5 Canadian Blue-Chip Stocks That Keep Growing Through Every Market

Blue-chip stocks like TD Bank and Fortis offer investors steady and predictable growth and shareholder value creation.

Karen Thomas, MSc, CFA

Karen is a stock market enthusiast focused on uncovering those stocks that she believes the market has mispriced. She does this through fundamental and quantitative analysis of companies and their industries, as well as a study of future opportunities and trends. She holds a Masters degree in Finance, the CFA designation, and has over 20 years of experience in the investment management industry. Having worked at a major pension fund, as well as two leading mutual fund firms as an analyst and portfolio manager, she has solid investing expertise which she aims to share with her readers.

Published January 23, 9:15 pm EST

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Key Points

• Five Canadian blue-chip stocks offer defensive positioning for all market cycles: Alimentation Couche-Tard (global convenience store leader with 12.7% annual growth since 2006), Fortis (premier utility with 52 consecutive dividend increases), and Loblaw (dominant grocery retailer benefiting from population growth).
• The remaining blue-chips include TD Bank (Canada's top-tier bank with 3.31% yield and conservative risk culture) and Waste Connections (integrated waste services company growing through strategic acquisitions in a fragmented industry), all providing stability through diversified operations and strong competitive positions.
5 stocks our experts like better than Alimentation Couche-Tard

Like it or not, the days of this bull market will come to an end, as market cycles are part of the natural ebb and flow of stock markets. But as investors, we can aim to position our portfolio to thrive through every market. This can be done through diversification and by adding blue-chip stocks to the mix. In this article, I will discuss five Canadian blue-chip stocks for you to consider.

Despite being from different industries, the following blue-chip companies (stocks) all have many commonalities that make them ideal stocks to own through every market. For example, they are defensive, they are well-managed with strong competitive positions, and they have posted strong growth.

diversification and asset allocation are crucial investing concepts — Source: Getty Images

Alimentation Couche-Tard: One of the best blue-chip stocks

One of the best Canadian blue-chip stocks is Alimentation Couche-Tard (TSX:ATD). Alimentation Couche-Tard is a leader in the convenience store sector. It has grown into a global behemoth, with over 17,200 sites and more than $72 billion in annual revenue.

Since 2006, Alimentation Couche-Tard has grown its pretax income at a 12.7% compound annual growth rate (CAGR). This is a reflection of the industry’s strong and consistent growth, as well as the company’s successful acquisition program. Today, Alimentation Couche-Tard continues to see opportunities for expansion in the fragmented U.S. market.

The company’s latest earnings result came in strong, with earnings per share (EPS) of $0.78 compared to $0.74 in the same period last year. Earnings continue to grow at a healthy pace and in a predictable and stable manner. We can expect growth from this defensive blue-chip stock to continue in every market.

Fortis: The premier blue-chip stock

Fortis (TSX:FTS) is famous for its stable, reliable and dependable performance. This means steady cash flow, earnings, operational performance, and steady shareholder returns. In fact, Fortis has a 52-year history of consecutive dividend increases.

As one of North America’s premier utility companies, Fortis benefits from its scale, diversification, and, of course, the fact that its revenues are regulated. This supports the stability and consistency that investors have come to expect from the company. This is why it’s a stock that keeps growing through every market.

Fortis is one of the best Canadian blue-chip companies (stocks), and it’s yielding 3.58% today.

Loblaw

Loblaw Companies (TSX:L) is another defensive powerhouse. This one is in the Canadian grocery market. Loblaw’s brand is well known and well-trusted in the food and pharmacy industries — consumer staples that we need in every market. The company has been experiencing growth due to population growth as well as its favourable competitive positioning. Loblaw doesn’t provide much of a dividend, but its stock has performed extremely well over the long term.

It’s a defensive, reliable Canadian blue-chip stock that investors can feel comfortable owning in every market.

TD Bank

Toronto-Dominion Bank (TSX:TD) is one of Canada’s top banks. It’s also a blue-chip stock that has survived and thrived in all markets. This is because of the bank’s conservative risk culture, its well-capitalized balance sheet, and its scale and North American presence.

TD Bank’s stock is currently yielding 3.31%. As this Canadian bank heads into the future, it’s well-equipped as one of Canada’s top two banks and North America’s sixth-largest bank. This size and market position within the banking industry gives TD Bank the advantage of diversification, presence and scale.

Waste Connections

Waste Connections (TSX:WCN) is an integrated solid waste services company. It provides waste collection, disposal, and recycling services in the U.S. and Canada. It also provides a lucrative, defensive, and rapidly growing business for investors who are looking for dividends and growth.

The company has grown through well-timed and well-executed acquisitions. The waste management industry was and continues to be a very fragmented industry, leaving plenty of room for Waste Connections to further its best-in-class acquisition strategy that has benefited the company and its shareholders. And that has placed it on the list of one of the best Canadian blue-chip stocks.