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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CPKC and Metro are leading competitors in their respective markets. You can expect that to lower your risk if the economy should weaken. We see both stocks as buys.
CANADIAN PACIFIC KANSAS CITY, $111.87, is a buy. The company (Toronto symbol CP; shares o/s: 933.3 million; Market cap: $102.9 billion; Rating: Above Average; Dividend yield: 0.7%) took its current form in April 2023 when it acquired U.S.-based railway Kansas City Southern (KCS) for $31 billion U.S.
The new CPKC ships freight over a 32,190-kilometre rail network....
IBM, $263.30, is a #1 Buy for 2025. The company (New York symbol IBM; Shares outstanding: 924.6 million; Market cap: $244.5 billion; TSINetwork Rating: Above Average; Dividend yield: 2.5%; www.ibm.com) is one of the world’s largest computer firms, with operations in over 175 countries.
IBM has four main divisions: Software (44% of revenue in the latest quarter) provides a variety of software programs that help businesses operate their cloud computing and AI applications; Consulting (35%), through over 16,000 consultants, helps businesses design, install and run their computer systems; Infrastructure (20%) makes and installs mainframe computers for large organizations that process huge volumes of transactions; and Financing (1%) provides loans to businesses that purchase IBM’s mainframes and services.
IBM often buys other companies to enhance its expertise....
These three companies are leaders in their individual markets. That puts them in a strong position to profit from secular trends such as the ongoing shift to electronic payment systems, the rapid spread of new artificial intelligence programs, and the rising need for faster communication networks....
MERCK & CO., $95.68, is a buy. The drugmaker (New York symbol MRK; TSINetwork Rating: Above Average) (www.merck.com; Shares o/s: 2.5 billion; Market cap: $243.5 billion; Yield: 3.4%) is now making a foray into the lucrative obesity market....
Intact Financial hit an all-time high in December 2024—and while the shares have dropped a bit lately, they’re still up a spectacular 501% 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 you, our subscribers.
INTACT FINANCIAL, $258.07, is a Power Buy. The insurer (Toronto symbol IFC; TSINetwork Rating: Average) (www.intactfc.com; Shares outstanding: 178.4 million; Market cap: $45.7 billion; Dividend yield: 1.9%) is Canada’s largest provider of property and casualty coverage: it insures more than five million individuals and businesses....
You Can See Our WSSF Conservative Growth Portfolio For January 2025 Here.
We designed our TSINetwork Ratings to give you an idea of the investment quality and risk in stocks we recomm...
You Can See Our Conservative Growth Portfolio For January 2025 Here.
We designed our Portfolios to help you build the kind of portfolio we advocate....