As another year of stock market investing began, I decided to do a bit of repositioning in my stock market investing portfolio. I decided it is as good a time as any to shore up my long-term investment goals and add more blue-chip stocks trading at attractive levels. While these three are already stocks I have positions in, I decided to grow my positions in them due to the opportunity these TSX stocks represent.
I will discuss all three to paint a clear picture of what makes these well-established giants more attractive today.
BCE (TSX:BCE) is a $49.70 billion market capitalization giant in the Canadian telco space. The publicly traded company has long stood as a major telecom provider and operates various mass media assets under its umbrella, providing essential services to its customers throughout Canada. As of this writing, BCE stock trades for slightly more than $54 per share, down by 17.02% from its 52-week high.
At current levels, it pays its investors their shareholder dividends at an inflated 7.10% dividend yield. The stock saw its share prices slide due to the series of aggressive rate hikes by the Bank of Canada. Since the telco uses debt to partially fund its capital programs, higher interest rates drove up borrowing costs.
The central bank is expected to cut interest rates sometime this year. If that happens, its share prices can soar. It might be a good time to add it to your self-directed portfolio to lock in high-yielding dividends.
Bank of Nova Scotia (TSX:BNS) is a $76.98 billion market capitalization Canadian multinational financial services and banking company. Headquartered in Toronto, it is one of Canada’s Big Six banks by market cap and deposits. As of this writing, it trades for $63.41 per share, down by 14.78% from its 52-week high. At current levels, it pays its shareholders their dividends at a 6.69% dividend yield.
While lower key interest rates should technically be a negative factor for its interest income, the financial institution has several other factors working in its favour. The bank is going through a strategic overhaul that will see it expand its investments in the Canadian, U.S., and Mexican markets.
It also has operations in the Latin American countries of Chile, Columbia, and Peru, which it might sell off if the markets do not perform well. While short-term volatility might persist, it will likely be a long-term winner for Canadian investors.
Suncor Energy (TSX:SU) is a $58.62 billion market capitalization integrated energy company headquartered in Calgary. Suncor stock is more of a contrarian pick than the other two. The company specializes in producing synthetic crude from oil sands.
It also has offshore oil and gas, petroleum refining, and retail and wholesale distribution networks. As of this writing, it trades for $45.16 per share, down by almost 35% from its 2008 all-time high.
Trading at a 6.42% discount from its 52-week high, it is not as oversold as the other two. However, the recent appointment of a new chief executive officer and subsequent changes to cut costs and exiting non-core businesses to prioritize its core production, refining, and retail operations have made improvements in its financial performance.
The company’s fourth-quarter earnings report showed its oil output being at its second-highest level ever. At current levels, Suncor Energy stock pays its shareholders at a 4.83% dividend yield.
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I bought all three because I have a strong feeling the underlying companies will continue protecting my self-directed portfolio in the long run. While Suncor Energy stock represents a slightly greater degree of short-term risk, the new chief executive officer’s approach to making improvements makes it a reasonable investment for me.
If you are starting to invest in Canada, prioritizing blue-chip stocks is an excellent way to build solid foundations for your self-directed portfolio. To this end, all three can be staple holdings to have in your portfolio for decades to come.