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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CANADIAN PACIFIC RAILWAY LTD. $388 remains your #1 Conservative stock for 2020. The company (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 135.6 million; Market cap: $52.6 billion; Price-to-sales ratio: 6.7; Dividend yield: 1.0%; TSINetwork Rating: Above Average; www.cpr.ca) has gained roughly 16% since the start of 2020 despite the COVID-19 shutdowns....
CN’s shares are up over 40% since March despite COVID-19 disruptions. That’s because the pandemic continues to highlight the huge importance of railways to Canada’s economic health.
As well, the company benefits from being the only major North American railway to serve three coasts....
CANADIAN PACIFIC RAILWAY $363.51, is a buy. The company (Toronto symbol CP; shares outstanding: 135.6 million; Market cap: $49.3 billion; Rating: Above Average; Dividend yield: 1.0%) operates a 22,000-kilometre rail network between Montreal and Vancouver.
CP shipped a record 8.41 million tonnes of Canadian grain in the quarter ended June 30, 2020....
BCE INC. $56 is a buy. The company (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 903.9 million; Market cap: $50.6 billion; Price-to-sales ratio: 2.1; Dividend yield: 5.9%; TSINetwork Rating: Above Average; www.bce.ca) has now launched 5G wireless service in Toronto, Montreal, Calgary, Edmonton and Vancouver.
5G (fifth generation) wireless technology is up to 100 faster than the current 4G LTE networks....
CANADIAN PACIFIC RAILWAY $345.32, is a buy. The company (Toronto symbol CP; shares outstanding: 135.6 million; Market cap: $46.8 billion; Rating: Above Average; Dividend yield: 1.0%) operates a 22,000-kilometre rail network between Montreal and Vancouver....
The company is expanding its partnership with the makers of the Flashfood mobile app....
While COVID-19 forced McDonald’s to close most of its outlets to dine-in customers, about 95% of its stores continue to operate by offering drive-thru and home delivery service....