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.

Fortify your portfolio with the strongest stocks when you read this FREE Special Report, Canadian Blue Chip Stocks: Bank of Nova Scotia Stock, CP Rail Stock, CN Rail Stock and More.

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Blue Chip Stocks Post Archives

Stock Market Tips for Finding the Highest-Quality Stocks

Stock Market Tips for Finding the Highest-Quality Stocks

Some of the best stock market tips focus on selecting the right blue chip stocks, and then diversifying and balancing your portfolio

We continually scour the Canadian and U.S. markets for stocks to recommend as buys. We generally get excited about only a handful—that is, excited… Read More

11 tips for picking TSX blue chip stocks

11 tips for picking TSX blue chip stocks

TSX Blue Chip Stocks Are Key Components Of Successful Investor Portfolios
TSX blue chip stocks are well-established companies with attractive business prospects 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 firms… Read More

What are blue chip companies?

What are blue chip companies?

A blue chip company definition and some examples of blue chip companies we recommend
You may be surprised to find out that the root of the term “blue chip” stems from the game of poker, as the blue chips represent the highest value. At TSI Network,… Read More

Reasons to put defensive stocks in your portfolio

Reasons to put defensive stocks in your portfolio

Defensive stocks can protect your portfolio against economic or stock market downturns
Most 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 like… Read More