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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LOBLAW COMPANIES, $62.64, (Toronto symbol L; Shares outstanding: 347.4 million; Market cap: $21.8 billion; TSINetwork Rating: Above Average; Dividend yield: 2.1%; www.loblaw.ca) is a buy. The company continues to benefit from strong demand for groceries as COVID-19 lockdowns prompt people to eat more of their meals at home.
In the… Read More
IBM, $122.36, is still a buy. The company (New York symbol IBM; Shares o/s: 893.6 million; Market cap: $107.5 billion; TSINetwork Rating: Above Average; Yield: 5.3%) announced recently that it will spin off its Managed Infrastructure Services unit. That legacy business helps clients manage their datacentres.
Now, the company is… Read More
BANK OF NOVA SCOTIA $76.98 (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $92.9 billion; TSINetwork Rating: Above Average; Dividend yield: 4.7%; www.scotiabank.com) is Canada’s third-largest bank.
Thanks to an improving economic outlook, the bank is reversing some of the provisions it booked to cover bad loans… Read More
Due to COVID-19, 3M had to quickly ramp up its production of various safety equipment, including N95 respirator masks (they block 95% of very small particles, including those containing the virus). That offset its slow sales to makers of automotive and electronic goods. However, demand… 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 rebounded 39%, close to all-time highs, as investors again appreciate Intact’s underlying business strength. Meantime, we think this Power Buy is poised… Read More
CN’s shares have shot up nearly 50% from their March 2020 low of $92. Investors should expect the company to continue benefiting as the economy recovers from the COVID-19 pandemic. The recent cancellation of the Keystone XL oil pipeline by new U.S. president Joe Biden… Read More
CP Rail is well positioned to keep weathering any COVID-19-related slowdowns or disruptions to its shipping markets. Metro is in a similar position as it continues to build its strong market position as an essential service during the pandemic. Both stocks are still buys.
CANADIAN PACIFIC RAILWAY… Read More
J.P. Morgan remains a great choice for the Finance segment of your portfolio despite the negative impact of low interest rates. That’s due to its strong exposure to fee-based activities like corporate financing. The bank should also resume regular dividend increases in 2021.
J.P. MORGAN CHASE… Read More
We’ve singled out one stock from each of our three portfolios—Conservative, Aggressive and Income—as your top choices for new buying in 2021.
All three of these picks have held up well during the COVID-19 pandemic. They’re poised to move even higher as the rollout of new… Read More
For 2021, we have singled out three stocks as #1 buys for you, one from each of our portfolios—Conservative, Aggressive and Income.
All three are in a strong position to weather the current wave of COVID-19. Each is also poised for solid gains as new vaccines… Read More
CANON INC. ADRs $20 (www.canon.com) is a hold. The company’s sales in the third quarter of 2020 fell 11.1%, to $7.16 billion from $8.05 billion a year earlier. That’s mainly because the shutdown of offices due to COVID-19 hurt demand for its printers, copiers and other office equipment… Read More
PEPSICO INC. $145 is still a hold. The company (Nasdaq symbol PEP; Conservative Growth Portfolio, Consumer sector; Shares o/s: 1.4 billion; Market cap: $203.0 billion; Price-to-sales ratio: 2.9; Divd. yield: 2.8%; TSINetwork Rating: Above Average; www.pepsico.com) has spent $10 billion in the past two years buying makers of… Read More
CANADIAN NATIONAL RAILWAY CO. $142 (www.cn.ca) is a buy. The railway shipped 3.12 million tonnes of Canadian grain and related products in the month of November 2020. That’s a new record for the month. CN expects grain volumes will continue to improve. As well, its recent purchase of… Read More
Even with the economic disruption brought on by COVID-19, we like the long-term prospects for investors in TD Bank. This Candian big bank is as well prepared—and well capitalized—to handle the current shock as it was during the 2008-2009 financial crisis. We still see TD… Read More
Walmart’s shares have jumped 27% since the start of 2020. That’s thanks to strong consumer demand for food and household items during the COVID-19 pandemic.
The stock is now poised to move even higher. Governments continue to designate Walmart’s stores as “essential,” so they remain open… Read More
INTACT FINANCIAL $147.78 is still a buy. The insurer (Toronto symbol IFC; TSINetwork Rating: Extra Risk) (www.intactfc.com; Shares o/s: 143.0 million; Market cap: $21.0 billion; Dividend yield: 2.3%), in conjunction with Danish insurer Tryg A/S, has made a $9.3 billion U.S. takeover bid for U.K.-based… Read More
COVID-19 has helped spur demand for BCE’s Internet services as more people work from home, but it has also hurt ad revenue at its media outlets. We’re confident the company’s profits will start moving up again, particularly as more wireless users upgrade to its new… Read More
CANADIAN NATIONAL RAILWAY CO. $146 is a buy. The company (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 709.8 million; Market cap: $103.6 billion; Price-to-sales ratio: 7.3; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway, stretching across the country, and… Read More
MCDONALD’S CORP. $215 is a buy. The company (New York symbol MCD; Conservative Growth Portfolio, Consumer sector, Shares outstanding: 743.5 million; Market cap: $159.9 billion; Price-to-sales ratio: 8.4; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.mcdonalds.com) now operates over 38,000 restaurants in 120 countries.
McDonald’s plans to close about… Read More
CANADIAN PACIFIC RAILWAY LTD. $388 remains your #1 Conservative stock for 2020. The company (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 135.6 million; Market cap: $52.6 billion; Price-to-sales ratio: 6.7; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.cpr.ca) has gained roughly 16% since… Read More
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