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Investing in the stock market is risky, and investors are always looking for avenues that offer high rewards with lower risk percentages. The primary objective of every stock market investor is to seek out investments that can yield the highest returns with the least risk. This requires the selection of a well-balanced, diversified portfolio of stocks that offer lucrative total returns to the investor.
There are a plethora of options available to the investor when it comes to stock market investments, such as large-cap stocks, small-cap stocks, mid-cap stocks, dividend stocks, growth stocks, real estate investment trust stocks, and various funds like commodity funds, hedge funds, index funds, and more. In this turbulent market, investors seek safe products, particularly equities, that can offer returns in the form of earnings through price appreciation.
Blue-chip stocks meet these conditions and offer an income stream through capital growth. These stocks of market-leading businesses are dominant forces in their field. They are stable, lucrative, and have significant market capitalizations that continue growing. These businesses are renowned for providing their shareholders with greater returns, and they often give monthly dividends to their owners, which is an additional valuable characteristic. Therefore, investing in blue-chip stocks is the safest way for any investor to make money from the stock market over the long term.
Top 5 Blue Chip Stocks Canada in 2023
Blue Chip Stocks Canada: Top 5 You Need to Invest In Right Now
TC Energy Corporation (TSE: TRP)
Investors are highly interested in TC Energy Corporation, one of North America’s most significant energy companies, due to its outstanding market performance and dividend payouts. This company is considered a top-tier investment option with the potential for earnings growth and the ability to outperform. With the best infrastructure in North America, TC Energy Corporation is also planning for expansion through investments in growth projects, with a majority of up to $37 billion spent on natural gas pipelines.
Amid global oil tensions, this strategy gives TC Energy Corporation an advantage by allowing them to utilize its resources to meet domestic and international energy demands. Overall, TC Energy Corporation is a premier stock to invest in due to its impressive track record, expansion plans, and ability to cater to the world’s evolving energy needs.
With the 2023 Q1 earnings release, TC Energy has proven why it’s a shareholder favorite. A current dividend yield of 6.57%, and an increase in net income from Canadian Gas Pipelines of approximately 11%, make it even more lucrative for investors. These figures make it a top buy for people looking for a passive income stream in times of high market volatility.
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Barrick Gold (TSE: ABX)
Investors may sometimes achieve better returns from owning gold stocks rather than physical gold. Barrick Gold Corporation is a company that catches the attention of many investors when investing in gold stocks. Although Barrick Gold does not pay dividends, it offers investors great returns through capital appreciation and value enhancement. This helps maintain a favorable risk-return ratio and supports investors’ risk tolerance.
Barrick completes its premium gold mining portfolio with a strong balance sheet. It has focused on reducing debt over the last five years through free cash flow and the sale of non-essential assets. By the end of 2022, the business had a positive cash balance, giving it the freedom and security to repurchase shares and pay a competitive dividend. It is one of the most sought-after gold stocks in this volatile stock market due to its $34.53 billion market valuation and a current dividend yield above 2%. Moreover, the Q1 2023 earnings have some significant figures, with earnings reported at $120 million for the first quarter. Net income per share of 7 cents and earnings, adjusted for non-recurring costs of 14 cents per share, combined with a revenue of $2.54 billion for the said period, shows its potential to grow even higher this year, making it a must-buy and hold gold stock for 2023.
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Sun Life Financial (TSE: SLF)
One of the largest life insurance companies, Sun Life Financial Inc. is a household name in Canada and has been providing its services globally for many years. It is human psychology that we become confident about something if we are using it. That psychology affects market volatility and stability as well. All the stocks of the companies that are most used grands in any household comprise the majority part of the blue-chip stocks range. One of them in Canada’s blue-chip stock list is Sun Life, as its products are a part of almost every Canadian citizen making it popular among the masses.
Sun Life’s dividend yield is 4.4%, with an annual payment of $2.88 per share. Despite difficult macroeconomic circumstances, the company had its net income increase to $990 million in the final quarter of 2022.
Since the last decade, SLF stock has increased 229%, and it now trades at a very low ten times forward earnings. It is valued at 12.3% below consensus price target projections. The total returns are expected to be approx. 15-17% if the dividend yield is taken into consideration.
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Alimentation Couche-Tard (TSE: ATD)
Alimentation Couche-Tard is a well-known Canadian multinational operator of convenience stores, with around 14,000 stores worldwide contributing to its significant growth. Over the years, the company has demonstrated commendable revenue growth and strong and positive cash flows. Despite low margins, the multinational uses its full supply-chain scale and sales volume to expand strategically through acquisitions.
With a market capitalization of approximately $63.11 billion and a 13-year dividend streak, this is one of the most promising Canadian dividend stocks for any investor’s portfolio. Regardless of market conditions, returns will flow in the form of dividends, and a current yield of around 0.90% makes it even more attractive. The third-quarter earnings of the fiscal year 2023 reported net earnings of $737.4 million, and the forward growth projections indicate significant market value performance potential.
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Enbridge (TSE: ENB) and Brookfield Renewable Partners (TSE: BEP.UN)
Both Enbridge and Brookfield Renewable Partners are significant players in the North American energy sector. The fundamentals of both these companies are solid. While Enbridge owns the energy sector through its mid-stream oil operations, Brookfield is one of the giants in the clean energy sector.
Enbridge is known for paying out sizable dividends, and over the past 20 years, it has made an effort to raise its dividend yield yearly. In the most recent year, it reported a dividend yield of about 7%. It is one of Canada’s Dividend Aristocrats and one of the highest-paying dividend stocks in the country. Brookfield Renewable Partners has a forward yield of 4.4%. Its development pipeline will enable it to add 110 GW of energy capacity. With a stellar financial position and over $4 billion in cash, Brookfield can expand organically and through acquisitions.
The Q1 2023 results of both companies are promising. Enbridge reported first-quarter earnings of $1.34 billion, while Brookfield’s Fund from Operations stood at $275 million. We had recommended both these stocks in April and did so in May.
Conclusion
Although we have discussed the top 5 blue-chip Canadian stocks that should be part of every investor’s portfolio, it is essential to understand their offerings and how their returns compare. Investors should clearly understand their financial goals before considering the inclusion of any or all of these stocks in their portfolio, whether for their steady returns or their potential for significant growth.
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