There are plenty of fantastic blue-chip stocks that are still on sale as we move into the holiday season. Undoubtedly, while there has been quite a bit of talk about a Santa rally or a year-end bounce, I’d caution investors from punching their ticket into stocks with the expectation of such. Undoubtedly, the phenomenon of a Santa rally is exciting, but timing the markets for a short-term move, I think, isn’t the best move, especially for young investors who should actually be hoping for more pain so they can buy more shares of great firms at better prices.
Either way, this piece will have a look at two premier blue chips that I view as having solid value today, regardless of whether or not a Santa rally comes to town this year! At the end of the day, investors should focus on what’s cheap enough to buy, regardless of the seasonality or timing, which may be mostly noise when considering the big picture!
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Quebecor
There are so many battered bargains in the telecom scene today, many of which offer colossal yields well north of the 5% mark. And if you’re willing to brave the worst of the wreckage, there’s a nice yield over 9% to be had. Despite the potential for deeper value out there, I’d still prefer a name like Quebecor (TSX: QBR.B) for investors who prioritize long-term growth over dividends.
Though there’s still a solid payout (yield at 2.7% right now), it’s the dividend-growth potential and appreciation that are the stars of the show. Unlike many Canadian telecoms that have been in a bear market for quite some time, Quebecor stock is at a fresh high at over $52 per share. And at 14.7 times trailing price to earnings (P/E), the name is still not too pricey, especially when you consider the more enticing growth narrative.
In short, Quebecor and its wireless segment, Freedom Mobile, stand out as disruptors. So, if you’re in it for the growth, I think Quebecor is the name to be in. With a fairly low market cap of around $12 billion, there’s still plenty of room to rise as the growth ceiling is incredibly high.
Microsoft
Microsoft (NASDAQ: MSFT) is a much larger blue chip that seems to be worth picking up right here, even though the loonie isn’t in the most favourable spot versus the greenback. The enterprise AI behemoth sank another 1% on Monday, and there’s real concern that the tech correction might not yet be over.
Either way, the stock seems fairly priced at 34.5 times trailing P/E. Of course, the AI tides are shifting, and despite momentum in its impressive cloud business, there’s less optimism than the likes of its other mega-cap tech rivals. With a decent stake in OpenAI and plenty of its own AI ambitions, the latest correction seems like more of a chance to buy than anything else.
Of course, investors might wish to wait for the negative momentum to run its course before jumping in too aggressively. In short, Microsoft may not be a steal right here, but it’s not all too expensive either, especially if you’re not put off (many are right now) by the firm’s excessive AI capital expenditures.
