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

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

CP Rail reports record revenue

CP recently lost out to CN Railway in its bid to take over U.S. railway Kansas City Southern. But CP showed strong discipline in not over-bidding—plus, it pocketed a $750 million U.S. break-up fee from Kansas City Southern after that firm accepted the rival offer… Read More

Wildfires are a small setback for CP

CANADIAN PACIFIC RAILWAY LTD. $90 is your #1 Conservative stock for 2021. The company (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 666.6 million; Market cap: $60.0 billion; Price-to-sales ratio: 7.9; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight… Read More

TD stands out in a strong field

Canada’s banks continue to rebound strongly from last year’s COVID-19 lows; rising vaccination rates are letting more businesses re-open, which further fuels stock gains. Consumers also continue to repay their loans on time.
We like all of the Big Five banks, but TD stands out thanks… Read More

IBM remains on track

IBM, $139.82, (New York symbol IBM; Shares o/s: 893.5 million; Market cap: $124.0 billion; Above Average; Yield: 4.7%) dropped in early July after the company announced that President Jim Whitehurst—appointed at the time of IBM’s $33 billion acquisition of cloud-software provider Red Hat—is leaving after… Read More

Scotiabank moves past the pandemic

Bank of Nova Scotia shares continue to soar beyond their pre-pandemic levels as the economy recovers from last year’s downturn. Meantime, restrictions that prevent federally regulated lenders like Scotiabank from raising dividends and buying back shares remain in effect. However, it’s likely the regulator will… Read More

Raytheon is upping its savings target

RAYTHEON TECHNOLOGIES CORP. $87 is a buy. The company (New York symbol RTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.5 billion; Market cap: $130.5 billion; Price-to-sales ratio: 2.2; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.rtx.com) took its current form on April… Read More

3M can handle rising costs

3M COMPANY $192 is a buy. The company (New York symbol MMM; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 579.7 million; Market cap: $111.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 3.1%; TSINetwork Rating: Above Average; www.3m.com) produces more than 60,000 items, including air purifiers,… Read More

Our updates keep you on top of your stocks

GREAT-WEST LIFECO, $36.51, is still a hold. The insurer (Toronto symbol GWO; shares outstanding: 928.4 million; Market cap: $34.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.8%; www.greatwestlifeco.com) recently paid $4.4 billion for the retirement services business of Massachusetts Mutual Life Insurance Company.
Due to… Read More

Good pick for post-pandemic gains

McDonald’s shares have rebounded strongly from last year’s coronavirus shutdowns. That’s due to the fast-food leader’s plan to expand its drive-thru capacity and keep most outlets operating despite the pandemic. New investments in online ordering and home delivery have also helped it overcome the downturn.
The… Read More