Canadian blue-chip stocks are an excellent investment for building a resilient portfolio that can weather market ups and downs. These are large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base. Moreover, some companies reward their shareholders with regular dividend distributions and stock buybacks. With this backdrop, here are three Canadian stocks that, in my opinion, every Canadian should own.
Blue-chip stock #1
Brookfield Asset Management (TSX:BAM) is an excellent choice for investors seeking exposure to Canadian blue-chip stocks. It is one of the leading alternative asset managers, with about $1 trillion under management across sectors like renewable energy, infrastructure, private equity, real estate, and credit.
Thanks to its diverse portfolio, Brookfield generates solid risk-adjusted returns. The company operates an asset-light model and focuses on distributing a significant portion of its earnings. Notably, Brookfield Asset Management’s distributable earnings are comprised of highly predictable fee-related earnings, implying the company could continue to enhance its shareholder value through regular payouts.
Besides the dividend, the alternative asset manager aims to double its business size within five years, which will likely drive its share price higher. The company’s large-scale capital allows it to invest in premier assets worldwide, driving steady growth. Further, with significant liquidity, Brookfield has ample flexibility to fuel further growth.
Brookfield is also well-positioned to capitalize on the attractive artificial intelligence (AI) market. Its role as the largest investor in renewable energy and infrastructure gives it a strategic advantage. Brookfield Asset Management is well-poised for continued growth and delivering stellar returns with over 230,000 megawatts of renewable power and data centre assets either operating or under development.
Blue-chip stock #2
Canadian Pacific Kansas City (TSX:CP), or CPKS, operates a transcontinental freight railway that spans Canada, the United States, and Mexico. The company is vital for North American trade, transporting essential goods such as bulk commodities, merchandise, and intermodal shipments. Because its services are deemed essential for the economy, it delivers steady growth.
CPKC focuses on streamlining operations by reducing costs and enhancing productivity, which supports its earnings growth. Further, CPKC has a substantial real estate portfolio—over 6,000 acres of land adjacent to its terminals. This land offers a strategic opportunity for both internal operational expansion and long-term partnerships with key clients. CPKC is strengthening client relationships and laying a solid foundation for growth by co-locating customer facilities along its rail network.
Further, CPKC has access to more than 20 major ports in Canada, the U.S., and Mexico, making it one of North America’s most well-connected railway networks. This allows it to offer cost-effective transportation solutions, drive volumes, and solidify its position in the market.
In summary, its solid volume growth, cost management, and extensive network position it well to deliver steady growth.
Blue-chip stock #3
Loblaw (TSX:L) is a must-have blue-chip stock for Canadian investors. As Canada’s leading food and pharmacy retailer, Loblaw benefits from a low-risk business model, allowing it to steadily grow revenue and earnings. This steady performance supports share price growth, dividends, and stock buybacks.
Thanks to its earnings growth and consistent performance, Loblaw stock has appreciated by about 57% in one year and nearly 171% in the last five years.
The company’s discount stores, extensive product range, and value-focused pricing strategy help attract and retain customers through various economic conditions, driving consistent sales and earnings growth.
Moreover, Loblaw is also expanding its omnichannel offerings and increasing the penetration of private-label brands to boost same-store sales and support earnings. Further, with its focus on optimizing its retail network and growing its discount store footprint, the company is well-positioned for continued growth.
