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 their stock portfolios 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.

Most of 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.

The blue chip stocks you hold in your portfolio 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.

A blue chip company definition and some examples of blue chip companies we recommend

We define a blue chip company as a well-established company with attractive business prospects. Well-established stocks have the asset size and the financial clout—including solid balance sheets and strong cash flow—to weather market downturns or changing industry conditions.

Blue chip stocks have strong positions in healthy industries. They also have strong management that will make the right moves to remain competitive in a changing marketplace.

Because of this, blue chip companies can give investors an additional measure of safety in volatile markets. And the best ones offer an attractive combination of moderate p/e’s (the ratio of a stock’s price to its per-share earnings), steady or rising dividend yields (annual dividend divided by the share price) and promising growth prospects.

How can blue chip companies benefit your portfolio?

We advise investors to look for blue chip companies that are likely to pay off if business and the stock market are good, but that won’t hurt them too much during those inevitable periods when business or the markets are bad.

If you follow two of the main pillars of our approach—diversifying across most if not all of the five main economic sectors, and sticking mainly to well-established companies—you can be almost certain of long-term gains in excess of what you’d get with any other investment approach.

In a deep or long-lasting market setback, your blue chip stocks will tend to go down, along with everybody else’s. But we think they will go down less and recover sooner. But nobody can guarantee that. For that matter, nobody can put a limit on how deep a market setback will go, nor how long it will last.

If a deep or long-lasting market setback does occur, any aggressive stocks you own are likely to fall more than shares of blue chip companies. The eventual recovery of aggressive stocks is also less certain. That’s why we recommend that you hold the bulk of your investment portfolios in securities from blue chip companies.

If all your stocks offer good “value”—if they trade at reasonable multiples of earnings, cash flow, book value and so on—then your risk is lower. However, standards change. For years stocks were considered to be good value if they traded at 10 to 20 times earnings.

Many attractive stocks now trade at 15 to 25 times earnings, or even more. If their earnings drop due to business conditions, and if the overall market p/e ratio falls to, say, 10 to 15 times earnings, then even stocks of blue chip companies are going to suffer.

Strong consumer product companies share a number of characteristics. These include geographic diversity, a record of rising cash flow and strong balance sheets

At TSI Network, we like high-quality blue chip consumer product companies because they can provide stability during a recession or economic slowdown. Typically, consumer-product companies sell staples, like soap, soup and beverages that consumers must buy no matter what the economy is doing.

Strong consumer product companies share a number of characteristics. These include geographic diversity to protect them from regional economic difficulties, a record of rising cash flow and strong balance sheets. All these are characteristics of blue chip stocks.

We believe that a record of increasing dividend payments is a good indication of a strong company, especially in a slow economy. High-quality blue chip stocks will usually be in a position to remain profitable during almost any type of economic hardship or recession. Plus, you get paid dividends and earn income while you hold these stocks even if share prices are falling.

Supermarket operators know how to weather economic storms

Loblaw Companies Ltd. (Toronto symbol L) is Canada’s largest food retailer with 1,089 supermarkets. Those stores operate under a variety of banners, including Loblaws, Zehrs, Provigo, Real Canadian Superstore and No Frills. In March 2014, it acquired the Shoppers Drug Mart chain, which now operates 1,361 drugstores across Canada.

A big reason for Loblaw’s recent success is its discount-price chains, which operate under the No Frills and Maxi banners. To keep costs down, these stores originally carried only a small number of products (just 16 items), featured minimal in-store displays and required customers to bring their own bags. Today, they are more like regular supermarkets with a much larger selection of goods, minus the premium brands. They also offer fewer in-store services, such as bakeries and delis.

In 2025, Loblaw plans to open 80 new stores, including 50 discount outlets. It will also upgrade 300 of its existing stores and open 100 new medical care clinics.

In addition to new stores, the company is building a new distribution warehouse just north of Toronto in Newmarket, Ontario. This new facility, which is set to open in 2025, will use automated sorting and other equipment. That will help keep Loblaw’s labour costs down and improve its overall efficiency.

In all, the company expects to have spent $2.2 billion in 2025 on these projects.

Private labels are another way Loblaw is attracting cost-conscious shoppers. These products are about 25% cheaper than national brands. Those include its popular no name line of food and household products, which it launched in 1978. The company later launched its President’s Choice line in 1984. Other brands include PC Blue Menu (healthier foods), PC Green (environmentally friendly products) and PC Organics (natural ingredients).

The company has paid dividends for over 50 years. With the July 2025 payment, Loblaw raised your quarterly dividend by 10.0%. Investors now receive $0.1411 a share instead of $0.1283. The new annual rate of $0.5643 yields 1.0%.

Besides the consumer product company sector, there are four other major economic sectors Manufacturing & Industry; Resources; Finance; and Utilities. All of these sectors have blue chip companies in them that we recommend. Below is a list of factors we like to see in companies when we look for overall investment quality.

Financial factors:

• 5 to 10 year history of profit. Companies that make money regularly are safer than chronic or even occasional money losers.
• 5 to 10 years of dividends. Companies can fake earnings, but dividends are cash outlays. If you only buy dividend-paying value stock picks, you’ll avoid most frauds.
• Manageable debt. When bad times hit, debt-heavy companies often go broke first.

Safety factors:

• Industry prominence if not dominance. Major companies can influence legislation, industry trends and other business factors to suit themselves.
• Geographical diversification. Canada-wide is good, multinational better. There’s extra risk in firms confined to one geographical area.
• Freedom to serve (all) shareholders. High-quality stock picks must be free of excess regulation, free of dependence on a single customer, and free from self-dealing insiders or parent companies.

Survival/growth factors:

• Freedom from business cycles. Demand periodically dries up in “cyclical” businesses, such as resources and manufacturing. That’s why you need to diversify. Invest in utility, finance and consumer stocks, along with cyclical resource firms and manufacturers.
• Ability to profit from secular trends: These trends outlast ordinary business booms and busts, because they reflect ongoing social change. Free trade and rising environmentalism are just two examples of secular trends.
• Ownership of strong brand names and an impeccable reputation. Customers keep coming back to these businesses, and will try their new products.

Investing in profitable blue chip stocks will become a lot easier after learning these tips!

You can look at blue chips as among the strongest and most secure stocks in the market.

Blue chip stocks are generally well-established, dividend-paying corporations with strong business prospects. These are companies that also have strong management that will tend to make the right moves to compete in a changing marketplace.

Investing in blue chip stocks can provide an additional measure of safety in today’s turbulent markets. And the best ones offer an attractive combination of low p/e’s (price-to-earnings ratio), steady or rising dividend yields (annual dividend divided by the share price), and promising growth prospects.

Our 3-pronged approach to investing in the best stocks

We recommend blue chip stocks in The Successful Investor and Wall Street Stock Forecaster. These blue chip stocks have a history of earnings and, in most cases, dividends. They have established their value over the long term. Like all stocks, they can fluctuate widely and many suffer in a long-term market downturn, but they offer a higher probability of long-term gains.

We feel most investors should hold a substantial portion of their investment portfolios in securities from blue chip companies. 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, compared to alternative investments.

Here’s how we suggest investing in blue chip stocks:

1. Invest mainly in high quality stocks.

It’s essential to invest in stocks that have some history of sales, if not profits. If you break this rule and invest in, say, junior mines or tech startups, you should only do so if you have a high opinion of the value of the junior’s assets and/or business plan, and you buy with money you can afford to lose. After all, you could very well be mistaken about their value. Your low-quality buys might eventually wind up worthless.

2. Spread your stocks over the five main sectors.

If you diversify across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities), and stick mainly to high quality blue chip stocks—then you can be almost certain of long-term gains in excess of what you’d get with any other investment approach.

3. Avoid or downplay stocks in the broker/media limelight.

Investors can build up unrealistic expectations when blue chip stocks spend time in that limelight. When broker/media favourites fail to live up to those expectations, they drop much further than they would have if they had been less widely followed.

Also, “holding for the long term” usually only pays off with investments in high-quality stocks. If you buy low-quality or speculative stocks, time tends to work against you. The longer you hold them, the likelier you are to lose money.

Buying high-quality blue chip shares will maximize investor returns—but you also
need to know when to sell them.

We recommend that most investors hold the bulk of their portfolios in blue chip stocks. That’s because blue chip shares offer potential for capital gains growth as well as regular dividend income.

Recently, a long-time reader and portfolio management client asked a question that other investors may wonder about in today’s turbulent markets. He wrote,

“You constantly remind members to have a balanced portfolio and strategy for long-term success when investing. But when do you take profits? You have mentioned a couple of times to sell, such as when a stock makes up too much of your total portfolio, or if a company shows questionable management or business decisions. My main question is why don’t we sell when stocks move up and there are profits to be had?”

We have often responded to that question. In hindsight, it always seems easy to spot when you should sell your blue chip shares. Spotting market tops and market bottoms is simple. But trying to spot those tops and bottoms as they occur is harder. Naturally we looked at all sorts of market theories and signals that purport to tell you how to do it. They all seem to have “worked,” at least some of the time. But none worked consistently.

The problem is that market tops and market bottoms can take place in response to anything that is going on in the market, the economy and the world. But buy and sell signals focus on a tiny smidgen of that vast amount of data. A market signal “works” as an investing strategy when the market is responding to the same slice of data that the signal focuses on. It quits working as soon as the market’s focus moves on to something else.

Bonus: Profit from stock selection rather than stock market predictions

Investors who succeed over decades—the Warren Buffett’s of the investment world—rarely, if ever, talk about spotting market tops and bottoms. They are far more likely to talk about successful investments than wondering when they should sell their blue chip shares. Most have come to see, often after a period of costly stock-trading errors, that you make most of your stock- market profits through stock selection rather than stock market predictions.

We always have an opinion of some sort about the market’s outlook, and we’re happy to share that opinion with our readers. The first response to our client’s question was: “We see further weakness in the next month or two.” And the market did indeed take several steep declines….

Why not sell, if the market appears to be headed down as it was then—and then buy back in a month or two when the market is lower?

Avoid selling your blue chip shares way too early

It’s all too easy to sell a stock that looks like it’s headed for a downturn, only to buy another that is headed for a collapse. For that matter, if you make a habit of selling whenever you feel the market’s risk has gone up, you will wind up selling your best stocks way too early.

You can always find a rationale for selling. Market commentators are continually thinking up new ones, based on recent market strength or weakness, historical market patterns, political or economic predictions, changes in tax policies—the list is endless. This is a good thing. After all, you can only buy a stock if somebody who owns it wants to sell.

Before you act on a selling rationale, take a broader look. Consider facts about the stock, and about your investment goals and temperament. If the selling rationale makes sense and you find additional good reasons to sell, then selling may be the right thing to do. But it’s always a bad idea to sell a good stock for trivial or transitory reasons.

Some blue chip stocks do not pay a dividend. By re-investing their revenue in the company rather than distributing it to shareholders they are able to sustain exceptional growth over time. One prominent example is a leading U.S. blue chip, Microsoft (which we cover in our special advisory on U.S. investing, Wall Street Stock Forecaster). It had established itself as one of the giants of the tech industry well before it finally declared a dividend in January 2003.

But stocks that don’t pay dividends are exceptions in this category. The majority of the stocks we regard as blue chips reward investors with both dividend income and capital gains. In many cases, they raise their dividends regularly.

When you add dividend stocks to your portfolio (they may be blue chips or on the way to blue chip status), dividend yield is often your most important consideration.

But in some cases, dividend yield can be misleading.

The yield is certainly one of the most concrete things about an 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.

But yield, and especially a high dividend yield, can give you a false sense of security. Investors have a natural tendency to think that all investment income is nearly as safe and predictable as bank interest. In fact, investment income can dry up in a heartbeat. Companies are sometimes unable to keep paying a long-standing dividend, and they sometimes spring the bad news on you with no warning.

In fact, high yield may be a danger sign. It may mean insiders are selling and pushing the price down. A falling share price makes yield go up (because you use the latest income to calculate yield). When an investment does cut or halt its income, its yield collapses.

A classic case is that of Yellow Pages Income Fund. When it first issued units in 2003, it was widely trumpeted by brokers and in the media as a well-established company (although we viewed it as the over-the-hill division of a formerly well-established company).

The company stayed in the limelight even though its high dividend yields—consistently above 10%—ought to have been a warning sign.

In August 2011, the company’s credit rating was downgraded to junk status; in September, it cut its dividend altogether. By then the yield was above 30%. We consistently advised investors to stay away from the shares of Yellow Pages Income Fund.

51 consecutive years of dividend increases

If you stick with quality dividend stocks, the income you earn can supply a significant percentage of your total return.

For instance, conservative stocks such as utilities usually offer sustainable dividend yields in addition to prospects of steady growth. Two of the stocks we cover regularly in our flagship advisory, The Successful Investor, are good examples of this dependability.

Emera Inc. (symbol EMA on Toronto; www.emera.com) owns 100% of Nova Scotia Power, that province’s main electricity supplier. It also holds interests in several power plants and natural gas pipelines in the U.S. and the Caribbean.

In July 2016, Emera purchased Teco Energy for $13.9 billion. That firm supplies electricity and natural gas to 1.053 million customers in Tampa Bay, Florida, as well as natural gas to 5140,000 customers in New Mexico.

Emera continues to reward investors with regular dividend increases. In fact, the company has increased the rate each year for past 18 years.

The company last raised your quarterly dividend with the November 2024 payment by 1.0%, to $0.725 a share from $0.7175. The new annual rate of $2.90 yields a high 4.5%.

To help free up cash for new investments in its operations and strengthen its balance sheet, Emera now plans to increase its annual dividend rate by between 1% and 2% annually, down from its previous target of 4% to 5%.

Slowing the pace of dividend hikes will help bring down the company’s payout ratio (dividend payments divided by earnings before unusual items) from 93% in 2023 to a more sustainable 80% by 2027.

Fortis Inc. (symbol FTS on Toronto; www.fortis.ca) owns electrical utilities across Canada, the U.S. and the Caribbean. It also distributes natural gas in British Columbia, Arizona and New York State.

Fortis last raised your quarterly dividend with the December 2024 payment to $0.615 a share, up 4.2% from $0.59. The new annual rate of $2.46 yields a solid 3.6%. The company has now increased its annual payout for 51 consecutive years.

Between 2025 and 2029, the company now plans to invest $26.0 billion in new projects. That’s $1.0 billion higher than its previous plan. These investments should increase Fortis’s rate base from $39.0 billion in 2024 to $53.0 billion in 2029. Regulators use rate base—the value of a firm’s assets—to calculate a utility’s approved rate of return and power rates.

Thanks to the additional cash flows, Fortis plans to increase the annual dividend rate between 4% and 6% each year through 2029.

You can improve your investment safety by focusing on stocks with long histories of dividends. Dividends are more dependable than capital gains as a source of investment income.

At the same time, there are several important dates that you should know when you invest in dividend-paying stocks—and one strategy depending on dividend dates that we believe it’s better to avoid.

Companies that pay dividends have a “record” date. That raises two interesting questions investors often ask.

Does the record date determine who owns the stock on that day and who gets the dividend? If so, why not buy stock the week before the day of record, collect the dividend and then sell the stock? Here is what you need to know.

There are a number of dates related to payments from dividend stocks:

1. Declaration Date: Several weeks in advance of a dividend payment, a company’s board of directors sets the amount and timing of the proposed payment. The date of that announcement is known as the declaration date.
2. Payable Date: is the date set by the board on which the dividend will actually be paid out to shareholders.
3. Record Date: Only shareholders who hold dividend stocks before the payable date will receive the dividend payment. That date is known as the record date, and is set any number of weeks before the payable date. Recent examples include TC Energy Corp.’s dividend of $0.85 a share payable on Thursday, July31, 2025 to shareholders of record at the close of business on Monday, June 30, 2025.
4. Ex-dividend Date: Due to recent changes to the settlement cycle for Canadian and U.S. securities, the ex-dividend date is now the same as the as record date, instead of one business day before. If you buy dividend stocks before their ex-dividend date, you will get the dividend. That’s when a stock is said to trade cum-dividend. If you buy on the ex-dividend date or later, you won’t get the dividend.

What is “dividend capture?”

“Dividend capture” is the trading technique of buying dividend stocks just before the dividend is paid, holding it just long enough to collect the dividend, then selling it. If you can sell it for as much as you paid for it, you have “captured” the dividend at no cost, other than the transaction costs.

To do this, you would buy shares in dividend stocks just before the ex-dividend date, so that you would be a shareholder of record on the record date, and would receive the dividend. Because the stock falls by the amount of the dividend on the ex-dividend date, the strategy then calls for you to wait for the stock to move back to the price where you bought it before the ex-dividend date. At this point, you sell the stock for a break-even trade.

This can pay off when stock markets are rising. Of course, any strategy that leads you to buy can pay off when stock markets are rising. However, you have to pay a brokerage commission to buy the shares, and a commission to sell. The commissions can eat up much of the dividend income. They may even exceed the dividend income.

Dividend-capture strategies may have appeal for securities dealers or brokers who are executing huge trades with very low transaction costs. They may also have tax benefits, particularly for corporations. But the average investor has little chance of making a significant profit.

While we believe that investors should devote the largest part of their portfolios to large, well-established “blue chip” securities, this does not rule out smaller stocks. Indeed, a strong portfolio anchored with blue chip stocks offers the opportunity to invest in promising smaller companies without subjecting yourself to excessive risk. And the best of these smaller companies may one day grow into blue chips themselves.

Shares of large, well-established companies generally have a market “cap” (that’s short for “capitalization,” or total value of shares outstanding) of several billion dollars or more. They usually rebound better than other stocks from downturns like the 2007-2009 market crisis and the volatility that struck stock markets in 2015, 2016, 2018 and the first half of 2020. They also did the same in early 2025 with the threat of wide-sweeping tariffs.

Some investors may wonder whether large caps will continue to outperform. They wonder if they should sell their large cap stocks and instead buy more “small caps.” These are smaller companies with a market capitalization below some arbitrary figure, such as $1 billion.

• Look beyond market cap to judge a company’s investment quality. Large cap stocks can be leaders in giant fields with expanding potential. Or they can be wounded behemoths in declining fields. The investment quality of small caps varies even more. They range from near-worthless promotional issues to leaders in small but fast-growing fields.To tell good companies from bad, you have to look at a variety of factors much subtler than market cap. They include earnings, dividends, the strength of the corporate balance sheet, the strength of the company’s products, customer loyalty or fickleness, and so on.
• A large cap stock may have a high or low price per share. Remember, a company’s market cap is equal to the total number of shares outstanding multiplied by the price per share. However, a large cap stock can have a low price per share if it has many shares outstanding.

To succeed in today’s highly volatile markets, you’ll need to own shares in a variety of companies of varying sizes. But here’s one thing your best choices will have in common: each will be about the right size to succeed in the business it is in.

There are many blue chip dividend-paying stocks worthy of long-term investment. But we specify seven that we rank as Best Buys. They are spread across different sectors of the economy.

BANK OF NOVA SCOTIA $86 (Toronto symbol BNS; Finance sector; Dividend yield: 6.3%; TSINetwork Rating: Above Average; www.scotiabank.com) is Canada’s fourth-largest bank by market cap.

The bank recently announced that it was shifting its business away from poorly performing Latin American markets (Mexico, Peru, Colombia and Chile). As a result, it now plans to earmark 90% of its capital to its main markets of Canada, the U.S. and Mexico. That’s up from 70% in the most recent fiscal year.

Under that plan, it recently acquired 14.92% of U.S.-banking firm KeyCorp (New York symbol KEY) for $2.8 billion U.S. Based in Cleveland, Ohio, KeyCorp provides a variety of financial services through 1,000 branches in 15 states.

Bank of Nova Scotia is also transferring its operations in Colombia, Costa Rica and Panama to banking firm Davivienda. In return, the bank will receive a 20% equity stake in Davivienda.

With the July 2025 payment, Bank of Nova Scotia raised your quarterly dividend by 3.8%. Investors now receive $1.10 a share instead of $1.06. The new annual rate of $4.40 yields a high 5.1%. On top of that, it plans to buy back up to 1.6% of its outstanding shares.

Bank of Nova Scotia last raised your quarterly dividend with the July 2023 payment. Investors now receive $1.06 a share, up 2.9% from $1.03. The new annual rate of $4.24 yields a high 6.3%.

Bank of Nova Scotia is a buy. Recommended in The Successful Investor, TSI Dividend Advisor and Canadian Wealth Advisor.

BCE INC. $34 (Toronto symbol BCE; Utilities sector; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest traditional telephone service provider.

It has 1.73 million residential customers in Ontario, Quebec, Manitoba and the Atlantic provinces. It also has 4.42 million high-speed Internet users and 2.10 million fibre-optic TV subscribers. In addition, the company sells wireless services to 13.56 million users across Canada (including users of other mobile devices like tablets), and it owns TV and radio stations.

Due to the current economic uncertainty and its high debt load—BCE’s long-term debt of $32.52 billion (as of June 30, 2025), is a high102% of its $32.0 billion market cap—the company has cut your quarterly dividend by 56.1%.

Starting with the July 2025 payment, investors now receive $0.4375 a share instead of $0.9975. The new annual rate of $1.75 still yields a solid 5.1%.

BCE has now completed its purchase of Ziply Fiber, which offers high-speed Internet access and telephone services through a fibre-optic network to residential and business customers in Washington State, Oregon, Idaho and Montana. The company paid $3.65 billion U.S. in cash ($5.04 billion Canadian) for this business. It also assumed $2.65 billion (Canadian) of Ziply’s debt.

In a separate transaction, the company has also formed a new partnership with Public Sector Pension Investment Board (PSP).

BCE will continue to own 100% of Ziply, which can potentially reach 1.5 million customers. However, PSP will acquire 51% of the new firm that will expand Ziply’s network to 8 million potential customers. PSP has committed $1.5 billion U.S. to this joint venture.

BCE is a buy. Recommended in The Successful Investor, TSI Dividend Advisor and Canadian Wealth Advisor.

TC ENERGY CORP. $72 (Toronto symbol TRP; Utilities sector; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.tcenergy.ca) generates steady cash flow for investors mainly through a 93,700-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. Its other operations include 4,900 kilometres of crude oil pipelines and seven power plants.

On October 1, 2024, TC completed the spinoff of its oil pipeline business as separate company South Bow Corp. (Toronto symbol SOBO). Investors received 0.2 of a South Bow share for every TC share they held. They will not be liable for capital gains taxes until they sell their new shares.

Due to the loss of the South Bow assets, TC cut your quarterly dividend by 14.3% with the January 2025 payment. However, the company raised your quarterly dividend by 3.3% with the April 2025 payment, to $0.85 a share from $0.8225. The new annual rate of $3.40 yields a high 5.0%. Going forward, TC also intends to raise its dividend rate by 3% to 5% annually.

TC Energy is a buy. Recommended in The Successful Investor, TSI Dividend Advisor and Canadian Wealth Advisor.

CANADIAN TIRE CORP. $170 (Toronto symbol CTC.A; Consumer sector; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.canadiantire.ca) began operating in 1922 and is now one of Canada’s leading retailers. The company operates 503 Canadian Tire stores. They sell automotive parts and products, and household and sporting goods. Franchisees run most of the outlets.

Canadian Tire has several other major retail chains: Mark’s sells casual and work clothing through 383 stores; and the Sport Chek Group sells sporting goods and athletic wear through 367 outlets, including Sport Chek and Sports Experts.

With the March 2025, payment, Canadian Tire raised your quarterly dividend by 1.4%, to $1.775 a share from $1.75. The new annual rate of $7.10 yields a high 4.2% for the class A non-voting shares. The company also intends to buy back $400 million of its class A shares by March 10, 2026.

The company plans to spend between $525 million and $575 million on new stores and upgrades in 2025. It also recently launched “CeeTee”, a new shopping assistant app that uses artificial intelligence to help customers select the right tires for their vehicles. The company will probably expand CeeTee to other products.

Canadian Tire is a buy. Recommended in The Successful Investor and TSI Dividend Advisor.

CANADIAN PACIFIC KANSAS CITY LTD. $105 (Toronto symbol CP; Manufacturing & Industry sector; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.cpr.ca) took its current form in April 2023, when it acquired U.S.-based railway Kansas City Southern.

CP paid $31 billion U.S. in cash and shares for KCS. At that time, CP investors owned 72% of the merged company, with KCS shareholders holding the remaining 28%.

The new CPKC ships freight over a 32,190-kilometre rail network. That line runs mainly between Montreal and Vancouver, with links to hubs in the U.S. Midwest and Northeast. With the addition of KCS, the new company also connects with important hubs and ports on the U.S. Gulf Coast and in Mexico.

Despite the uncertainty over tariffs, CPKC expects its earnings in 2025 will probably rise 12% to $4.76 a share. The stock trades at a reasonable 22.1 times that forecast. The company also raised your quarterly dividend 20.0% with the July 2025, payment. The new annual rate of $0.912 yields 0.9%.

CPKC is a buy. Recommended in The Successful Investor and Canadian Wealth Advisor.

CANADIAN NATIONAL RAILWAY CO. $133 (Toronto symbol CNR; Manufacturing & Industry sector; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 30,250-kilometre network stretches across the country and through the U.S. Midwest to the Gulf of Mexico.

In response to the tariff uncertainty, CN will cut its planned capital spending for 2025 by $50 million, to $3.4 billion.

The company also expects its full-year earnings per share will rise about 7%, down from its earlier forecast of a 10% to 15% gain. As a result, CN will probably earn $7.60 a share this year, and the stock trades at a reasonable 17.5 times that forecast.

As well, with the March 2025 payment, CN raised your quarterly dividend by 5.0%, to $0.8875 a share from $0.845. The new annual rate of $3.55 yields 2.7%.

CN Rail is a buy. Recommended in The Successful Investor and TSI Dividend Advisor.

WALMART INC. $96 (New York symbol WMT; Consumer sector; Dividend yield: 1.0%; TSI Network Rating: Above Average; www.walmart.com) is the world’s biggest retailer: it has over 10,700 outlets in 19 countries.

The company has increased its annual dividend rate each year since 1974. As well, with the April 2025 payment, the company raised your quarterly dividend by 13.3%. Investors now receive $0.235 a share instead of $0.2075. The new annual rate of $0.94 yields 1.1%.

In August 2024, the company sold its 9.4% stake in Chinese e-commerce retailer JD.com for $3.6 billion. The cash helped fund its $1.9 billion acquisition of Vizio Holding Corp. (New York symbol VZIO). That firm makes TV sets and soundbars.

Walmart is mainly interested in Vizio’s SmartCast Operating System, which streams ad-supported content on its devices to 19 million subscribers.

Studying the viewing and purchasing habits of those users will help Walmart create ads that better appeal to those users and prompt more purchases. Improving the effectiveness of these ads will also help draw more advertisers to this system.

Walmart is a buy. Recommended in Wall Street Stock Forecaster and TSI Dividend Advisor.

You may find that exchange-traded funds (ETFs) have a place in your portfolio. Unlike many other financial innovations, they don’t load you up with heavy management fees or tie you down with high redemption charges if you decide to withdraw. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds.

They have another advantage. Since shares are only added or removed when the underlying index changes, there’s a low turnover. That means you aren’t faced with the capital gains bills generated by the yearly distributions most mutual funds pay out to their unitholders.

They also give you a convenient way to tap into Canada’s leading dividend stocks. For those who would like to buy dividend stocks by means of an ETF, we rate these two funds as buys.

ISHARES S&P/TSX 60 INDEX FUND (Toronto symbol XIU; ca.ishares.com) is a good, low- fee way to buy the top stocks on the TSX. The units are made up of stocks that represent the S&P/TSX 60 Index, which consists of the 60 largest, most heavily traded stocks on the exchange. Expenses are just 0.18% of assets.

Most of the stocks in the index are high-quality companies. However, as it must ensure that all sectors are represented, the fund holds a few we wouldn’t include.

ISHARIES DOW JONES CANADA SELECT DIVIDEND INDEX FUND (Toronto symbol XDV; ca.ishares.com) holds 30 of the highest-yielding Canadian stocks. Its selections are based on dividend growth, yield and payout ratio. The weight of any one stock is limited to 10% of its assets. The fund’s MER is 0.55%. It yields 3.95%.

Both of these ETFs are recommended in Canadian Wealth Advisor.

Blue chip stocks are, by definition, the strongest and most secure stocks in the market. They offer investors a two-fold benefit.

They give you the greatest likelihood to profit when markets are up, and the best chance to resist market downturns or changing industry conditions, thus bringing an additional measure of safety to your investment portfolio.

Most blue chip stocks pay dividends, which means you can look forward to steady returns in both income and capital gains over the long term. Blue chip stocks have strong positions in healthy industries and experienced management that will make the right moves in a competitive marketplace. In short, they are your best pledge of investment quality.

You will have a strong selection of blue chip stocks in your portfolio when you follow our three-part investing program (described in detail on pages 8-9) which forms the core of all the advice you get in our newsletters and investment services, and on TSI Network.

These three safeguards will tend to limit your losses at the worst of times. But over long periods, they also let you profit nearly automatically.

1. Invest mainly in well-established, mainly dividend-paying companies.
2. Spread your money out across the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities).
3. Avoid or downplay stocks in the broker/media limelight.

These three investing philosophy principles guide us in every portfolio we manage. Using these three value-investing principles will help protect your money during periods of market turbulence, and help you profit when the market rises.