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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TD BANK, $76.84, (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $141.2 billion; TSINetwork Rating: Above Average; Dividend yield: 4.9%; www.td.com) has now cancelled its deal to acquire First Horizon Corporation (New York symbol FHN) for $13.4 billion U.S. due to delays in securing the necessary… Read More
MERCK & CO. INC., $114.76, is a buy. The drugmaker (New York symbol MRK; TSINetwork Rating: Above Average) (www.merck.com; Shares outstanding: 2.5 billion; Market cap: $294.6 billion; Dividend yield: 2.5%) now buying San Diego-based Prometheus Biosciences Inc. for $10.8 billion.
Prometheus could provide significant growth in a key new… Read More
This is the fifth year in a row that we’ve selected CP Rail–now Canadian Pacific Kansas City Ltd.—as your #1 Conservative Buy. In fact, over that time, the stock has gained close to 130% compared to just 28% for the S&P/TSX Composite Index.
CP recently completed… Read More
CANADIAN PACIFIC KANSAS CITY LTD. $107.44 (Toronto symbol CP; shares o/s: 931.1 million; Market cap: $99.1 billion; Rating: Above Average; Dividend yield: 0.7%) took its current form on April 14, 2023, when Canadian Pacific Railway Ltd. completed its acquisition of U.S. railway Kansas City Southern (KCS).
Meantime, the… Read More
Unlike many technology companies, IBM is consistently profitable—its high, sustainable dividend also helps support its stock price. Meanwhile, in response to slowing demand for its traditional mainframe computers and consulting services, the company has shifted its focus to the faster-growing field of cloud computing.
IBM, $123.45,… Read More
These two beverage makers continue to raise their selling prices to offset higher ingredient and other costs. So far, their sales volumes have held up thanks to their strong brands. However, more price hikes could prompt consumers to switch to cheaper products.
PEPSICO INC. $189 is… Read More
TORONTO-DOMINION BANK $81 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $145.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.td.com) merged its 43%-owned U.S. online brokerage firm TD Ameritrade Holding Corp… Read More
CANADIAN PACIFIC RAILWAY $102.02 (Toronto symbol CP; shares o/s: 930.9 million; Market cap: $96.6 billion; Rating: Above Average; Dividend yield: 0.7%) has finally received approval from the U.S. Surface Transportation Board for its $31 billion acquisition of U.S.-based railway Kansas City Southern (KCS).
CP will now begin merging… Read More
A key part of our approach to investing is to look for companies with hidden or overlooked assets that can help unlock long-term value for investors. In Procter & Gamble’s case, its hidden assets are its brand names, many of which have been around for… Read More
INTACT FINANCIAL, $186.68, is a #1 Power Buy for 2023. The insurer (Toronto symbol IFC; TSINetwork Rating: Average) (www.intactfc.com; Shares outstanding: 175.3 million; Market cap: $32.8 billion; Dividend yield: 2.4%) provides investors exposure to Canada’s largest property and casualty insurer. Specifically, Intact insures more than five million individuals and businesses. Its… Read More
CN Rail failed in its attempt to buy U.S. railway Kansas City Southern, which will instead merge with Canadian Pacific Railway. Still, following its rejected offer, CN hired a new CEO in January 2022. That move helped kick-start a growth plan for CN, which will… Read More
Visa’s shares fell below $135 at the onset of the COVID-19 pandemic in March 2020. However, the stock quickly recovered as lockdowns prompted a surge in online shopping and lifted the company’s revenue from processing credit and debit card payments.
We feel the stock will continue… Read More
The current uncertainty caused by rising interest rates and still-high inflation has prompted Canada’s big banks to increase their loan-loss provisions. Even so, those provisions remain well below their 2020 pandemic peaks.
ROYAL BANK OF CANADA $140 is a buy. The bank (Toronto symbol RY; Conservative Growth and… Read More
Through a series of sharp interest rate increases to curb inflation, the Bank of Canada raised its benchmark rate from just 0.50% in March 2022 to today’s 4.50%.
Higher interest rates are generally good news for banks, as those lenders earn higher interest rates on their… Read More
IBM, $135.09, is still a buy. Last year, the company (New York symbol IBM; Shares outstanding: 904.1 million; Market cap: $121.8 billion; TSINetwork Rating: Above Average; Dividend yield: 4.9%) spun off Kyndryl Holdings Inc. (New York symbol KD). That firm helps corp-rate and government clients manage their datacentres.
The split… Read More
We have singled out two stocks and one ETF as your #1 buys for 2023. Each offers investors long-term growth prospects at a reasonable price. Meanwhile, all three successfully weathered the pandemic and are poised for solid gains as economic growth rebounds.
BANK OF NOVA SCOTIA,… Read More
Commercial air traffic volumes have now rebounded to 80% of their pre-pandemic levels. That continues to spur demand for Raytheon’s aerospace products. The company’s military businesses also benefit as the U.S. and other NATO countries seek to replenish the stockpile of missiles and other weapons… Read More
Here are your three top U.S. stock picks for 2023—one from each of our Conservative, Aggressive and Income portfolios.
All three stocks are market leaders, which should give them an advantage if the economy slows. Moreover, new investment in their businesses position them for many more… Read More
Here are your top picks for new buying in 2023, and once again we’ve selected three stocks from our TSI Portfolios (Conservative, Aggressive and Income).
Each of the three is a leader in its markets, which helps cut your risk if the economy weakens. Savvy acquisitions… Read More
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST, $26.95, is a buy. The REIT (Toronto symbol AP.UN; Units outstanding: 128.0 million; Market cap: $3.5 billion; TSINetwork Rating: Extra Risk; Dividend yield: 6.5%; www.alliedreit.com) owns 215 office buildings (including 12 properties under development and one held for sale) mainly in major… Read More