Canadian blue-chip stocks offer stability, income, and steady growth, making them attractive long-term investments. They are usually large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.
With this background, here are the three best blue-chip stocks every Canadian should own.
Stock #1
Alimentation Couche-Tard (TSX: ATD) is an attractive blue-chip stock known for offering stability, growth, and income. This leading Canadian convenience store operator has consistently delivered robust financials, driving its share price and dividend payments.
It is worth noting that Couche-Tard’s revenues grew at a compound annual growth rate (CAGR) of 6.2%, while its adjusted earnings per share (EPS) increased at a CAGR of 15.2% in the past decade. Thanks to its consistent growth, its stock price has gained more than 358% in the last 10 years, delivering an average annualized return of 16.4%. Further, its growing earnings base has enabled the retailer to increase its dividend per share at a CAGR of 25.6% during the same period.
Looking ahead, Couche-Tard will likely benefit from its extensive store base, value pricing strategy, growing loyalty membership programs, and focus on improving operational efficiency. Further, the company’s strategic acquisitions will expand its footprint, drive traffic, and support its financials. Also, its focus on increasing the penetration of private-label brands in its sales mix augurs well for margin expansion and long-term growth.
Stock #2
Canadian Natural Resources (TSX:CNQ) is another blue chip stock worth considering. This leading oil and natural gas producer has consistently generated solid financials, which have led to substantial returns and consistent dividend growth.
Canadian Natural Resources has uninterruptedly raised its dividend for 25 years, reflecting an impressive CAGR of 21%. Moreover, it offers a decent yield of 4.3%. Thanks to its exceptional financial performance and commitment to boosting its shareholders’ returns through higher dividend payments, its shares have risen over 285% in the past five years.
The energy giant’s diversified assets, high-value reserves, and low-capital-intensive projects will continue to boost future cash flows. In addition, its focus on acquisitions will fuel its revenue growth. Further, a low maintenance capital requirement and focus on lowering operating costs will likely drive its earnings and support its share price.
Stock #3
Canadian National Railway (TSX:CNR) is a top blue-chip stock to consider now. With an extensive rail network connecting key markets across North America, this transportation giant plays a pivotal role in Canada’s supply chain. The company’s services are deemed essential for the economy, adding stability to its operating and financial performance in all market conditions.
While Canadian National Railway operates a defensive business model, it offers decent capital gains and regular dividend income. Its stock has gained over 170% in the past decade, delivering an average annual return of more than 10%. Further, its growing earnings base has enabled the company to consistently increase its dividend since 1995. Moreover, it has enhanced its shareholder value through share repurchases.
Canadian National Railway’s resilient business model, exposure to diversified sectors, and focus on expanding its rail network position it well to deliver steady growth in the coming years. Moreover, a solid balance sheet positions it well to capitalize on growth opportunities. In addition, its efforts to improve operational efficiency will likely cushion its earnings and dividend payouts.
