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.
True Blue Chips pay off
Learn everything you need to know in ‘The Best Blue Chips for Canadian Investors’ for FREE from The Successful Investor.
Canadian Blue Chip Stocks: Bank of Nova Scotia Stock, CP Rail Stock, CAE Inc. Stock and more.
TSX blue-chip stocks are key components of successful investor portfolios
TSX blue chip stocks are well-established companies with attractive business prospects and trading on the Toronto Stock Exchange, like Bank of Montreal (TSE: BMO), RioCan Real Estate Investment Trust (TSX: REI.UN), and Enbridge (TSE: ENB). Well-established… Read More
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The best retirement investments are the same for everyone. Are you surprised? You shouldn’t be.
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Canadian bank stocks have long been one of our top choices for growth and income and COVID-19 has done nothing to change that
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The best TFSA investments provide you with tax advantages, but last year’s COVID-19 market downturn still highlights the need to pick your investments wisely; indeed, not all of your top picks belong in this increasingly popular investment account
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Here’s one of our top safety-conscious utility recommendations. It has a strong growth plan in place, which should boost its cash flow to pay for dividend increases. It should also lift its share price.
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When comparing penny stocks vs blue chip stocks, only one provides value and consistency
Penny stocks are generally riskier than other investments and early success can (paradoxically) lead to big losses. On the other hand, blue chip investments are well-established companies with attractive business prospects. Penny… Read More
Investing in the best Canadian stocks to buy right now will lead you towards dividend-paying blue chips, bank stocks, and more
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This computer firm is once again transforming itself as a leading provider of cloud-based computing services. Its “hybrid cloud” technology runs programs on remote servers as well as on the client’s own computers and that gives it an edge over competitors.
Good companies to invest in share a number of key characteristics
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‘Defensive stocks’ can protect your portfolio against economic or stock market downturns
Most so-called “defensive stocks” are in the Consumer sector. They benefit from continuous, habitual use and have a steady core of sales, regardless of the economy and business cycles. These companies typically make products… Read More
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Changes to this Policy
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Legal Notices and Disclaimers
The contents of this web site and our publications are based upon sources of information believed to be reliable, but no warranty or representation, expressed or implied, is given as to their accuracy or completeness. Any opinion reflects the Successful Investor’s judgment at the date of publication and neither the Successful Investor, nor any of its affiliated companies, nor any of their officers, directors or employees, accepts any responsibility in respect of the information or recommendations contained in the publications or on this web site. Moreover, the information or recommendations are subject to change without notice.
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