Canadian blue-chip stocks present an attractive option for investors aiming for consistent long-term returns. These stocks belong to companies with solid fundamentals and well-established businesses that allow them to generate durable revenue and earnings growth in all market conditions, and consequently deliver steady and enhanced shareholders’ returns through dividend payments and share buybacks.
Considering this background, let’s focus on the three best Canadian blue-chip stocks for April 2024.
Alimentation Couche-Tard
Offering an appealing combination of stability, high growth, and income, Alimentation Couche-Tard (TSX:ATD) is undoubtedly one of the best blue-chip stocks in Canada. ATD is a leading convenience store operator sporting a market cap of about $73 billion. It also retails fuel and offers electric vehicle charging.
Alimentation Couche-Tard stock has grown at a compound annual growth rate (CAGR) of about 18%, delivering a total gain of over 416% in the past decade. Its ability to generate robust revenue and earnings supported this uptrend in ATD stock. For instance, the convenience store operator’s revenue grew at a CAGR (compound annual growth rate) of 7.3% in the past decade. At the same time, its net earnings grew at a CAGR of 18.8%. Moreover, it increased its dividend by an impressive CAGR of 26.6% during that period.
Couche-Tard’s extensive store base, focus on strategic acquisitions, and expansion of private label offerings will likely drive its revenue and EPS in the coming years. Additionally, its emphasis on value pricing and improved operational efficiencies will likely drive the company’s bottom line, enabling it to increase its dividend distributions further in the coming years.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is another compelling blue-chip stock for investors seeking income, growth, and stability over the long term. With a substantial market cap of around $113 billion, it is one of Canada’s leading producers of oil and natural gas.
Shares of Canadian Natural Resources have risen over 295% in five years, outperforming the broader market average by a wide margin. Moreover, it has bolstered investor returns through consistent dividend increases. Notably, Canadian Natural Resources increased its dividend for 24 consecutive years at an impressive CAGR of 21%. These returns stem from the company’s ability to grow its earnings and cash flows regardless of commodity cycles.
The energy company’s diversified revenue stream, long-life assets, and high-value reserves position it well to generate strong financials in all market conditions. Further, its low maintenance capital requirement, stringent cost management, and focus on reducing debt augur well for long-term profitability. Additionally, a solid balance sheet positions it well to pursue growth opportunities and return higher cash to its shareholders.
Toronto-Dominion Bank
Investors could consider adding shares of leading Canadian banks to their investment portfolio, with Toronto-Dominion Bank (TSX:TD) standing out as a particularly valuable choice. With a market capitalization of approximately $143 billion, this bank has established a strong track record of consistently increasing its earnings, which drives its share price and dividend payments.
Notably, Toronto-Dominion Bank has continuously paid dividends for an impressive 167 years. Moreover, it has been increasing its dividends at a CAGR of around 10% since 1998, surpassing its peers in this regard. The bank’s high-quality assets and well-diversified deposit base position it favourably to generate stable earnings. Additionally, its diverse revenue streams, robust credit quality, solid balance sheet, and operational efficiency contribute to its growth. Moreover, Toronto-Dominion Bank’s strategic focus on acquisitions bodes well for its long-term growth.
In summary, investors will likely benefit from steady capital appreciation and a dependable dividend income by investing in Toronto-Dominion Bank stock.
