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

Take this second chance to buy more

CANADIAN PACIFIC RAILWAY LTD., $281, is still our #1 Conservative Buy for 2019. The railway stock (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 139.8 million; Market cap: $39.3 billion; Price-to-sales ratio: 5.1; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.cpr.ca) has moved down from… Read More

TC Energy pays you in two ways

TC Energy (formerly called TransCanada) has been a terrific performer for our conservative investors (up over 425%) since we first recommended it in our premiere issue (January 1995). In the past year, alone, the stock has gained nearly 30%. Yet, it remains attractively priced in… Read More

Dividend hikes are only part of their appeal

IMPERIAL OIL LTD. $33.93 (Toronto symbol IMO; Shares outstanding: 764.2 million; Market cap: $26.3 billion; TSINetwork Rating: Average; Dividend yield: 2.6%; www.imperialoil.ca) is Canada’s third-largest publicly traded oil company, after Suncor (No. 1) and Canadian Natural Resources. U.S.-based ExxonMobil (New York symbol XOM) owns 69.6%… Read More

3M focuses on its core products

3M COMPANY $164 (New York symbol MMM; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 575.3 million; Market cap: $94.3 billion; Price-to-sales ratio: 2.9; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.3m.com) produces more than 60,000 items, including air purifiers, adhesives, bandages and components for medical devices… Read More

Texas Roadhouse is the better buy

TEXAS ROADHOUSE $53.53 (Nasdaq symbol TXRH; TSINetwork Rating: Extra Risk) (502-426-9984; www.texasroadhouse.com; Shares o/s: 71.8 million; Market cap: $3.8 billion; Divd yield: 2.2%) is a full-service, casual-dining chain with 591 locations spread across 49 U.S. states and 10 foreign countries. Its restaurants operate under two… Read More

Intact adds to niche

INTACT FINANCIAL $130.77 (Toronto symbol IFC; TSINetwork Rating: Extra Risk) (416-341-1464; www.intactfc.com; Shares o/s: 139.2 million; Market cap: $18.2 billion; Divd. yield: 2.3%) will buy two regional insurers to continue its push in to specialty insurance. The company is paying a total of $1 billion… Read More

Updating Pengrowth Energy Corp., Home Capital Group Inc. and Canadian National Railway Co.

PENGROWTH ENERGY CORP. $0.35 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 560.0 million; Market cap: $196.0 million; Price-to-sales ratio: 0.4; Dividend suspended in January 2016; TSINetwork Rating: Speculative; www.pengrowth.com) has two main properties: its Lindbergh oil sands project in Alberta and its… Read More

CP Rail sets a record

CANADIAN PACIFIC RAILWAY $313.97 (Toronto symbol CP; shares outstanding: 147.7 million; Market cap: $43.5 billion; TSINetwork Rating: Above Average; Dividend yield: 1.1%; www.cpr.ca) transports freight over a 23,700-kilometre rail network between Montreal and Vancouver, and to hubs in the U.S. Midwest and Northeast.
The company shipped a record 26.8… Read More

Asia’s growth supports their high dividends

MANULIFE FINANCIAL CORP. $21.91 (Toronto symbol MFC; Shares o/s: 2.0 billion; Market cap: $42.9 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; 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

Weston comes with a hidden asset

George Weston is a holding company, with full ownership of, or a signifiant stake in, several businesses. Most holding companies trade for less than the combined value of their assets. This “holding company discount” represents a special kind of hidden asset. But, when the firm… Read More

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