The Best 10 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 Screeners. 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 around 50 blue chip stocks from the Toronto Stock Exchange.

Get your list of STRONG Dividend Growth Stocks

Top 10 Canadian Blue Chip Stocks

Below is the list of the best ranked blue chip stocks from the Dividend Snapshot Screener. 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.

#1 – Algonquin Power & Utilities Corp

Algonquin Power & Utilities is a diversified utility company in North America with $10 billion in total assets. The company engages in the generation, transmission, and distribution of water, gas, and electricity to communities across the U.S. It also has renewable energy business.

As a growing renewable energy company, Algonquin Power owns a strong portfolio of long term contracted wind, solar and hydroelectric assets with 1.5 GW of total installed capacity.

The company through its subsidiaries owns an equity interest in more than 39 clean energy facilities. Algonquin Power operates through two subsidiaries: Liberty Utilities (64% of 2018 earnings) and Liberty Power (36%).

The company has more than 50 power generation facilities and 20 utilities across North America. Algonquin’s utility business serves nearly 770,000 customers in twelve states across the U.S., through 1,200 miles of electrical transmission lines and 100 miles of natural gas transmission pipelines.

Key Investment Data

 

#2 – 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
 

#3 – Telus

TELUS Corporation is the second-largest telecom company in Canada, providing a wide range of communications products and services such as data, IP, voice, television, entertainment, and video. 

The company has ~16 million customer connections, including 10.6 million wireless subscribers, 2.2 million Internet subscribers, 1.2 million residential network access lines, and 1.2 million TELUS TV customers. It is also Canada’s largest digital healthcare provider and has been a major telehealth player for over a decade. 

The telecom has a strong presence in the wireless segment which accounts for 55% of total revenue while the wireline segment constitutes the remaining 45%. Nearly 70% of the total earnings is derived from the wireless segment. The wireline segment comprises data, voice, and other services and equipment. 

TELUS’s new operating segments are TELUS Technology Solutions (TTech) and Digitally-Led Customer Experiences – TELUS International (DLCX).

Key Investment Data

 

#4 – Enbridge

ENB - Enbridge Enbridge Inc. is the largest energy infrastructure company in North America. It is Canada’s largest natural gas distributor engaging in the collection, transportation, processing and storage of oil and gas. Enbridge caters to 3.7 million customers in Ontario, Quebec, New Brunswick, and New York.

It owns an extensive network of about 192,000 miles of natural gas and NGL pipelines across North America and the Gulf of Mexico.

Its crude oil and liquids transportation systems are huge comprising of more than 17,000 miles of active pipelines.

The company is known for its high quality liquids and natural gas infrastructure assets. In addition, Enbridge has 3.1 Bcf/d of processing capacity and 438 Bcf of net natural gas storage capacity. It also owns interests in nearly 3,000 MW of renewable generation capacity.

Enbridge operates through five reporting segments - Liquids Pipelines (52% of 2018 earnings), Gas transmission and midstream (22%), Gas Distribution (17%), Green Power and Transmission (4%), and Energy Services (5%).

Key Investment Data

 

#5 – Metro

Metro Metro is a leading food and pharmaceutical company having operations in Quebec and Ontario. The company is one of the largest food retailers in Canada.

The company operates through more than 600 food stores operating under the banners Metro, Metro Plus, Super C, Food Basics and Adonis. Its drug business is conducted through 650 drugstores and pharmacies operating under the banners Jean Coutu, Brunet, Metro Pharmacy and Drug Basics.

Its two business segments, food operations and pharmaceutical operations are combined into one reportable operating segment.

Metro has developed a successful market segmentation strategy with its different grocery banners catering to three different market segments. For example, Metro, Super C and Adonis all target unique markets and customers. Metro and Metro Plus are leading supermarket chains in Quebec and Ontario.

Metro’s largest acquisition of Jean Coutu group that has resulted in the creation of a $16-billion retail leader.

Key Investment Data

 

#6 – Brookfield Infrastructure

BAM - Brookefield Asset Management Brookfield Infrastructure Partners is one of the largest owners and operators of infrastructure networks globally. The firm acquires good quality businesses, restructures its operations and subsequently sells them.

Brookfield’s business units include real estate, infrastructure, renewable power, and private equity. Brookfield Infrastructure’s key segments are utilities (39% of total FFO), transport (39%), energy (31%), data infrastructure (8%), and corporate (-17%).

The firm has a diversified portfolio of high quality and long life assets spread geographically across North and South America, Asia Pacific and Europe. The firm is highly diversified by sectors and geographies which reduces volatility and safeguards against any market fluctuation.

Brookfield Infrastructure focuses on the ownership of stable cash flow generating assets operating under regulated frameworks. The firm is in a good position to benefit from strong infrastructural development across the world. The firm’s objective is to generate an equity return of 12%-15% in the long term and grow its annual distribution by 5%-9%.

Investment Data
 

#7 – Restaurant Brands International Inc.

QSR Restaurant Brands International Small Restaurant Brands International is a leading quick-service restaurant company in the world. Burger King, Tim Hortons, and Popeyes are its largest and most popular brands globally.

Restaurant Brands operates over 27,000 restaurants, including more than 17,800 Burger King restaurants, 4,800 Tim Hortons restaurants, and 3,100 Popeyes restaurants worldwide. In all, the company has more than 2500 franchises in over 100 countries. It has high market penetration in North America and Europe. The company focuses on localized menus and quality food ingredients in order to attract consumers.

It operates through three reportable segments: Tim Hortons (TH), Burger King (BK), and Popeyes Louisiana Kitchen (PLK). Popeyes is Restaurant Brands' fastest-growing chain, both in terms of revenue and restaurant count while Tim Hortons is one of the most loved restaurant brands in Canada.

Key Investment Data

 

#8 – Intact Financial

IFC - Intact Financial Intact Financial Corporation is the largest provider of property and casualty insurance in Canada and a leading provider of specialty insurance in North America.

The company’s popularity can be gauged from the fact that about one in every five Canadians is a customer of Intact Financial products and services.

The company enjoys a 17% share in the P&C insurance market in Canada. In terms of business segments, personal and auto accounts for nearly 40% of DPW (direct premium written), followed by personal property (20%), commercial lines Canada (25%) and commercial lines USA (15%).

About 85% of the company’s revenue is derived from Canada and the remaining 15% is from the U.S. The company operates through Intact insurance, BrokerLink, OneBeacon and Belairdirect banners.

Its large coast-to-coast presence and cross-border services help serve customers better. Intact Financial offers a comprehensive range of insurance products and caters to the financial needs of a wide range of clients ranging from personal, business, public sector to institutional clients.

Key Investment Data

 

#9 – Canadian National Railway

Canadian 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.

Key Investment Data

 

#10 – Canadian Natural Resources

Canadian Natural Resources is a diversified and independent energy producer in the world. It is the largest independent natural gas and heavy crude oil producer in Canada. 

It operates a balanced mix of natural gas, light crude oil, heavy crude oil, and oil sands. The company holds some of the best oil sand assets in North America, particularly thermal in situ properties, having tremendous growth potential.

The company’s business can be broadly classified into Exploration and Production (North America, North Sea, offshore Africa), Oil Sands Mining and Upgrading, and Midstream and Refining segments. The Exploration and Production segment is Canadian Natural’s core business, while the other two businesses provide a nice diversification.

Canadian Natural has a balanced mix of natural gas, light crude oil, heavy crude oil, bitumen, and SCO. The company also owns midstream assets consisting of two crude oil pipeline systems and cogeneration plants, which enables the transportation of heavy crude oil in international markets.

Candian Natural derives nearly 89% of its total revenue from the sale of crude oil and NGLs and the remaining 11% from natural gas.

Key Investment Data

 

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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.