The Toronto Stock Exchange (TSX) has seen its share of ups and downs, with many stocks trading below their 52-week highs. However, this doesn’t mean that every stock is overvalued or on the brink of a market crash. In this article, we will delve into two blue-chip stocks that are still on sale, offering investors an opportunity to buy now and potentially reap the benefits of long-term growth.
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Finding blue-chip stocks
Before we dive into the specific stocks, let’s discuss the importance of identifying blue-chip companies that are trading at attractive valuations. Blue-chip companies are established, financially stable, and often leaders in their respective industries. They are known for their reliability and strong track records, making them ideal candidates for long-term investments.
One of the key characteristics of blue-chip stocks is their ability to weather economic storms and deliver consistent returns to shareholders. Now, let’s explore two such stocks.
A Canadian telecom giant
TELUS (TSX: T) is a prominent name in the Canadian telecommunications sector that exemplifies the characteristics of a blue-chip stock. With a rich history dating back to 1990, Telus has established itself as a leader in providing mobile, internet, and television services to millions of Canadians.
Over the past five years, Telus has consistently demonstrated its value to investors. One standout metric is its impressive 6.11% dividend yield. This makes it an attractive option for income-focused investors. Beyond dividends, Telus has reported robust earnings, showcasing its financial strength and growth potential.
Notable highlights from Telus’s recent performance include:
- Total customer growth of 293,000, up 46,000 over the previous year, driven by strong demand for its services.
- Impressive results in the Mobility segment, with mobile phone net additions of 110,000, the best second quarter performance since 2010.
- Record-setting fixed customer net additions of 59,000, including 35,000 new internet customers, fueled by customer loyalty and Telus’ PureFibre network.
- Resilient financial results, including a 13% increase in consolidated operating revenue and a 5% rise in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
- A substantial quarterly dividend increase of 7.4%, yielding over 6% per share.
These accomplishments, along with Telus’ commitment to continued growth, as evidenced by its 2023 growth targets, make it an appealing choice for investors seeking stability and income.
Banking on stability
Scotiabank, or the Bank of Nova Scotia (TSX: BNS), is a pillar of the Canadian banking industry and another excellent example of a blue-chip stock. With a history dating back to 1832, Scotiabank has consistently delivered value to its shareholders and maintained its status as a reliable financial institution.
In the past five years, Scotiabank has not only maintained its reputation but also offered investors an attractive 6.56% dividend yield. This impressive yield, combined with its solid financial performance, makes Scotiabank stock a top pick for income investors.
Here are some key earnings highlights from Scotiabank’s recent financial reports:
- Adjusted net income for the third quarter reached $2.3 billion, with earnings per share at $1.73.
- Canadian Banking reported strong adjusted earnings of $1.1 billion, driven by robust net interest income.
- International Banking generated adjusted earnings of $654 million, despite increased provision for credit losses.
- Global Wealth Management achieved adjusted earnings of $375 million, with strong international growth offsetting challenges in the Canadian market.
- Global Banking and Markets reported earnings of $434 million, a 15% year-over-year increase.
Furthermore, Scotiabank stock has demonstrated strong capital and liquidity positions, with a Common Equity Tier 1 (CET1) capital ratio of 12.7%. This financial stability positions Scotiabank as a solid choice for investors looking for a safe haven during market uncertainty.
Bottom Line
In a market filled with volatility and uncertainty, it’s crucial to identify strong investment opportunities that offer stability and growth potential. TELUS and Scotiabank stocks are two prime examples of blue-chip stocks that are currently on sale.
Telus stock’s robust performance in the telecommunications sector, coupled with its impressive dividend yield, makes it an appealing option for income-focused investors. Meanwhile, Scotiabank stock’s resilience in the banking industry, combined with its attractive dividend yield, positions it as a solid choice for those seeking stability.
Investors who choose to buy these stocks may now find themselves well-rewarded as both companies continue on their paths of value creation and growth.
