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 Library Archives

Expect more TD rewards

TORONTO-DOMINION BANK $101 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $181.8 billion; Price-to-sales ratio: 4.2; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.td.com) is rewarding investors now that Canada’s banking regulator has lifted the… Read More

CP’s merger is underway

CANADIAN PACIFIC RAILWAY $93.19, is still a buy. The company (Toronto symbol CP; shares outstanding: 929.7 million; Market cap: $87.2 billion; Rating: Above Average; Dividend yield: 0.8%) has now completed the first stage of its $31 billion acquisition of U.S.-based Kansas City Southern.
CP has deposited its KCS shares into… Read More

CN rebounds after its failed KCS takeover

CN’s shares initially fell after regulators rejected its merger with U.S. railway Kansas City Southern. Still, they quickly recovered and are now hitting record highs. Even so, we feel the stock should keep rising, particularly as CN’s new cost-cutting plan frees up cash for share… Read More

Our updates keep you on top of your stocks

GEORGE WESTON LTD., $133.40, is a buy. The holding company (Toronto symbol WN; Shares outstanding: 149.8 million; Market cap: $19.2 billion; TSINetwork Rating: Above Average; Dividend yield: 1.8%; www.weston.ca) makes a number of bakery products through Weston Foods. It also owns a 52.6% stake in Loblaw and a 61.7% stake… Read More

Metro ups value for investors

METRO INC., $60.68, is a buy. The company (Toronto symbol MRU; Shares o/s: 244.1 million; Market cap: $14.9 billion; TSINetwork Rating: Average; Dividend yield: 1.7%; www.metro.ca) operates 950 grocery stores and 650 drugstores (mainly under the Jean Coutu banner), in Quebec, Ontario and New Brunswick.
The stock held up well… Read More

Loblaw keeps costs low

LOBLAW COMPANIES, $95.58, is a buy. The company (Toronto symbol L; Shares outstanding: 335.3 million; Market cap: $32.3 billion; TSINetwork Rating: Above Average; Dividend yield: 1.5%; www.loblaw.ca) operates 1,096 supermarkets under several banners, including Loblaws, Zehrs, Provigo, Real Canadian Superstore and No Frills.
Loblaw is seeing slowing demand for its… Read More

IBM spins off Kyndryl

IBM, $116.92, is still a buy. The company (New York symbol IBM; Shares outstanding: 896.8 million; Market cap: $105.0 billion; TSINetwork Rating: Above Average; Dividend yield: 5.6%) has now completed the spinoff of the Managed Infrastructure Services unit of its Global Technology Services operations. That legacy business helps… Read More

Walmart’s future remains bright

Dear Client:
Back in January, we named Walmart our #1 Conservative Buy for 2021 given the protections it offered investors from the COVID-19 pandemic.
Now, even as the pandemic is waning, we still like Walmart’s prospects. Earlier lockdowns helped attract new customers for the retailer’s e-commerce and… Read More

New projects will push TC Energy higher

TC Energy’s shares have rebounded after the setback of the Keystone XL cancellation in January 2021. That’s largely due to the re-opening of the North American economy and rising energy demand. The company’s new projects also set investors up for more gains—and higher dividends.
TC ENERGY… Read More

Weston sells a big unit

GEORGE WESTON LTD., $136.73, is a buy. The holding company (Toronto symbol WN; Shares o/s: 149.8 million; Market cap: $20.4 billion; TSINetwork Rating: Above Average; Dividend yield: 1.8%; www.weston.ca) makes a number of bakery products through Weston Foods. It also owns a 52.6% stake in Loblaw and a 61.7% stake… Read More

Three key updates to spur your 2021 success

TORONTO-DOMINION BANK $86 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $154.8 billion; Price-to-sales ratio: 3.6; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.td.com) is Canada’s second-largest bank by market cap after Royal Bank (see… Read More

Pump up your returns with Royal

Canada’s largest bank continues to rebound strongly after dropping to $72 at the onset of the COVID-19 pandemic last year. That recovery is mainly because a mass surge in loan writeoffs failed to materialize as governments offered both individuals and businesses financial support. That assistance… Read More

These two tap Canadian growth markets

Loblaw is ready to thrive in a post-COVID-19 environment. Many of its customers who opted for home delivery (or in-store pickup) during pandemic lockdowns are sticking with that value-added service. The company’s improvements to its loyalty programs should also drive additional spending per visit, both… Read More

Big win for CP investors

CANADIAN PACIFIC RAILWAY $84.20, is still a buy. The company (Toronto symbol CP; shares outstanding: 666.9 million; Market cap: $56.0 billion; Rating: Above Average; Dividend yield: 0.9%) has won its takeover battle for U.S.-based railway Kansas City Southern (New York symbol KSU). That’s after KCS… Read More

CIBC teams up with Costco

CANADIAN IMPERIAL BANK OF COMMERCE $146 is a buy. The bank (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 450.1 million; Market cap: $65.7 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.cibc.com) is paying an undisclosed amount… Read More

TD merger pays off

TD BANK $83.39 (Toronto symbol TD; Shares o/s: 1.8 billion; Market cap: $152.1 billion; TSINetwork Rating: Above Average; Yield: 3.8%; www.td.com) is a buy. The bank merged its 43%-owned U.S. online brokerage firm TD Ameritrade Holding with rival Charles Schwab (New York symbol SCHW) in… Read More

GWO expands in the U.S.

GREAT-WEST LIFECO, $38.00, is still a hold. The insurer (Toronto symbol GWO; shares outstanding: 928.4 million; Market cap: $35.0 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.greatwestlifeco.com), through its Empower Retirement division, is buying the full-service retirement business of U.S.-based Prudential Financial Inc. (New… Read More