Before we begin, I need to be clear: just because you’re a Canadian doesn’t mean you need to only invest in Canadian companies — far from it, actually. Canadians tend to be heavily invested in Canada, and that can create a massive problem — namely from lack of diversification in several respects.
Today, we’re going to look at three blue-chip stocks that provide you with that diversification. While two are Canadian, one is not and is still a strong long-term option among blue-chip stocks. So, let’s get into them.
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Royal Bank
When it comes to investing in financial institutions, Canadian banks remain at the top of the pile. That’s because they are just massive, even by American standards. And the biggest of the batch is Royal Bank of Canada (TSX: RY).
While bigger isn’t necessarily better, in the case of RBC stock, being big has provided it with strong growth in shares over the last few decades. The company has wealth and commercial management locked up, creating steady revenue streams to fund more growth. What’s more, it holds a diverse set of other investments, including in emerging markets.
In fact, it’s now doing the best of the Canadian banks, seeing shares return to former highs. And that’s likely to continue given the company recently invested in HSBC Canada. This will provide access to high-income newcomers to Canada. So, with more growth ahead and plenty behind, this is a blue-chip stock you can comfortably own for life.
Constellation Software
Another strong blue-chip company that some investors might ignore for its high price is Constellation Software (TSX: CSU). But if you’re looking for diversified exposure to the tech sector, this is, by far, the best option.
CSU stock has proven since the 1990s that its management team knows exactly how to find valuable, essential software for niche industries. And that’s only expanding. In fact, CSU stock has been so successful that it’s spun off to create a European-focused company doing the same thing, namely Topicus.
Again, CSU stock has shown time and again that it can continue growing even in the most dire economic scenarios. So, with shares up 54% in the last year, there is plenty of reason to buy the stock — even decades later.
Coca–Cola
So, we have one Canadian-focused company and one Canadian company that invests on a global scale, so let’s get into an American option. Yet again, this isn’t a company that depends solely on American performance — far from it.
When it comes to companies that just keep on ticking, no matter the market, The Coca-Cola Company (NYSE: KO) is one of the best. Coke is offered literally all around the world, with consumers buying it up, no matter the economic scenario. It’s proven this by continuing to climb steadily and becoming a Dividend King in the process.
So, while offering a 3.21% dividend yield and shares up 15% since the October bottom, it’s an easy buy for every Canadian portfolio seeking long-term growth from blue-chip stocks.
