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Highlights
- Blue-chip stocks are often considered comparatively safe as these companies are well-established with a proven track record.
- These stocks are known to pay regular dividends.
- Blue-chip stocks are also usually expensive in comparison.
When a major economic turmoil hits, be it the outbreak of a pandemic or political unrest, investors often turn to stocks belonging to large-scale, established corporations that they can rely on.
In such cases, blue-chip stocks can serve the purpose. These are generally well-known, established companies with market capitalizations in billions and a track record of paying regular dividends.
Let’s explore some such blue-chip stocks listed on the TSX.
- Algonquin Power & Utilities Corp (TSX: AQN)
Algonquin, a utility distribution company, is set to pay quarterly dividends of US$ 0.171 apiece on October 15, 2021. Its stock closed at C$ 19.54 on August 18, posting a one-year return of seven per cent.
Algonquin Power recorded a revenue of US$ 527.5 million in the second quarter of fiscal 2021, up by 54 per cent year-over-year (YoY). The adjusted EBITDA was US$ 244.9 million, and its adjusted net earnings were US$ 91.7 million in the same quarter.
The utility company held a price-to-earnings (P/E) ratio of 13.7 and a return on equity (ROE) of 15.11 per cent.
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- Constellation Software Inc (TSX: CSU)
The Canada-based tech company held a market cap of nearly C$ 44 million and outstanding shares of 21.1 million on August 18, as its stock closed at C$ 2,073.5.
Constellation Software pays a quarterly dividend of US$ 1 apiece, set to be paid next on October 8.
The software firm posted a revenue of US$ 1.24 billion in Q2 FY21, up by 35 per cent YoY. Its net income attributable to common shareholders was US$ 88 million in the same quarter.
The valuation metrics highlighted earnings per share of 20.45, a price-to-book (P/B) ratio of nearly 39, and an ROE of 39.6 per cent
Also Read: 25 best blue-chip stocks to buy in 2021
- Manulife Financial Corporation (TSX:MFC)
Manulife Financial, which provides wealth management and life insurance services in Canada and the US, noted a market cap of over C$ 48 billion on August 18. Its stock at C$ 25.02 on August 18.
Manulife’s next quarterly dividend of C$ 0.28 is scheduled to be paid on September 20.
In the second quarter of fiscal 2021, Manulife saw a net income of C$ 2.6 billion, up from C$ 1.9 billion in Q2 FY20. Its core earnings were C$ 1.7 billion in the latest quarter.
The company held a debt-to-equity (D/E) ratio of 0.25, EPS of 3.65, and ROE of 14.82 per cent
- Franco-Nevada Corporation (TSX: FNV)
Metals-focused investment company Franco-Nevada saw its stocks trade at C$ 185.69 on August 18, with a market cap of C$ 35 billion.
It is set to distribute a quarterly dividend of US$ 0.3 on September 30. Its ROE was 11.93 per cent, while its return on assets (ROA) was 11.65 per cent and EPS stood at 4.47.
Franco-Nevada posted revenue of US$ 347.1 million in Q2 FY21, while its net income was US$ 175.3 million in the same quarter.
- Toronto -Dominion Bank (TSX: TD)
The Canadian bank held a market cap of nearly 156 billion and stock price of C$ 85.65 on August 18.
The TD bank, which paid a quarterly dividend of C$ 0.79 on July 31, saw an adjusted net income of C$ 3.77 billion in Q2 FY21.
On the valuation front, its EPS stood at 7.78 and its ROE was 16.18 per cent on August 18.
Also Read: What Are The Top 5 Bluechip Stocks ?
- BCE Inc (TSX: BCE)
The C$ 58-billion market cap telecom giant is known to be one of the country’s major national wireless carriers.
BCE, which held a stock price of C$ 64.6 on August 18, is expected to doll out its next set of quarterly dividends of C$ 0.875 apiece on October 15.
BCE generated an operating revenue of C$ 5.69 billion in Q2 FY21, up from that of C$ 5.35 billion in Q2 FY20.
The company held a P/E ratio of 20.1, an EPS of 3.22, and an ROE of 16.5 per cent.
- Enbridge Inc (TSX: ENB)
This oil and gas company, a major energy distributor in Canada and the US, noted a market cap of nearly C$ 98 billion and a closing share price of C$ 48.3 on August 18.
Enbridge posted GAAP earnings of C$ 1.4 billion in Q2 FY21, while its cash provided by operating activities stood at C$ 2.2 billion.
The oil and gas scrip held an EPS of three, a P/E ratio of 16.4, and an ROE of 10.71 per cent. Its next set of quarterly dividends of C$ 0.835 apiece is set to be paid on September 1.
Also Read: 10 Best Bluechip Stocks To Buy For 2021
- Canadian National Railway Company (TSX: CNR)
Canadian National Railway Company, with a market cap of C$ 95 billion and outstanding shares of 708 million, saw its shares settle at C$ 134.4 on August 18.
The railway enterprise saw a topline of C$ 3.59 billion in Q2 FY21, which was up 12 per cent YoY. Its operating income in the same quarter stood at C$ 1.38 billion.
CNR held an EPS of 5.66, a P/B ratio of 4.6, and a ROA of 9.17 per cent. Its quarterly dividends of C$ 0.615 apiece is scheduled for September 29.
- Royal Bank of Canada (TSX: RY)
Royal Bank of Canada’s market cap settled at C$ 186 billion on August 18, while its stock closed at C$ 130.6.
RBC shareholders are set to be paid quarterly dividends of C$ 1.08 apiece on August 24.
The top bank posted a P/E ratio of 13.3, while its ROE was 18.06 per cent and its D/E ratio was 2.71.
- Bank of Nova Scotia (TSX: BNS)
The C$ 97-billion market cap bank distributed a quarterly dividend of C$ 0.9 apiece on July 28.
Bank of Nova Scotia’s stocks closed at C$ 80.3 on August 18.
It posted an EPS of 6.3, an ROE of 12.17 per cent, and a P/E ratio of 12.8.
Bottomline
Blue-chip stocks have their own set of following, but one of their downsides is that their prices are usually quite high. And while large-cap firms are comparatively more robust that smaller companies, bad times can impact all businesses.
Investors are generally advised to look at the risk-reward ratio and their individual investment objectives before replicating the trading strategies of other traders.
