.0 million; Market cap: $49.5 billion; TSINetwork Rating: Above Average; Dividend yield: 1.3%; www.loblaw.ca) has gained about 35% in the past year, and recently hit a new all-time high of $164.94.
Loblaw keeps innovating to maintain its… Read More
TD Bank cancelled its deal to acquire First Horizon Corp. for $13.4 billion in May 2023. Part of the reason was that U.S. regulators were concerned by lapses in its anti-money laundering procedures. However, TD is making progress in settling this issue, and the bank… Read More
Merck continues to make savvy acquisitions to bolster its own research pipeline. That’s key to sustaining its growth going forward.
MERCK & CO. INC., $127.99, is a buy. The drugmaker (New York symbol MRK; TSINetwork Rating: Above Average) (www.merck.com; Shares o/s: 2.5 billion; Market cap: $324.2 billion; Yield:… Read More
ELI LILLY & CO., $891.46, is still a buy. The company (New York symbol LLY; TSINetwork Rating: Above Average) (www.lilly.com; Shares o/s: 950.2 million; Market cap: $847.3 billion; Yield: 0.6%) has continued to hit new all-time highs as it moves one step closer to winning approval for its… Read More
Intact Financial is now close to its recent, all-time high—and the shares are up a spectacular 411% since we first recommended them at $42.95 in our April 2010 issue. We think this Power Buy is poised to keep moving even higher for you, our subscribers.
INTACT FINANCIAL, $219.30, is… Read More
Insurers write policies, collect premiums from customers, and then invest those premiums to meet future claims. That need to cover claims means they invest significant amounts of their funds in fixed-income instruments, primarily bonds. That also means high interest rates are a boon to their… Read More
Telus and Ovintiv are among the leaders in their respective markets. We still see both stocks as buys.
TELUS, $22.80, is a buy. The stock (Toronto symbol T; Shares outstanding: 1.5 billion; Market cap: $33.8 billion; TSINetwork Rating: Above Average; Dividend yield: 6.6%; www.telus.com) is a Canadian wireless carrier with… Read More
TD BANK, $76.62, is a #1 Buy for 2024. The lender (Toronto symbol TD; Shares o/s: 1.8 billion; Market cap: $134.8 billion; TSINetwork Rating: Above Average; Dividend yield: 5.3%; www.td.com) cancelled its deal to acquire First Horizon Corporation (New York symbol FHN) for $13.4 billion U.S. in May 2023… Read More
We’ve long said that the top five Canadian banks tend to leapfrog each other in investment desirability. That’s why we suggest that most Canadians own two or even three of them—including Bank of Nova Scotia. Its cheap price, prospects for growth and its high yield… Read More
Artificial intelligence (AI) is an example of an investment idea that could boost your investment returns—or more likely end up of costing you money. All in all, we think that the biggest, surest gains from AI will come from investing in established businesses that are… Read More
We continue to recommend all investors own at least one of Canada’s railways due to their importance to the national economy. While our top pick is Canadian Pacific Kansas City Ltd. (Toronto symbol CP), we also like the outlook for its main rival, Canadian National.
After… Read More
IBM, $164.43, is still a buy. The company (New York symbol IBM; Shares outstanding: 918.6 million; Market cap: $151.1 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%) has shifted its focus in the past few years to its more-profitable cloud computing, consulting and mainframe businesses.
In the three months… Read More
Loblaw and Metro remain leading competitors in their markets. We see both stocks as buys.
LOBLAW COMPANIES, $152.84, is a buy. The retailer (Toronto symbol L; Shares outstanding: 306.7 million; Market cap: $46.9 billion; TSINetwork Rating: Above Average; Dividend yield: 1.2%; www.loblaw.ca) operates 1,104 supermarkets under several banners, including Loblaws,… Read More
We’re always wary of big acquisitions like the company’s April 2023 purchase of U.S.-based railway Kansas City Southern for $31 billion U.S. Still, the deal is a rare case: here, the buyer knows nearly as much about the business as the seller. The merger also lets CPKC… Read More
