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 Post Archives

Get a 4.8% yield from IBM

Get a 4.8% yield from IBM

This firm’s investors continue to benefit from its strong commitment to keep its dividend rising. They should also gain from its shift to cloud computing and the spin-off of a legacy business.

While the company has yet to announce the details, it’s likely this new… Read More

Adobe is reaping its reward

Adobe is reaping its reward

This leading software firm benefits from the significant number of people working from home during the pandemic. We expect the remote-work trend to continue past the COVID-19 crisis and to spur rising demand for the firm’s digital conferencing software and other applications.

Meanwhile, there are multiple… Read More

Get a 4.4% yield from CIBC

Get a 4.4% yield from CIBC

In response to the COVID-19 pandemic, regulators relaxed their capitalization requirements for Canada’s banks. To further preserve capital, all banks have suspended their share buyback programs. They will also hold their dividends steady.

This stock has rebounded 97% from its March 2020 low of $68 as… Read More

Earnings jumped 14.4% at Procter & Gamble Co.

Earnings jumped 14.4% at Procter & Gamble Co.

The importance of brands to consumer companies like this one can’t be overstated, especially when strong COVID-19 demand for its hygiene and cleaning products continues to fuel earnings and dividends.

Improved sales led to an 8.2% jump in revenue during the quarter ended December 31, 2020.

Meanwhile,… Read More