Top Canadian Blue Chip Stocks

Can blue chip stocks be part of your winning investment strategy? A successful long-term approach to investing is to pick winning dividend stocks to hold forever and as you probably know, it’s a lot harder to do for a consistent period of time than you can imagine.

Many investors and stock analysts will share their opinion on many different stocks but the reality is that there are proven businesses with a long history of growth and success through good and bad times. Those blue chip companies often have a leg up on the competition and lead the way with consumers for recognition.

Here is what you will learn:

  • What a blue chip stock is
  • The complete list of blue chip stocks on the Toronto Stock Exchange
  • The top 10 blue chip stocks

What Are Blue Chip Stocks?

A blue chip stock has the following characteristics:

  • The company is a leader in both market capitalization within its sector, its country and in its business segment.
  • The company will often have products that are well-known to everyone and established within the household.
  • The company will often pay a dividend and have paid a dividend consistently for many years. While it’s not required to pay a dividend, or have increased the dividend, they usually have established the pattern.

Blue chip stocks are considered to be more defensive with the ability to weather stock market storms. It doesn’t mean the stock price will not go down, it means they are expected to recover due to their established business and strong foothold.

The blue chip reference comes from understanding that a blue chip is the most valuable poker chip if you are curious about the reference. Watch this video for a great explanation.

Stay on top of your next investment decision with the Dividend Snapshot Canadian Dividend Performance List. Review the Chowder Rule along with the 3, 5, and 10 year ratios for dividend growth, EPS growth and the payout ratio to pick a solid investment for your portfolio.

Canadian Blue Chip Stocks

Here is what I consider to be the complete list of blue chip stocks on the Toronto Stock Exchange. I identified a total of 47 blue chip stocks from the Toronto Stock Exchange. The top two rows below can be considered blue chip stocks for beginners and are easily the best blue chip stocks examples for Canadians.

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Top 10 Canadian Blue Chip Stocks

Below is my list of best no-brainer blue chip stocks picks. The list outlined below is sorted by market capitalization and could be considered blue chip stocks for beginners. I own a number of the stocks listed, see my stock holdings for more details. All data points are accurate as of the time of writing.

What you may find interesting is that many of the Canadian Dividend Blue Chip Stocks also trade on the NYSE as cross-listed stocks. Please note that from a market capitalization perspective, none of the Canadian REITs have made it on the list below. The following list represents Canadian dividend stocks to hold forever – if you were to evaluate the holdings of many ETFs or mutual funds, you would find those companies.

You will notice that the top 10 Canadian dividend growth stocks have no energy or basic materials. Both sectors have too much risk from an environmental perspective to provide the consistent returns investors need. 

#1 – Royal Bank

RY - Royal BankRoyal Bank is a diversified financial services company offering personal and commercial banking, wealth management, insurance, investor services, and capital markets products and services. It is one of Canada's largest banks. Royal Bank also ranks amongst the largest banks in the world based on market capitalization. It serves 16 million clients in Canada, the U.S., and 34 other countries. By geography, Canada is its largest market accounting for 61% of revenues, followed by the US (23%) and other countries (16%). Royal Bank has a large set of diversified customers ranging from corporate and institutional to high net worth clients. The bank has five business segments - personal & commercial banking (49% of earnings), capital markets (21%), wealth management (18%), insurance (7%) and investor & treasury services (5%). It maintains a good balance of assets having nearly 50% retail and 50% institutional assets. Royal Bank operates through the largest financial distribution and branch network in Canada along with leading client franchises.
Investment Data

#2 – TD Bank

TD - SmallToronto Dominion Bank is a leading Canadian bank providing banking products and services in Canada and the US. It is the fifth largest bank in North America by total assets. The bank was formed as a result of amalgamation of The Bank of Toronto and The Dominion Bank in 1955. Retail earnings accounts for more than 90% of TD Bank’s total earnings. The bank operates through three business segments: Canadian retail banking (53% of latest income), U.S. retail banking (47%) and wholesale banking. TD Bank offers a wide range of retail, small business and commercial banking products and services to more than 25 million customers worldwide and almost 13 million digital customers. Toronto Dominion bank operates through more than 1,250 locations along the Northeast, Mid-Atlantic, Metro DC, the Carolinas and Florida. It enjoys #1 or #2 market share positions for most of its retail products in Canada. The bank operates in four of the top ten metropolitan areas and seven of the ten wealthiest states in the U.S.

Investment Data

#3 – Canadian National Railway

CNR - Canadian National RailwayCanadian National Railway is a leading transportation and logistics company in North America. The company owns the only transcontinental railway line in North America and provides intermodal, trucking, freight forwarding, warehousing and distribution services. As North America’s leading supply chain player, Canadian National Railway carries more than 300 million tons of cargo annually. It is a fully integrated rail and transportation services company and is the top mover of aluminum, iron ore and base metal ore in North America. Canadian National handles over 50% of all Canadian chemicals production and services the three major petrochemical centers in North America. Its product portfolio is well diversified with intermodal accounting for 25% of revenues, followed by petroleum & chemicals, and grains & fertilizers each at 17%. Forest products, metal, minerals, automotives, etc. constitute the remainder. The company transports goods worth more than $250 billion annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods.

Investment Data

#4 – BCE

TSE:BCEBell Canada Enterprises is Canada’s largest telecommunications company. It provides an extensive range of products and solutions for its customers’ communication needs. The company owns Canada’s largest network of data centers, retail outlets, as well as Bell LTE, Canada’s national network. BCE is a leading residential communications provider offering fiber-based Fibe TV and Fibe Internet, Connected Home services and home phones in seven provinces. It also provides national wireless services, and a wide range of business communications services including data hosting and cloud computing across the country. Bell Canada caters to a diversified customer base which includes retail consumers, businesses and government customers. Moreover, its multimedia company, Bell Media is Canada's premier media company hosting the No.1 sports channel TSN. The company operates through Bell Wireline (52% of Q4’18 revenues), Bell Wireless (35%) and Bell Media (13%) segments. By revenues, wireline is its largest segment, with revenues comprising of data, voice and other services (90% of wireline revenues) and products (10%).

Investment Data

#5 – Brookfield Asset Management

BAM - Brookefield Asset ManagementBrookfield Asset Management is a leading global alternative asset management company focusing on real estate, infrastructure, renewable energy as well as private equity. The firm serves institutional and retail clients through its four partnerships. It operates through Brookfield Property Partners, Brookfield Infrastructure Partners, Brookfield Renewable Partners, and Brookfield Business Partners. Infrastructure investments account for the largest portion of investments at 45%, followed by real estate (20%), private equity (20%) and renewable power (~15%). Over 85% of its revenues are long term. Brookfield Asset Management has a large global presence in over 30 countries which grants it a competitive edge for proprietary deal flow. Brookfield Asset Management invests in North America (86% of funds deployed), Europe (8%), South America (5%) and Asia (1%). The number of average client commitments and their size have both increased over the last few years.

Investment Data

#6 – Fortis

FTS - FortisFortis is a leading utility company engaging in regulated power generation, electric transmission, and energy distribution across North America. The US accounts for about 60% of Fortis’ business while Canada constitutes the remaining 40%. About 99% of the company’s utility assets are regulated and it operates through regulated independent electric transmission (32% of 2018 earnings), regulated US electric & gas (33%), regulated Canadian & Caribbean electric & gas (40%), and non-regulated energy infrastructure (-5%) business segments. Fortis’ assets can be divided into electric (~80% of asset mix), gas, and non-regulated energy infrastructure. It operates through 10 utility companies such as ITC, UNS Energy, Fortis Alberta, Fortis BC, etc. and serves utility customers in five Canadian provinces, nine U.S. states and three Caribbean countries. ITC Holdings is the largest independent electricity transmission company in the U.S. Fortis caters to 3.3 million utility (2 million electric utility customers and 1.3 million gas utility customers) across North America. The company is known for its highly regulated, low risk and diversified utility businesses.

Investment Data

#7 – Alimentation Couche-Tard Inc.

Alimentation Couche-Tard is one of the largest Canadian companies and the owner of several Canadian convenience stores. The company also supplies road transportation fuel to approximately 1,300 locations in the U.S. and offers stationary energy and aviation fuel. Couche-Tard caters to more than 9 million global customers daily, offering them merchandise and services (55% of 2018 revenues), motor fuel (43%) and other (2%). As a leading independent convenience store operator, Couche-Tard owns a network of nearly 10,000 convenience stores in 48 states in the U.S., ten provinces in Canada, as well as other countries. It operates more than 16,000 stores worldwide. By geography, the US is its largest market accounting for 67% of 2018 revenues, followed by Europe (20%) and Canada (13%). The company operates through Couche-Tard and Mac’s brands in Canada and Circle K globally. With nearly four decades of experience, Couche-Tard has adapted to the changing customer habits and preferences and has a sound track record of successful acquisitions over the last decade.

Investment Data

#8 – Canadian Pacific

CP - Canadian PacaficCanadian Pacific Railway is a leading Canadian transportation company that moves goods and commodities from Montreal to Vancouver in Canada and in the U.S. Midwest and northeast regions. The company also has easy access to international markets, given its large network of 12,500 miles railways, more than 100 transload facilities across Canada and the U.S. and linkages to key ports in the east and west coast. Canadian Pacific is known for its reliable and efficient movement and delivery of critical goods to a diversified group of customers in the automotive, food products, energy, industrial and other key markets. It is the only Class 1 railway with significant grain franchises in both Canada and the US. Bulk goods comprised 41% of Canadian Pacific’s 2018 freight revenue followed by Merchandise Goods (37%) and Intermodal (22%). With decades of experience, Canadian Pacific has established long-standing relations with Class 1 and short-line railroads.

Investment Data

#9 – Thompson Reuters

TRI - Thomson ReutersThomson Reuters is a leading global source of data and information for professional markets. It was formed as a result of a merger between Thomson Corporation and Reuters in 2008. Thomson Reuters caters to the needs of its clients operating in law, tax, compliance, government, and media industries. The company is trusted by its clients for integrity and accuracy of the information, given its century’s old experience. Americas is Thomson Reuters’ major operating area with more than 60% of its revenues generated here, followed by 27% from EMEA, and 11% from APAC regions. The company has operations in more than 100 countries and enjoys #1 or #2 market share positions in most of the segments that it serves. Thomson Reuters recently reorganized into a new organizational structure. The company now reports its Legal and Tax & Accounting business units under three customer segments: Legal Professionals (43% of latest revenues), Tax Professionals (15%) and Corporates (22%). Global print (15%) and Reuters News (5%) will be reported as separate segments.

Investment Data

#10 – Loblaw

L - LoblawLoblaw Companies is a leading food and pharmacy company in Canada. It ranks amongst Canada’s largest retail companies. Its brands such as President's Choice, Life Brand, and No Name are three of Canada’s top 10 consumer brands. The company operates through a network of corporate and independent stores across the country and 90% of Canadians live within 10 kilometres of these locations. It also runs pharmacies in more than 1,300 Shoppers Drug Mart stores. The company has become a popular household name in Canada, given the fact that there are one billion visits each year to Loblaw stores. Loblaw operates through two operating segments namely Retail accounting for 98% of revenues, (consisting of retail food and drug stores, in-store pharmacies and apparel and general merchandise) and Financial services (credit card services, insurance brokerage services, deposit taking services etc). Food retail is the larger business accounting for over 70% of total retail revenues while drug retail constitutes the remaining.

Investment Data

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My portfolio is generating over 12% annual returns since 2009. It's not from the beginning of the year or from 2019, it's from 2009 !!! That's a consistent return which means using the rule of 72, I double my portfolio every 6 years. My approach is simple but you need key data that I have cultivated with the Dividend Snapshot Screeners. No other investment services provide you with easy to understand data but also actionable data. No hidden magic. In fact, I have tried all of the investment services for dividend investors like a crash test dummy of investment services. Just ask me, and you'll learn why there was nothing I could use out there and build the Dividend Snapshot Screeners.

DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.

DISCLAIMER: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your investment decisions at your own risk – see my full disclaimer for more details.
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