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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Visa’s shares are down about 20% from their recent peak of $236, mainly due to fears that higher interest rates will prompt a drop in credit card use. However, its long-term outlook remains bright as more people shift to electronic payments instead of cash.
VISA INC… Read More
Due to rising costs for commodities and shipping, as well as the negative impact of a higher U.S. dollar, Proctor’s shares are down 15% since the start of 2022. However, that’s better than the 22% decline in the S&P 500 Index.
Despite the current uncertainty, Procter’s… Read More
The shares of Canada’s big two railways are both down since the start of 2022 on concerns that a possible economic slowdown could hurt their freight volumes.
However, both should benefit as conditions remain favourable for a rebound in grain shipments in the second half of… Read More
TORONTO-DOMINION BANK $95 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $171.0 billion; Price-to-sales ratio: 3.9; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.td.com) continues to benefit from rising loan demand and credit card use… Read More
Telus investors continue to benefit from the company’s upgrades to its wireless and high-speed Internet systems. These improvements helped the company take advantage of the shift to remote work and learning during the height of the COVID-19 pandemic.
The company is also unlocking some of its… Read More
In 1990, McDonald’s became the first Western fast-food company to operate in Russia (which was then still the Soviet Union). Due to the invasion of Ukraine, the company is now selling its Russian outlets, which will trigger a big writedown.
This temporary setback does not diminish… Read More
Long-time readers know that we keep you informed of important news about the stocks we cover. That means highlighting developments and plans that promise to brighten prospects for investors. Here are two buys that stand out this month:
INTACT FINANCIAL, $177.20, is a buy. The insurer (Toronto… Read More
TC Energy continues to expand its natural gas pipelines as power utilities shift away from more-polluting fuels like oil and coal. Those new projects will help it profit as Canada and the U.S. expand their ability to export liquefied natural gas (LNG) in the wake… Read More
TD BANK, $94.24, (Toronto symbol TD; Shares o/s: 1.8 billion; Market cap: $169.9 billion; TSINetwork Rating: Above Average; Div. yield: 3.8%; www.td.com) is a buy. The bank merged its 43%-owned U.S. online brokerage firm TD Ameritrade Holding Corp. (Nasdaq symbol AMTD) with rival Charles Schwab Corp. (New York… Read More
CP Rail’s growth prospects are bright—and now, it has received a big vote of confidence from U.S.-based activist investor Bill Ackman—he holds shares and options that could give him a 2% stake. The activist sold his original shares in CP in 2016 for a big… Read More
CANADIAN PACIFIC RAILWAY, $104.21, (Toronto symbol CP; shares outstanding: 929.7 million; Market cap: $95.9 billion; Rating: Above Average; Dividend yield: 0.7%) is still a buy.
U.S.-based activist investor Bill Ackman, through his Pershing Square hedge fund, now owns 2.8 million shares of CP. He also owns forward contracts… Read More
TD BANK, $101.42, (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $184.2 billion; TSINetwork Rating: Above Average; Dividend yield: 3.5%; www.td.com) is a buy. The bank will now buy U.S. banking firm First Horizon Corporation. Based in Memphis, Tennessee, it operates 412 branches in 12 states that… Read More
PROCTER & GAMBLE CO. $151 is a buy. The maker of household and personal-care goods (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.4 billion; Market cap: $362.4 billion; Price-to-sales ratio: 4.7; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.pg.com) is suspending most of its… Read More
Walt Disney’s strong and trusted brand has let it successfully launch into new areas over the years, from cruise lines to Disney+ streaming. Now, the company is targeting Disney-themed residential communities as a new source of future growth.
WALT DISNEY CO., $138.14, is a buy. The company… Read More
CANADIAN PACIFIC RAILWAY LTD. $99 is your #1 Conservative Buy for 2022. The company (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 929.7 million; Market cap: $92.0 billion; Price-to-sales ratio: 7.7; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight over a 23,700-kilometre… Read More
LOBLAW COMPANIES, $99.49, is a buy. The company (Toronto symbol L; Shares outstanding: 333.6 million; Market cap: $32.7 billion; TSINetwork Rating: Above Average; Dividend yield: 1.5%; www.loblaw.ca) saw grocery sales remain strong in the latest quarter as the Omicron variant of COVID-19 prompted consumers to eat meals at home instead… Read More
BANK OF NOVA SCOTIA, $93.19, is a #1 Buy for 2022. The lender (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $110.5 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.scotiabank.com) is Canada’s third-largest bank.
Bank of Nova Scotia continues to reverse last year’s big increase in… Read More
TD Bank was as well prepared—and well capitalized—to handle the COVID-19 pandemic as it was the 2008-2009 financial crisis. We still see TD Bank as a top pick, especially given its expanding and profitable U.S. businesses (including its just-announced acquisition of Memphis-based bank First Horizon… Read More
Intact Financial dropped along with the market when COVID-19 first hit—the stock fell to as low as $104.81 in March 2020. But the shares have now rebounded 74% as investors again take note of Intact’s underlying business strength. We think this Power Buy is poised to keep… Read More
THOMSON REUTERS CORP. $133 is still a buy. The company (Toronto symbol TRI; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 486.2 million; Market cap: $64.7 billion; Price-to-sales ratio: 8.2; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.thomsonreuters.com) reports that its revenue in the fourth quarter of 2021 rose… Read More
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