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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CP will now begin merging the two businesses on April 14, 2023....
A key part of our approach to investing is to look for companies with hidden or overlooked assets that can help unlock long-term value for investors. In Procter & Gamble’s case, its hidden assets are its brand names, many of which have been around for over 100 years.
Those brands are making it easier for Procter to raise selling prices, to offset rising input costs, without losing market share....
Railways are highly cyclical, and the stock has moved mostly sideways since the start of 2022 on concerns rising inflation and interest rates will slow the economy.
However, CN’s long-term outlook remains strong, as its focus on efficiency will keep fuelling its earnings....
Visa’s shares fell below $135 at the onset of the COVID-19 pandemic in March 2020. However, the stock quickly recovered as lockdowns prompted a surge in online shopping and lifted the company’s revenue from processing credit and debit card payments.
We feel the stock will continue to move higher, particularly as global travel volumes return to pre-pandemic levels....
The current uncertainty caused by rising interest rates and still-high inflation has prompted Canada’s big banks to increase their loan-loss provisions. Even so, those provisions remain well below their 2020 pandemic peaks.
ROYAL BANK OF CANADA $140 is a buy. The bank (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $196.0 billion; Price-to-sales ratio: 3.9; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.rbc.com) recently agreed to pay $13.5 billion in cash for the Canadian operations of U.K.-based HSBC Holdings plc (New York symbol HSBC)....
Higher interest rates are generally good news for banks, as those lenders earn higher interest rates on their loans....
BANK OF NOVA SCOTIA, $72.35, is a #1 Buy for 2023. The lender (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $85.8 billion; TSINetwork Rating: Above Average; Dividend yield: 5.7%; www.scotiabank.com) is Canada’s fourth largest bank.
Due to rising interest rates and inflation, in its fiscal 2022 fourth quarter, ended October 31, 2022, Bank of Nova Scotia set aside $529 million to cover future loan losses....