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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One of the factors that go into our TSINetwork Rating is a company’s ability to tap into secular trends and habitual behaviour. A great example is Visa, which continues to profit from the ongoing shift to electronic payments. While the stock hit a new all-time… Read More
BCE INC., $53.12, is a buy. The company (Toronto symbol BCE; Shares o/s: 912.3 million; Market cap: $48.6 billion; TSINetwork Rating: Above Average; Yield: 7.3%) plans to cut its capital spending in response to a decision by the Canadian Radio-television and Telecommunications Commission (CRTC) that forces it to… Read More
Intact Financial is now close to its recent, all-time high—and the shares are up a spectacular 382% 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, $207.00, is… Read More
Royal Bank’s shares are down roughly 17% from their recent peak of $140 in February 2023. That’s mainly due to fears that higher interest rates will hurt new loan demand and lead to more writedowns of its current loans.
However, banking regulators have toughened lending standards… Read More
CANADIAN NATIONAL RAILWAY CO. $152 is a buy. The company (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 655.6 million; Market cap: $99.7 billion; Price-to-sales ratio: 6.0; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 29,900-kilometre network stretches across… Read More
Camadian Pacific Kansas City and IBM are leading competitors in their respective markets. We still see both stocks as buys.
CANADIAN PACIFIC KANSAS CITY, $99.32, is a buy. The company (Toronto symbol CP; shares outstanding: 931.8 million; Market cap: $92.6 billion; Rating: Above Average; Dividend yield: 0.8%) ships freight over… Read More
WALMART INC. $163 is a buy. Shares of the retailing giant (New York symbol WMT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $440.1 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.walmart.com) are now up 14% since the start of 2023,… Read More
BCE INC. $52 is a buy. The telecom giant (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 912.0 million; Market cap: $47.4 billion; Price-to-sales ratio: 2.4; Dividend yield: 7.4%; TSINetwork Rating: Above Average; www.bce.ca) has dropped 20% from its recent peak of $65 in… Read More
Here are two of our leading safety-conscious stock recommendations. Both have prospects for strong growth in their respective industries. Each is a buy.
IMPERIAL OIL LTD., $78.61, is a buy. The company (Toronto symbol IMO; Shares outstanding: 584.2 million; Market cap: $47.8 billion; TSINetwork Rating: Average; Dividend yield:… Read More
PROCTER & GAMBLE CO. $147 is a buy. The maker of household and personal-care goods (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.4 billion; Market cap: $352.8 billion; Price-to-sales ratio: 4.5; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.pg.com) plans to earmark about 5%… Read More
VISA INC. $230 is a buy. The company (New York symbol V; Conservative Growth Portfolio, Finance sector; Shares outstanding: 2.1 billion; Market cap: $483.0 billion; Price-to-sales ratio: 15.1; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.visa.com) operates the world’s largest electronic-payments network. It processes credit, debit and other… Read More
CANADIAN IMPERIAL BANK OF COMMERCE $55 is a buy. The bank (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 924.0 million; Market cap: $50.8 billion; Price-to-sales ratio: 2.2; Dividend yield: 6.3%; TSINetwork Rating: Above Average; www.cibc.com) is the smallest of Canada’s Big Five banks… Read More
The shares TD Bank have dropped 24% from their recent peak of $109 in February 2022. That’s mainly because rising interest rates have forced it set aside more funds for potential loan defaults. At the same time, higher interest rates could trigger a recession, which… Read More
IBM, $146.86, is still a buy. The company (New York symbol IBM; Shares o/s: 911.0 million; Market cap: $133.4 billion; TSINetwork Rating: Above Average; Dividend yield: 4.5%) has now agreed to sell its weather business to private equity firm Francisco Partners. The sale price has not yet been… Read More
TD BANK, $83.43, (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $152.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.td.com) continues to benefit from rising interest rates, which let it earn higher interest income on its loans.
In the three months ended July 31, 2023, revenue… Read More
ANDREW PELLER LTD. $4.30 (www.andrewpeller.com) remains a buy for long-term gains. The company is Canada’s second-largest wine producer after Arterra Wines. Peller now aims to unlock the value of its excess real estate. It recently received municipal approval to re-develop its former winery in Port Moody. B.C. as… Read More
IBM, $144.17, is still a buy. The company (New York symbol IBM; Shares o/s: 911.0 million; Market cap: $130.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%) is one of the world’s largest computer companies, with operations in over 175 countries.
In the past few years, IBM has shifted… Read More
Loblaw and TC Energy are leading competitors in their respective markets. We see both stocks as buy.
LOBLAW COMPANIES, $116.73, is a buy. The retailer (Toronto symbol L; Shares outstanding: 316.9 million; Market cap: $36.8 billion; TSINetwork Rating: Above Average; Dividend yield: 1.5%; www.loblaw.ca) operates 1,104 supermarkets under several banners,… Read More
CPKC took its current form on April 14, 2023, when Canadian Pacific Railway Ltd. completed its $31 billion U.S. acquisition of U.S.-based railway Kansas City Southern. While we’re always wary of big acquisitions, this merger—a rare case where the buyer knows nearly as much about the business… Read More
WALMART INC. $160 is a buy. The retailing giant (New York symbol WMT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $432.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.4%; TSINetwork Rating: Above Average; www.walmart.com) is teaming up with online travel booking provider Expedia Group Inc… Read More
