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

This top pick is just getting started

We named fast-food giant McDonald’s as your top Conservative buy for 2022 and then selected it, again, for 2023. After a slow start, the stock is now up 14% since that 2022 stock of the year recommendation. That’s a lot better than the S&P 500 Index, which is down 1% over that same period.

The company’s long-term outlook remains bright....

5 min read

Pat McKeough

Blue Chip Stocks

Intact profits with smart acquisitions

Intact Financial is now close to its recent all-time high—and the shares are up a spectacular 361% since we first recommended them at $42.95 in our April 2010 issue. We think this Power Buy is poised to keep moving even higher for our subscribers.

INTACT FINANCIAL, $197.87, is a buy. The insurer (Toronto symbol IFC; TSINetwork Rating: Average) (www.intactfc.com; Shares outstanding: 175.3 million; Market cap: $34.6 billion; Dividend yield: 2.2%) is Canada’s largest provider of property and casualty coverage: it insures more than five million individuals and businesses....

2 min read

Pat McKeough

Blue Chip Stocks

Use our updates to enhance your portfolio

TORONTO-DOMINION BANK $78 is a buy. The lender (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $140.4 billion; Price-to-sales ratio: 2.9; Dividend yield: 4.9%; TSINetwork Rating: Above Average; www.td.com) has cancelled its deal to acquire First Horizon Corporation (New York symbol FHN) for $13.4 billion U.S....

2 min read

Pat McKeough

Blue Chip Stocks

CN teams up with U.S. railways

CANADIAN NATIONAL RAILWAY CO. $156 is a buy. The company (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 662.4 million; Market cap: $103.3 billion; Price-to-sales ratio: 5.9; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway....

1 min read

Pat McKeough

Blue Chip Stocks

TD cancels a big deal

TD BANK, $76.84, (Toronto symbol TD; Shares outstanding: 1.8 billion; Market cap: $141.2 billion; TSINetwork Rating: Above Average; Dividend yield: 4.9%; www.td.com) has now cancelled its deal to acquire First Horizon Corporation (New York symbol FHN) for $13.4 billion U.S....

1 min read

Pat McKeough

Blue Chip Stocks

Merck makes a big acquisition

MERCK & CO. INC., $114.76, is a buy. The drugmaker (New York symbol MRK; TSINetwork Rating: Above Average) (www.merck.com; Shares outstanding: 2.5 billion; Market cap: $294.6 billion; Dividend yield: 2.5%) now buying San Diego-based Prometheus Biosciences Inc....

1 min read

Pat McKeough

Blue Chip Stocks

Watch this merger spur more gains

This is the fifth year in a row that we’ve selected CP Rail–now Canadian Pacific Kansas City Ltd.—as your #1 Conservative Buy. In fact, over that time, the stock has gained close to 130% compared to just 28% for the S&P/TSX Composite Index.

CP recently completed its purchase of U.S.-based railway Kansas City Southern....

4 min read

Pat McKeough

Blue Chip Stocks

CPKC set to launch

CANADIAN PACIFIC KANSAS CITY LTD. $107.44 (Toronto symbol CP; shares o/s: 931.1 million; Market cap: $99.1 billion; Rating: Above Average; Dividend yield: 0.7%) took its current form on April 14, 2023, when Canadian Pacific Railway Ltd....

1 min read

Pat McKeough

Blue Chip Stocks

IBM is a safety-conscious tech buy

Unlike many technology companies, IBM is consistently profitable—its high, sustainable dividend also helps support its stock price. Meanwhile, in response to slowing demand for its traditional mainframe computers and consulting services, the company has shifted its focus to the faster-growing field of cloud computing.

IBM, $123.45, is still a buy. The company (New York symbol IBM; Shares outstanding: 908.0 million; Market cap: $113.7 billion; TSINetwork Rating: Above Average; Dividend yield: 5.4%) is one of the world’s largest computer companies, with operations in over 175 countries.

In the past few years, IBM has shifted its focus to its more-profitable cloud computing, consulting and mainframe businesses....

1 min read

Pat McKeough

Blue Chip Stocks

Higher prices both help and hurt these two

These two beverage makers continue to raise their selling prices to offset higher ingredient and other costs. So far, their sales volumes have held up thanks to their strong brands. However, more price hikes could prompt consumers to switch to cheaper products.

PEPSICO INC....

2 min read

Pat McKeough

Testimonials

The cornerstones of Pat’s strategy–value, diversification and timelines–make his newsletter, The Successful Investor, highly profitable while minimizing risk. His advice is no-nonsense, down-to-earth and based on solid research. You’ll know what to invest in and what to avoid.

Chuck Chakrapani, PhD
Investors Association of Canada
The older I get the better dividends look. For retirees and would-be retirees who want to sleep at night, I can’t think of a better source of information on reliable growing dividend income than Pat McKeough’s newsletter, Dividend Advisor.

Jonathan Chevreau
Financial Post Columnist
As a manager of more than $500 million in mutual funds, I have access to the best brokerage research available in this country. But I still take time to read Pat McKeough’s premium newsletters

John Sartz
I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

Chuck J.
Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
Inner Circle Pro subscriber

Browse Premium Topics

Cannabis

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Blue Chip Stocks

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.