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.
[text_ad]
CANADIAN NATIONAL RAILWAY CO. $172 (www.cn.ca) remains a buy. Canada’s largest railway has reached a new three-year contract agreement with the union representing 2,500 of its track and bridge employees....
TORONTO-DOMINION BANK $80 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $144.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.td.com) cancelled its deal to acquire First Horizon Corporation (New York symbol FHN) for $13.4 billion U.S....
BANK OF MONTREAL $124 is a buy. The bank (Toronto symbol BMO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 713.0 million; Market cap: $88.4 billion; Price-to-sales ratio: 2.7; Dividend yield: 4.9%; TSINetwork Rating: Above Average; www.bmo.com) completed its $13.8 billion U.S....
Banking regulators have toughened lending standards and mortgage stress-test levels in the past few years, and that has helped keep Royal’s loan writeoffs low....
In the past few years, IBM has shifted its focus to its more-profitable cloud computing, consulting and mainframe businesses....
All three are in a strong position to fuel your returns, not only in 2024 but–more importantly–for many years to come. Moreover, their position as market leaders will help limit any losses if the economy slows.
MCDONALD’S CORP....