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
Blue chip stocks: Why Mr. Buffett agrees with us about IBM
We were pleased to learn in November 2011 that Warren Buffett had made a major investment in IBM. Indeed, Mr. Buffett was recently quoted as saying that he was “late to the IBM party,” but even so he has committed a good deal of money to it. He now owns 6% of the company. We made IBM our #1 U.S. Stock of the Year in our Wall Street Stock Forecaster newsletter in 2010. The price was $126—yet it has risen over 60% since then. We think IBM will go still higher in years to come, and it appears Warren feels the same way....
2 min read
Pat McKeough
Blue chip stocks: Transcontinental publications image
Blue Chip Stocks
Blue chip stocks: Websites bolster Transcontinental’s printing empire
Blue chip stocks: Transcontinental publications image
TRANSCONTINENTAL INC. (Toronto symbol TCL.A; www.tctranscontinental.com) is the largest commercial printer in Canada and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental also has over 1,000 websites, which supply 16% of its total revenue. These websites will become more important to this blue chip stock’s growth in the next few years as advertisers spend more on the Internet than print products....
1 min read
Pat McKeough
As pipeline capacity lags, CN ships more oil
Blue Chip Stocks
Blue chip stocks: CNR connects with Alberta’s oil sands
Blue chip stocks: Canadian National Railway image
CANADIAN NATIONAL RAILWAY CO. (Toronto symbol CNR; www.cn.ca) operates the largest freight rail network in Canada. It also serves 16 U.S. states. Ottawa nationalized CNR in 1918 because of the vital role the company played in Canada’s early growth. CNR became a publicly traded company in 1995. The company is upgrading its Alberta rail networks to take advantage of expanding oil sands development. These investments are helping drillers in remote areas without pipelines ship their heavy oil to refineries and other destinations....
1 min read
Pat McKeough
Blue Chip Stocks
Blue chip stocks: General Mills adds yogurt maker and keeps long dividend record intact
General Mills, New York symbol GIS, is one of the world’s largest food makers. Its top brands include Big G (cereal), Green Giant (canned and frozen vegetables), Pillsbury (baking dough), Old El Paso (tacos) and Progresso (soups and salads). In its fiscal 2012 first quarter, which ended August 28, 2011, General Mills’ sales rose 8.9%, to $3.8 billion from $3.5 billion a year earlier. That’s mainly because the company raised its prices to offset rising fuel and ingredient costs. As well, General Mills recently bought 51% of the company that makes Yoplait yogurt. This purchase accounted for a third of General Mills’ sales growth in the latest quarter. However, earnings fell 14.1%, to $405.6 million, or $0.61 a share, from $472.1 million, or $0.70 a share, a year earlier. Besides higher ingredient costs, earnings were also held back by the cost of the Yoplait purchase and a 7% rise in advertising spending....
1 min read
Pat McKeough
Blue Chip Stocks
Blue chip stocks: General Electric buys back preferred shares from Warren Buffett’s company
General Electric Co., New York symbol GE, plans to buy back all of the preferred shares it sold to Berkshire Hathaway Inc. (New York symbol BRK.B), the holding company controlled by billionaire investor Warren Buffett. GE sold these shares to Berkshire during the 2008-2009 financial crisis. The cash from the sale helped stabilize GE’s finance division. The company will pay $3.3 billion to buy back these shares. That’s nearly equal to the $3.5 billion, or $0.33 a share, that GE earned in the three months ended June 30, 2011. However, this purchase will save the company $300 million a year in dividend payments....
1 min read
Pat McKeough
stock market stock image
Blue Chip Stocks
Investor Toolkit: Balance small and large cap stocks in your portfolio
Shares of large companies generally rebounded well after a market crisis. Investors refer to these companies as large cap stocks.
1 min read
Pat McKeough
Blue Chip Stocks
Blue chip stocks: Stake in Chinese bank adds to Scotiabank’s growing overseas assets
Bank of Nova Scotia, Toronto symbol BNS, continues to benefit from its growing banking operations in the Caribbean, Latin America, South America and Asia. Last week, Bank of Nova Scotia agreed to buy 19.99% of the Bank of Guangzhou; the Chinese government owns the remaining 80.01%. This bank is the 29th largest in China, with 84 branches. Bank of Nova Scotia will pay $719 million when the deal closes in December 2011. To put that in context, it earned $1.2 billion, or $1.11 a share, in the three months ended July 31, 2011....
2 min read
Jim Bates
Blue Chip Stocks
Large cap stocks: Record revenue, strong earnings for 3M
3M Company, New York symbol MMM, makes over 55,000 consumer and industrial products, including Post-it notes, Scotch tape, Scotch-Brite cleaning products, Scotchguard fabric protection and Thinsulate insulation.

3M is one of the large cap stocks we analyze in Wall Street Stock Forecaster, our newsletter that recommends stocks for the part of your portfolio you devote to U.S....
1 min read
Scott Clayton
Blue Chip Stocks
Blue chip stocks: Amex earnings rise on strong consumer spending
American Express Co., New York symbol AXP, gets most of its revenue from the fees it charges merchants when consumers use its credit and charge cards. It also provides travel-agency services. American Express is one of the blue chip stocks we analyze in Wall Street Stock Forecaster, our newsletter for investing in the U.S. stock markets. The company continues to set aside less money to cover bad loans as more of its cardholders pay their bills on time....
1 min read
Jim Bates
Blue Chip Stocks
Large cap stocks: How to profit from the rising use of wireless devices
Demand for wireless services is rising sharply in North America. That’s partly because device makers continue to release new cellphones and other wireless devices, like the Kobo e-book reader and Apple iPad. As well, more customers are switching from traditional phones (or land lines) to wireless services. Smartphones, in particular, have become increasingly popular. Today’s top-selling smartphones are Apple’s iPhone, Research in Motion’s BlackBerry, and devices that run Internet search provider Google’s Android operating system....
3 min read
Jim Bates
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