Canadian blue-chip stocks stand out due to their solid fundamentals, large market caps, and promising growth prospects. Thus, these stocks are essential for boosting any portfolio’s performance. They can help diversify risk, provide steady capital gains, and are relatively less volatile. Additionally, many of these companies offer reliable dividend income.
With this backdrop, let’s look at three Canadian stocks that I believe every Canadian should consider owning.
Loblaw
Canadian food and pharmacy leader Loblaw (TSX: L) is a must-have stock for every Canadian. Its defensive business model and ability to grow traffic enable this blue-chip company to grow its earnings regardless of the economic situation. Thanks to its durable revenue and earnings growth, Loblaw stock provides stability to navigate macro uncertainty while generating steady capital gains.
Shares of this Canadian retailer have consistently outperformed the broader market averages. For instance, Loblaw stock has gained over 50% in one year. Moreover, it has grown at a compound annual growth rate (CAGR) of approximately 21% in the last five years, delivering overall capital gains of an impressive 161%. Besides notable capital gains, Loblaw has enhanced its shareholders’ value through share repurchases and dividend payments.
Loblaw’s hard discount stores and diverse product offerings position it well to attract and retain customers. Higher traffic will likely drive its same-store sales and earnings. Alongside value pricing, the expansion of omnichannel offerings and private-label offerings will boost its same-store sales growth rate. The retailer is focusing on expanding its hard discount store base and optimizing its retail network. These initiatives will likely bolster its financials and enable the company to return more cash to its shareholders.
Constellation Software
Investors planning to invest in Canadian blue-chip stocks could add Constellation Software (TSX: CSU) to their portfolios. This Canadian tech company specializes in acquiring and developing industry-specific software businesses and provides a range of specialized software and services across various sectors.
Constellation Software has a proven history of delivering consistent growth bolstered by its large customer base and strategic acquisitions. Thanks to its solid financials, Constellation Software stock has delivered solid returns in the recent past. For instance, the stock has gained about 50% in one year and about 265% in five years, delivering an average annualized return of over 29%.
Constellation Software’s diversified portfolio, large customer base, focus on offering customized software solutions, and aggressive acquisition and integration of vertical market software companies position it well to deliver solid financials in the coming years. Its solid financials will drive Constellation Software stock higher.
Canadian National Railway
Canadian National Railway (TSX: CNR) is a compelling investment for investors seeking top blue-chip stocks. This leading Canadian transportation company has an extensive rail network that plays a critical role in Canada’s supply chain infrastructure. As an essential service provider, Canadian National Railway stock exhibits resilience against market fluctuations, thereby offering stability to your portfolio.
Besides stability, Canadian National Railway stock offers steady capital gains. The company is also renowned for bolstering its shareholders’ returns through higher dividend payments.
Canadian National Railway stock has grown at a CAGR of over 9% in the past decade. It has also increased its dividend at a CAGR of 15% since 1996. The company has further rewarded its shareholders by repurchasing shares worth $35 billion since 2000.
Canadian National Railway’s resilient business model, investments to expand its rail network, exposure to diversified sectors, and solid balance sheet position it well to consistently deliver solid financials. This stability will enable the company to generate steady capital gains and reward its shareholders with higher dividend payments.
