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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Intact Financial is now close to its recent, all-time high—and the shares are up a spectacular 411% 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, $219.30, is a Power Buy. The insurer (Toronto symbol IFC; TSINetwork Rating: Average) (www.intactfc.com; Shares outstanding: 178.3 million; Market cap: $39.1 billion; Dividend yield: 2.2%) is Canada’s largest provider of property and casualty coverage: it insures more than five million individuals and businesses....
Insurers write policies, collect premiums from customers, and then invest those premiums to meet future claims. That need to cover claims means they invest significant amounts of their funds in fixed-income instruments, primarily bonds. That also means high interest rates are a boon to their returns....
Telus and Ovintiv are among the leaders in their respective markets. We still see both stocks as buys.
TELUS, $22.80, is a buy. The stock (Toronto symbol T; Shares outstanding: 1.5 billion; Market cap: $33.8 billion; TSINetwork Rating: Above Average; Dividend yield: 6.6%; www.telus.com) is a Canadian wireless carrier with 13.06 million subscribers....
BANK OF NOVA SCOTIA, $64.99, is a buy. The lender (Toronto symbol BNS; Shares outstanding: 1.2 billion; Market cap: $79.9 billion; TSINetwork Rating: Above Average; Dividend yield: 6.5%; www.scotiabank.com) is Canada’s third-largest bank.
Due to current economic uncertainty as a result of relatively high interest rates and inflation, Bank of Nova Scotia set aside $1.01 billion to cover future loan losses in its fiscal 2024 second quarter, ended April 30, 2024....
Artificial intelligence (AI) is an example of an investment idea that could boost your investment returns—or more likely end up of costing you money. All in all, we think that the biggest, surest gains from AI will come from investing in established businesses that are already profitable and growing, and that can gain all the more by applying AI to their operations.
Here are two companies that are already profitably taking advantage of AI, and they will be among the leaders in the push to extend AI’s use:
TWILIO INC., $61.44, is a buy. The company (Nasdaq symbol TWLO; TSINetwork Rating: Extra Risk) (www.twilio.com; Shares outstanding: 171.2 million; Market cap: $10.5 billion; No dividends paid.) spends a high 30% of sales on R&D—that includes spending to expand its Twilio CustomerAI technology.
The hi-tech offering combines AI with real-time customer data flowing through Twilio’s Customer Engagement Platform....
After CN failed in its attempt to buy U.S....
IBM, $164.43, is still a buy. The company (New York symbol IBM; Shares outstanding: 918.6 million; Market cap: $151.1 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%) has shifted its focus in the past few years to its more-profitable cloud computing, consulting and mainframe businesses.
In the three months ended March 31, 2024, revenue rose 1.5%, to $14.46 billion from $14.25 billion a year earlier.
Earnings excluding one-time items gained 25.2%, to $1.56 billion from $1.25 billion....
LOBLAW COMPANIES, $152.84, is a buy. The retailer (Toronto symbol L; Shares outstanding: 306.7 million; Market cap: $46.9 billion; TSINetwork Rating: Above Average; Dividend yield: 1.2%; www.loblaw.ca) operates 1,104 supermarkets under several banners, including Loblaws, Zehrs, Provigo, Real Canadian Superstore and No Frills....
We’re always wary of big acquisitions like the company’s April 2023 purchase of U.S.-based railway Kansas City Southern for $31 billion U.S. Still, the deal is a rare case: here, the buyer knows nearly as much about the business as the seller....