My 2 Favourite TSX Blue-Chip Stocks for December 2023

Here are two top TSX blue-chip stocks I find really attractive to buy in December 2023.

| More on:
Technology

Image source: Getty Images

After consistently sliding for three months in a row, the TSX Composite benchmark regained investors’ confidence last month due mainly to hopes that the central banks in the United States and Canada will soon pause interest rate hikes. This is one of the key reasons why the main TSX index rallied by 7.2% in November. However, macroeconomic challenges are still haunting investors as a high interest rate environment and inflationary pressures are likely to continue hurting corporate earnings in the near term.

In such unpredictable economic phases, investors should ideally hold some reliable blue-chip stocks in their portfolios to protect their investments from market volatility. In general, blue-chip stocks are shares in large-cap, well-established companies with a long history of stable financial performance. Investing in them can be less risky, because these companies are usually financially stronger than most growth companies. In this article, I’ll highlight two of my favourite TSX blue-chip stocks you can buy in December 2023.

Canadian Imperial Bank stock

Canadian Imperial Bank of Commerce (TSX:CM) has been among the top-performing, large-cap Canadian bank stocks of late. CM stock has risen 12.1% in the last month to currently trade at $58.25 per share. At the current market price, the stock has a market cap of $53.8 billion and offers an attractive 6.2% annualized dividend yield.

The recent rally in Canadian Imperial’s share prices could be attributed to its better-than-expected latest quarterly earnings. In the fourth quarter of its fiscal year 2023 (ended in October), the Toronto-headquartered lender’s total revenue rose 8.5% YoY (year over year) to $5.84 billion with the help of strong growth in its non-interest income. More importantly, the bank posted about a 13% YoY increase in its adjusted quarterly earnings to $1.57 per share, with strong performance across segments, exceeding analysts’ expectations of $1.53 per share.

As the macroeconomic scenario gradually improves in the next year, Canadian Imperial Bank’s financial growth trends are likely to improve further, which should help this TSX blue-chip stock trade positively.

Bank of Montreal stock

Bank of Montreal (TSX:BMO) could be another top blue-chip stock on the TSX to consider in December 2023. After losing nearly 6.6% of its value in the first three quarters of 2023, its share prices have staged a healthy recovery in the last few weeks. This blue-chip stock has risen around 11% in the last month to currently trade at $119.26 per share and a market cap of $85.9 billion. BMO has a decent 5.1% annualized dividend yield at this market price and distributes its dividend payouts every quarter.

With the help of positive contributions from its recent acquisition of Bank of the West and the strong performance of its Canadian personal and commercial banking segments, the Bank of Montreal registered a 7.2% YoY increase in revenue to $28.4 billion for its fiscal year 2023 (ended in October). However, weakness in its wealth management and corporate services segments due mainly to ongoing macroeconomic challenges drove its adjusted annual earnings downward.

As the U.S. Federal Reserve and Bank of Canada are expected to start easing their monetary stance in the coming quarters, a favourable lending environment could boost the Bank of Montreal’s well-diversified financial services business and drive its stock higher. Considering that, I find this TSX blue-chip stock really attractive to buy in December 2023 and hold for the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Bank Stocks

open vault at bank
Bank Stocks

What to Know About Canadian Bank Stocks for 2025

With interest rates expected to decline further, along with economic uncertainties and U.S.-Canada trade tensions, Canadian bank stocks could see…

Read more »

coins jump into piggy bank
Bank Stocks

Bank of Montreal: Buy, Sell, or Hold in 2025?

Bank of Montreal (TSX:BMO) has a major US presence. Is it a buy?

Read more »

data analyze research
Bank Stocks

Meet the Canadian Stock That Continues to Crush the Market

Here are the top reasons that could support CI Financial stock’s strong upward momentum in the coming years.

Read more »

A worker gives a business presentation.
Bank Stocks

Top Canadian Financial Stocks to Buy Now

Here are two of the best Canadian financial stocks to buy now and hold for the long term.

Read more »

sale discount best price
Bank Stocks

2 Canadian Bank Stocks to Buy at a Discount

Buying these top Canadian bank stocks today could help you lock in attractive dividend yields while building a portfolio geared…

Read more »

ways to boost income
Bank Stocks

Why Smart Investors Own Canadian Financial Stocks

Investing in Canadian financial stocks could not only provide stability during uncertain times but also offer reliable income.

Read more »

a sign flashes global stock data
Bank Stocks

2 Canadian Bank Stocks to Shield Against Market Downturns

These two top Canadian bank stocks could help protect your portfolio from market downturns with their consistent focus on digital…

Read more »

hand stacks coins
Dividend Stocks

2 Dividend Stocks to Double Up on Right Now

If you want returns and income, then consider these top dividend stocks for long-term passive income.

Read more »