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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WALMART INC. $117 is your #1 Conservative Buy for 2026. The company (Nasdaq symbol WMT; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 8.0 billion; Market cap: $936.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 0.8%; TSINetwork Rating: Above Average; www.walmart.com) is the world’s largest retailer with 10,822 outlets in 19 countries. Those stores serve a total of 270 million customers each week.
Despite U.S.-imposed, sector-specific tariffs, loan losses remain low, while new technologies such as artificial intelligence (AI) will help the banks cut administrative costs. Better profitability will also give these banks more room to keep raising their dividends.
All three companies are in a strong position to keep expanding their earnings and market share this year. That should drive their stock prices higher, not only for 2026 but for many years to come.
Procter is now cutting 6% of its workforce as part of a new plan to streamline its operations and minimize the impact of tariffs. Excluding one-time items, it earned $1.99 a share (or a total of $4.85 billion). That’s up 3.1% from $1.93 a share (or $4.76 billion).