If you’re looking for a top stock on the TSX, then look no further than blue-chip stocks. They are like the all-star players of the investment world. These companies are typically large, well-established, and financially sound, boasting a long history of stable earnings and reliable dividends. The stocks usually operate in sectors that are integral to the economy, such as financial services, utilities, or consumer goods. This makes them resilient even during market downturns.
So, if you’re looking to build a solid investment portfolio for your Tax-Free Savings Account (TFSA), blue-chip stocks are often the way to go! Especially when looking to add another $7,000 in contribution room.
Intact Financial
If you’re a Canadian investor looking to add a blue-chip stock to your portfolio, look no further than Intact Financial Corporation (TSX:IFC). This company boasts impressive growth, driven by strong performance in personal lines. With a combined ratio of 87.1% (a measure of profitability comparing claim losses and expenses to premiums), IFC showcases solid underlying performance and limited catastrophic losses, making it a dependable choice.
Moreover, the company’s net operating income (NOI) per share has skyrocketed to $4.86. This was fuelled by stellar underwriting results and consistent growth in investment income. Notably, their operating return on equity (ROE) has jumped to 17%, showing its efficiency in generating profits.
But what really sets IFC apart is its robust balance sheet, featuring a total capital margin of $2.9 billion and a reduced debt-to-total capital ratio of 19.8%. Charles Brindamour, the CEO, emphasized the stock’s commitment to assisting customers in challenging times. With a focus on leveraging competitive advantages and maintaining profitability momentum, IFC aims for a 10% growth trajectory in net operating income per share. Whether you’re seeking stability or growth, IFC offers a compelling blend of both. Thus making it an excellent pick for every Canadian investor’s portfolio.
Metro
Metro (TSX:MRU) is a top-notch blue-chip stock that every Canadian investor should consider for their TFSA. With a solid market cap of $18.9 billion and a trailing Price/Earnings (P/E) of 20.7, MRU has demonstrated resilience and growth potential. The company’s recent performance highlights a 3.5% increase in sales for Q3 2024, driven by strong food and pharmacy same-store sales.
Despite facing challenges in net earnings, Metro is focusing on effective merchandising and operational improvements – ones like the new automated distribution centre in Terrebonne. Thus ensuring it remains competitive and well-positioned in the grocery sector.
What makes MRU particularly appealing is its commitment to delivering value to customers amid fluctuating food inflation. With a forward P/E of 18 and a reasonable payout ratio of 31.2%, the company also offers a stable dividend yield of 1.6%. The ongoing enhancements in productivity and strategic focus on its retail network contribute to a bright future. As grocery shopping remains a staple in Canadian households, MRU is poised for continued growth. Thus making it a smart investment choice for those looking to enhance their portfolios with a reliable blue-chip stock.
CGI
CGI (TSX:GIB.A) is a stellar blue-chip stock as well. With impressive Q3-F2024 results, the company reported revenue of $3.7 billion, a year-over-year increase of 1.3%. Its earnings before income taxes rose to $594 million, reflecting a solid margin of 16.2%. What’s particularly exciting is the robust bookings of $4.3 billion, leading to a book-to-bill ratio of 116.6%. This indicates a strong demand for their services. With a backlog of $27.6 billion, CGI is well-positioned for continued growth, thus demonstrating their resilience in a competitive landscape.
Not only does CGI have a strong financial foundation. It also boasts an impressive net earnings figure of $440.1 million, marking a 6.1% increase year-over-year. Its operating cash flow of $2.2 billion showcases its ability to generate cash and maintain liquidity. This is critical for funding future growth initiatives. The company is also dedicated to returning value to shareholders, with a prudent management approach that has led to a healthy return on equity of 19.5%. With its solid track record and promising outlook, CGI Inc. is a smart pick for investors looking to bolster their portfolios with a reliable blue-chip stock.
