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

CP Rail prepares to break its record

CANADIAN PACIFIC RAILWAY LTD. $317 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 139.8 million; Market cap: $44.3 billion; Price-to-sales ratio: 5.7; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight over a 23,700-kilometre rail network between Montreal and Vancouver,… Read More

New strategy gives BNS an edge

Canada’s big five banks remain well-positioned to weather downturns in the Canadian economy, contrary to pessimistic forecasts from some in the business media.
We like all five, but feel Bank of Nova Scotia is particularly appealing for new buying right now given the recent drop in… Read More

IBM focuses on new growth

IBM $148.24 (New York symbol IBM; Shares outstanding: 886.6 million; Market cap: $132.8 billion; TSINetwork Rating: Above Average; Dividend yield: 4.4%; www.ibm.com) is one of the world’s largest computer company, with operations in over 175 countries.
Excluding one-time items, IBM earned $2.827 billion in the three months ended… Read More

CP Rail profits from efficiency boost

CP continues to benefit from strong demand and higher prices for its crude-by-rail services and other shipping. Limited industry competition and the company’s focus on improving its efficiency also bode well for its future profits and CP’s share price.
CANADIAN PACIFIC RAILWAY $315.11 (Toronto symbol CP; shares… Read More

Walmart’s online expansion is further ahead

The shift to online shopping has spurred traditional “brick-and-mortar” retailers to aggressively expand their own e-commerce websites. They—including the three we analyze below—feel letting customers place online orders and pick up their purchases in store gives them an edge over pure Internet sellers like Amazon.com.
We… Read More

BNS exits two countries

BANK OF NOVA SCOTIA $71.16 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $85.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.9%; www.scotiabank.com) has agreed to sell its operations in Puerto Rico and the U.S. Virgin Islands to OFG Bancorp (New York symbol OFG). Those operations… Read More

TD invests for future growth

TD Bank reported higher earnings in the latest quarter for both its Canadian and U.S. businesses. The bank continues to increase efficiency, and profits, by improving its online and mobile banking platforms. This positions it for strong future growth—and it makes TD a top bank… Read More

Pick Texas Roadhouse for new buying

TEXAS ROADHOUSE $52.49 (Nasdaq symbol TXRH; TSINetwork Rating: Extra Risk) (502-426-9984; www.texasroadhouse.com; Shares o/s: 71.8 million; Market cap: $3.9 billion; Divd yield: 2.3%) is a full-service, casual-dining chain with 588 locations spread across 49 U.S. states and 10 foreign countries. Its restaurants operate under two banners—Texas Roadhouse… Read More

These Canadian retailers have much to offer

We hold a high opinion for these three Canadian retailers. Each is focused on improving its stores and online operations to better retain customers and increase sales.
Their share prices—along with many other Canadian and U.S. retailers—have dropped in the past few months. That reflects growing… Read More

These Canadian insurers profit in Asia

MANULIFE FINANCIAL CORP. $23.67 (Toronto symbol MFC; Shares o/s: 2.0 billion; Market cap: $46.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.2%; www.manulife.ca) is Canada’s largest life insurer.
The company also sells other forms of insurance, including health, dental and travel plans; in addition, it offers mutual funds… Read More

Foreign assets power BNS

BANK OF NOVA SCOTIA $69.95 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $85.6 billion; TSINetwork Rating: Above Average; Dividend yield: 5.0%; www.scotiabank.com) is Canada’s third-largest bank with total assets of $1.06 trillion.
Excluding one-time items, the bank earned $2.26 billion in its fiscal 2019 second quarter,… Read More

Here’s our Pick of the Month

INTACT FINANCIAL $117.70 (Toronto symbol IFC; TSINetwork Rating: Extra Risk) (416-341-1464; www.intactfc.com; Shares outstanding: 139.2 million; Market cap: $16.4 billion; Dividend yield: 2.6%) is Canada’s largest provider of property and casualty coverage, insuring more than five million individuals and businesses. Its major brands are Intact Insurance, Canada BrokerLink… Read More

Pipeline shortages boost CN

CANADIAN NATIONAL RAILWAY CO. $125 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 721.4 million; Market cap: $90.2 billion; Price-to-sales ratio: 6.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,200-kilometre network stretches across the country, and passes… Read More

Higher shipments spur CP

CANADIAN PACIFIC RAILWAY $300.24 (Toronto symbol CP; Shares outstanding: 147.7 million; Market cap: $42.0 billion; TSINetwork Rating: Above Average; Dividend yield: 0.9%; www.cpr.ca) ships freight over its 22,000-kilometre rail network between Montreal and Vancouver, with links to hubs in the U.S. Midwest and Northeast.
The stock has… Read More

Telus further plans for 5G

TELUS $49.19 (Toronto symbol T; Shares outstanding: 600.0 million; Market cap: $29.6 billion; TSINetwork Rating: Above Average; Dividend yield: 4.4%; www.telus.com) is Canada’s third-largest wireless carrier, after Rogers Communications (No. 1) and BCE (No. 2). It also sells landline telephone and Internet services in B.C., Alberta and… Read More