12 Best Canadian Blue-Chip Stocks (Sep 2022)

Want to invest in companies that have been around for a long time and have a reputation for stable quality and results?

Blue-chip companies have gotten their label from blue chips within a poker set, which usually represents the highest dollar amount out of all the chips.

Blue-chip companies have done a great job of posting great operating results over time and are generally stable during tough economic times.

We will cover the best Canadian blue-chip stocks to consider for your portfolio below. 

Pros and Cons of Blue-Chip Stocks

Blue-chip stocks, like all other investments, come with their advantages and disadvantages. 

One of the most important things to understand when investing is the trade-off between risk and returns. As an investment becomes riskier, it tends to offer a higher potential return and vice versa.

Make sure that the properties of blue-chip stocks are well aligned with your investment goals and objectives before deciding to add them to your portfolio.

Pros
  • More stability during uncertain market conditions
  • A high dividend yield
  • A larger market cap
Cons
  • Less explosive stock price growth
  • Slower future growth because of higher dividend payout ratios
  • Perceived safety may deceive investors (Lehman Brothers and General Motors bankruptcies etc.)

Best Canadian Blue-Chip Stocks

At a quick glance, here are our top picks for Canadian blue-chip stocks, which I will go over in more detail below.

Name of BankTickerMarket CapForward P/E Ratio12-Month Trailing Dividend Yield
Enbridge Inc.ENB.TO$109.44 Billion17.556.28%
Royal Bank of CanadaRY.TO$173.94 Billion10.453.79%
Canadian National Railway CompanyCNR.TO$104.71 Billion19.461.75%
Brookfield Asset ManagementBAM-A.TO$100.97 Billion12.580.87%
Toronto-Dominion BankTD.TO$156.33 Billion11.34.02%
Canadian Pacific Railway LimitedCP.TO$89.24 Billion21.190.79%
Bank of Nova Scotia (Scotiabank)BNS.TO$83.25 Billion8.245.6%
Nutrien LimitedNTR.TO$64.09 Billion6.031.58%
Bank of MontrealBMO.TO$83.64 Billion8.674.09%
Fortis Inc.FTS.TO$26.94 Billion19.013.76%
Metro Inc.MRU.TO$16.91 Billion17.211.51%
Barrick Gold CorporationABX.TO$36.02 Billion14.741.91%

1. Enbridge Inc.

Enbridge Stock
  • Ticker: ENB.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 6.35%
  • Dividend Payout Ratio: 140.66%
  • Dividend Yield (12-Month Trailing): 6.28%
  • Upcoming Dividend Date: Sep 01, 2022
  • Market Cap: $109.44 Billion
  • Forward P/E Ratio: 17.55
  • Average Analyst Rating: 2.3 - Buy

Enbridge is a well-known pipeline company with headquarters in Calgary, Alberta. It is part of the midstream segment within the oil and gas industry, meaning that it transports fuels to consumers and businesses.

Key reasons to invest in Enbridge include:

  • A long history of offering correct earnings guidance
  • Continuous dividend growth over time
  • Strong total returns when compared to peers
Enbridge

Enbridge ranks among some of the largest publicly-traded Canadian companies and pays an excellent forward dividend yield to investors. The stock is also listed on the New York Stock Exchange under the ticker ENB.

With over 10,000 current employees and the longest pipeline system in North America, it is a critical business here in Canada. Enbridge’s operations also span into the US.

Al Monaco is the current CEO of Enbridge.

The company has committed to more sustainable operations and projects, which will appeal to ESG-oriented investors. Enbridge has laid out a net zero gas emission target for the future and has completed several renewable energy projects globally.

Despite some past volatility in the company’s stock price, it has been extremely resilient over the past few decades, offering a high dividend that has helped to offset negative performance to some extent.

Enbridge is a great choice as a blue-chip pick given the nature of its operations, size, and excellent dividend yield potential.

2. Royal Bank of Canada

rbc bank logo
  • Ticker: RY.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 4.19%
  • Dividend Payout Ratio: 43.35%
  • Dividend Yield (12-Month Trailing): 3.79%
  • Upcoming Dividend Date: Nov 24, 2022
  • Market Cap: $173.94 Billion
  • Forward P/E Ratio: 10.45

RBC is the largest bank in Canada by market cap. Globally, it also ranks among the biggest banks in the world.

RBC:

  • Has over 89,000 employees globally
  • Works with over 17 million clients
  • Has clients in over 29 different countries

David McKay is currently the CEO of RBC.

Royal Bank of Canada focuses on five business lines:

  • Personal and commercial banking
  • Capital Markets
  • Insurance
  • Wealth Management
  • Investor and Treasury Services

RBC is usually the largest Canadian stock by market cap. The stock also trades on the New York Stock Exchange under the ticker RY, for investors that wish to invest using US dollars.

The bank pays a good dividend yield and has done so for a long period of time. Given the bank’s leadership position in Canada, it usually trades at a slight valuation premium against other Canadian banks.

RBC is a value stock and trades at a very reasonable forward price-to-earnings ratio. Currently, the bank’s dividend yield relative to peers is slightly lower, but it is still a great-yielding stock when compared across sectors and industries.

From a performance perspective, RBC stock has had an excellent long-term track record of performance.

RBC stock is a great option for most portfolios when looking for Canadian blue-chip companies.

3. Canadian National Railway Company

Canadian National Railway Stock
  • Ticker: CNR.TO
  • Size: Large Cap
  • Valuation: Growth
  • Forward Dividend Yield: 1.82%
  • Dividend Payout Ratio: 37.02%
  • Dividend Yield (12-Month Trailing): 1.75%
  • Upcoming Dividend Date: Sep 29, 2022
  • Market Cap: $104.71 Billion
  • Forward P/E Ratio: 19.46
  • Average Analyst Rating: 2.7 - Hold

Canada National Railway is one of the largest railway companies in North America, headquartered in Montreal. It is the largest railway network in Canada and operates extensively throughout the US as well.

The company used to be owned by the Canadian government until it was taken private in 1995. CNR has a railway system over 30,000 kilometres in length that spans most of the Canadian provinces.

More recently, Bill Gates has become the largest individual shareholder of CNR with an ownership stake of over 14%.

Tracy Robinson is currently the CEO of Canada National Railway.

CNR reports key weekly metrics to the general public and investors on their website. This allows investors to closely monitor operations on a very frequent basis and assess trends.

Here are some of the operational stats CNR provides:

CNR key weekly metrics

CNR  is one of the largest publicly-traded Canadian companies and pays a decent forward dividend yield, despite being a growth stock.

With over 24,000 employees, the company’s business operations are critical for the Canadian economy as it allows for quick transportation of goods over long distances.

Since becoming privatized, CNR has offered stock investors an excellent long-term rate of return.

Canada National Railway is an excellent choice for individuals looking for a more growth-oriented blue-chip company within Canada.

4. Brookfield Asset Management

Brookfield Renewable Partners Stock
  • Ticker: BAM-A.TO
  • Size: Large Cap
  • Valuation: Growth
  • Forward Dividend Yield: 1.09%
  • Dividend Payout Ratio: 23.58%
  • Dividend Yield (12-Month Trailing): 0.87%
  • Upcoming Dividend Date: Sep 29, 2022
  • Market Cap: $100.97 Billion
  • Forward P/E Ratio: 12.58
  • Average Analyst Rating: 2.0 - Buy

Brookfield is one of the largest alternative asset managers in the world, headquartered in Toronto. Alternative asset management refers to investing capital outside traditional avenues such as stocks and bonds.

Brookfield invests in high-quality, long-term assets and businesses. Areas of focus include infrastructure, real estate, private equity, and renewable power.

With over $750 billion of assets under management, Brookfield Asset Management aims to produce great long-term returns for clients and shareholders.

Reasons for considering Brookfield as a stock within your portfolio include:

  • The company is a leading alternatives manager
  • A track record of over 100 years of owning and managing real assets
  • Contracted revenues leading to stable cash flows over time

Brookfield operates in more than 30 countries and employs over 150,000 individuals globally. The company’s CEO is currently Bruce Flatt.

The company is currently releasing a yearly ESG report and aims to be net zero (Scope 1 and 2 emissions) by 2050.

Brookfield Asset Management is among the largest publicly-traded companies in Canada and is also listed on the New York Stock Exchange under the ticker BAM. For investors investing in the company through the TSX, it’s important to note that BAM.A are common shares and BAM.B are preferred shares. 

Brookfield pays a fairly low dividend relative to other names on our list and is valued as a growth company. It has rewarded existing shareholders with an excellent long-term performance track record.

If you are looking for a growth blue-chip stock with great future growth prospects and a solid performance track record, Brookfield Asset Management is a great name to consider.

5. Toronto-Dominion Bank

Toronto-Dominion Stock
  • Ticker: TD.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 4.15%
  • Dividend Payout Ratio: 41.74%
  • Dividend Yield (12-Month Trailing): 4.02%
  • Upcoming Dividend Date: Oct 31, 2022
  • Market Cap: $156.33 Billion
  • Forward P/E Ratio: 11.3
  • Average Analyst Rating: 2.6 - Hold

The second largest bank in Canada by market capitalization is currently the Toronto-Dominion Bank. Like RBC, it is among the largest banks in the world in terms of size.

TD employs more than 90,000 people around the world and works with more than 26 million clients globally. The bank’s CEO is currently Bharat Masrani.

TD operates across three main business segments:

  • Canadian Retail
  • US Retail
  • Wholesale Banking

As of early 2022, TD Bank had $1.8 trillion in assets. The bank’s stock is also listed on the NYSE under the ticker TD for investors wishing to purchase it in US dollars.

As the second largest Canadian bank, TD is constantly one of the largest Canadian stocks trading on the Toronto Stock Exchange at any given time

TD has a long track record of paying dividends to investors and plans to do so going into the future. The bank ranks well across ESG metrics and was named one of the best workplaces in Canada.

TD as best workplaces in Canada

Currently, the bank is a value stock and is trading at a lower price-to-earnings ratio than stocks in most other Canadian industries. When compared to other major Canadian bank peers, TD offers a slightly lower dividend yield.

As a massive Canadian bank, TD is a great blue-chip stock to consider adding to your portfolio.

6. Canadian Pacific Railway Limited

Canadian Pacific Railway Logo
  • Ticker: CP.TO
  • Size: Large Cap
  • Valuation: Growth
  • Forward Dividend Yield: 0.73%
  • Dividend Payout Ratio: 26.48%
  • Dividend Yield (12-Month Trailing): 0.79%
  • Upcoming Dividend Date: Oct 31, 2022
  • Market Cap: $89.24 Billion
  • Forward P/E Ratio: 21.19
  • Average Analyst Rating: 2.2 - Buy

Canadian Pacific Railway is another massive railroad company headquartered in Calgary, Alberta. It is the largest railway network in Canada and operates extensively throughout the US as well.

The company owns over 20,000 kilometres of track across Canada and the US and is classified as a Class I railway (the largest classification).

As of 2022, CP is in talks to purchase the Kansas City Southern Railway, which would create a new railroad entity (the first to serve Canada, the US, and Mexico).

The current CEO of the Canadian Pacific Railway is Keith Creel.

Similar to CNR, CP also reports key metrics on a weekly basis to the public and investors. These statistics can help investors to monitor the company’s operating performance.

CP key metrics

As a very large Canadian publicly-traded company, CP is valued as a growth stock. It offers investors a very low forward dividend yield when compared to other companies on our list.

CP is also listed on the New York Stock Exchange under the ticker CP.

The Canadian Pacific Railway is a critical business to the health of the Canadian economy and employs approximately 12,000 individuals. Over the long term, CP stock has provided investors with a great rate of total return.

CP is a great blue-chip stock to consider for investors looking for a company with a growth profile and a lower dividend yield.

7. Bank of Nova Scotia (Scotiabank)

Scotiabank logo
  • Ticker: BNS.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 5.38%
  • Dividend Payout Ratio: 47.01%
  • Dividend Yield (12-Month Trailing): 5.6%
  • Upcoming Dividend Date: Oct 27, 2022
  • Market Cap: $83.25 Billion
  • Forward P/E Ratio: 8.24
  • Average Analyst Rating: 2.8 - Hold

The third largest Canadian bank (by market cap) is the Bank of Nova Scotia, or Scotiabank. The bank’s main differentiating feature versus other Canadian banks is its global presence across many countries in the western hemisphere.

Scotiabank has over 90,000 people globally and had around $1.3 trillion in assets as of earlier this year.

Brian Porter is currently the CEO of the Bank of Nova Scotia.

Scotiabank separates its business across four main lines:

  • Canadian banking
  • International banking
  • Global banking and markets
  • Global wealth management

Scotiabank is a top three bank in Chile, Canada, and Peru. It is also a top-six bank in Colombia and a top-five bank in Mexico. The bank frequently wins awards for its digital offering and has a strong digital presence with clients.

For investors looking to buy Scotiabank stock with US dollars, it is also listed on the New York Stock Exchange under the ticker BNS.

While quite a bit smaller than RBC and TD in market cap, it still sits among the largest publicly traded companies in Canada.

Scotiabank stock offers a great dividend and currently has the highest forward dividend yield among its peers.

Value investors will find Bank of Nova Scotia’s stock attractive since metrics such as its price-to-earnings ratio are fairly low.

As a high-yielding Canadian bank stock, Bank of Nova Scotia’s stock is a great blue-chip option for most stock portfolios.

8. Nutrien Limited

Nutrien
  • Ticker: NTR.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 2.05%
  • Dividend Payout Ratio: 15.22%
  • Dividend Yield (12-Month Trailing): 1.58%
  • Upcoming Dividend Date: Oct 14, 2022
  • Market Cap: $64.09 Billion
  • Forward P/E Ratio: 6.03
  • Average Analyst Rating: 2.2 - Buy

Nutrien is a Canadian fertilizer company with headquarters in Saskatoon, Saskatchewan. Globally, it is the third largest producer of nitrogen fertilizer and the largest producer of potash.

Nutrien was formed as a result of two companies merging together several years ago – PotashCorp and Agrium. The company currently has over 23,500 employees and produces approximately 27 million tonnes of fertilizer inputs.

Nutrien

The company has a strong commitment to ESG principles and has a carbon program in effect.

Scotiabank has over 90,000 people globally and had around $1.3 trillion in assets as of earlier this year.

The current interim CEO of Nutrien is Ken Seitz, having been appointed in January of 2022.

Nutrien focuses on the production of:

  • Potash-based fertilizers
  • Nitrogen-based fertilizers
  • Phosphate-based fertilizers

Nutrien is also listed on the New York Stock Exchange, where it trades under the ticker NTR.

NTR offers a decent forward dividend yield and trades at an extremely cheap valuation when considering its forward price-to-earnings ratio. 

Given its low valuation and the increasing importance of fertilizer in a world where food is becoming increasingly scarce, Nutrien is likely a sound long-term investment.

For investors that are looking for an extremely cheap blue-chip stock that offers a decent dividend yield, Nutrien is an excellent option to consider.

9. Bank of Montreal

BMO
  • Ticker: BMO.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 4.35%
  • Dividend Payout Ratio: 26.23%
  • Dividend Yield (12-Month Trailing): 4.09%
  • Upcoming Dividend Date: Nov 28, 2022
  • Market Cap: $83.64 Billion
  • Forward P/E Ratio: 8.67
  • Average Analyst Rating: 2.1 - Buy

Bank of Montreal is the fourth-largest Canadian bank by market capitalization. BMO’s founding took place in 1817, making it the oldest bank in Canada.

The bank is currently differentiating itself from peers through ESG orientation, with a large focus on sustainability and inclusion.

The Bank of Montreal is the eighth largest bank in North America by assets, with over $1 trillion. It has over 12 million clients globally, with 8 million clients being Canadians.

BMO has been paying dividends continually since 1829. At 193 consecutive years, this is the longest dividend payout record of any publicly-traded company in Canada.

The bank of Montreal operates across three business lines:

  • Personal and commercial banking
  • BMO wealth management
  • BMO capital markets

The bank is also listed on the New York Stock Exchange under the ticker BMO for investors wishing to purchase shares with US dollars.

Darryl White is the current CEO of BMO.

Based on its forward price-to-earnings ratio, BMO is relatively cheap when compared to other Canadian bank peers. When compared to other Canadian stocks in general, the forward price-to-earnings ratio is low.

From a dividend perspective, BMO pays a good dividend yield. Relative to Canadian bank peers, the dividend yield is fairly average.

The bank’s operations in the US represent roughly a third of its 2021 revenue and earnings. The bank’s US operations will continue to remain an important component of future growth for the company.

As an ESG-focused Canadian bank that trades at inexpensive multiples, BMO is a good option to consider for Canadian blue-chip stock portfolios.

10. Fortis Inc.

Fortis Stock logo
  • Ticker: FTS.TO
  • Size: Large Cap
  • Valuation: Value
  • Forward Dividend Yield: 3.62%
  • Dividend Payout Ratio: 79.92%
  • Dividend Yield (12-Month Trailing): 3.76%
  • Upcoming Dividend Date: Sep 01, 2022
  • Market Cap: $26.94 Billion
  • Forward P/E Ratio: 19.01
  • Average Analyst Rating: 3.1 - Hold

Fortis is mainly an electricity generating and distributing utility company with headquarters in St. John’s, Newfoundland and Labrador. As an energy delivery business, 93% of total assets are infrastructure dedicated to delivering natural gas and electricity to customers.

Fortis has approximately 3.4 million electricity and gas utility customers and brought in over $9 billion dollars in revenue during fiscal 2021.

The company has over 9,000 employees globally and roughly $60 billion in total assets as of mid-2022.

David Hutchens is currently the CEO of Fortis.

The company releases at least one sustainability report yearly, in addition to other ESG materials throughout the year. Fortis plans to be net-zero in terms of greenhouse gas emissions by 2050.

Out of the $20 billion capital plan for 2022-2026, $3.8 billion is dedicated to cleaner energy investments.

cleaner energy investments

The company has an excellent track record of paying dividends, with 48 years of consecutive dividend payment increases.

Fortis is also listed on the New York Stock Exchange under the ticker FTS.

Although Fortis is currently trading at a relatively high forward price-to-earnings ratio, other metrics such as price-to-book and price-to-sales are more modest, classifying it as a value stock.

Fortis’ past stock performance has been excellent, especially when considering the stock’s stability over time. The company is currently paying a good forward dividend yield of over 3.5%.

As a critical energy delivery company operating in Canada, Fortis is a great, well-rounded blue-chip stock to be considered for any blue-chip portfolio.

11. Metro Inc.

metro Stock logo
  • Ticker: MRU.TO
  • Size: Large Cap
  • Valuation: Core
  • Forward Dividend Yield: 1.58%
  • Dividend Payout Ratio: 22.22%
  • Dividend Yield (12-Month Trailing): 1.51%
  • Upcoming Dividend Date: Sep 21, 2022
  • Market Cap: $16.91 Billion
  • Forward P/E Ratio: 17.21
  • Average Analyst Rating: 2.6 - Hold

Metro is a publicly-traded grocery store company that is the third largest grocer in Canada. Currently, the company is operating only in the provinces of Quebec and Ontario. Metro is headquartered in Montreal.

Metro operates approximately 950 grocery stores under several brands:

  • Metro
  • Metro Plus
  • Super C
  • Food Basics

Aside from its grocery stores, Metro also operates roughly 650 pharmacies under the following brands:

  • Jean Coutu
  • Brunet
  • Metro Pharmacy
  • Food Basics Pharmacy

The company is putting significant emphasis on ESG practices, with a 2022-2026 corporate responsibility plan in place.

Metro Inc

The currency CEO of Metro is Eric La Flèche.

Metro trades at a core valuation, making it more richly valued than value stocks and more inexpensive than pure growth stocks.

MRU pays a fairly low dividend yield. Its policy is to pay out dividends which represent 30-40% of net earnings from the previous year (before extraordinary items).

As a company within the consumer staples sector, Metro has shown a lot of stability through limited volatility in its share price. The company is not listed on any US exchanges, meaning shares will have to be purchased with Canadian dollars.

As one of the top Canadian grocers, Metro is an excellent blue-chip choice to consider for a stock portfolio.

12. Barrick Gold Corporation

Barrick gold logo
  • Ticker: ABX.TO
  • Size: Large Cap
  • Valuation: Core
  • Forward Dividend Yield: 5.33%
  • Dividend Payout Ratio: 33.63%
  • Dividend Yield (12-Month Trailing): 1.91%
  • Upcoming Dividend Date: Sep 15, 2022
  • Market Cap: $36.02 Billion
  • Forward P/E Ratio: 14.74
  • Average Analyst Rating: 2.1 - Buy

Barrick Gold Corporation is a well-known Canadian gold (and copper) mining company. The company’s headquarters are in Toronto, Ontario.

Barrick Gold is one of the lowest all-in sustaining cost (AISC) producers of gold, considerably lower than peers in the gold mining group. Barrick can likely continue to remain profitable beyond its peers if gold prices fall or stay low.

Recently, Barrick has been focused on streamlining its operations, being involved in a lot of merger and acquisition transactions throughout 2019.

Barrick Gold is also listed on the New York Stock Exchange under the ticker GOLD. This allows investors to purchase shares using US dollars.

The company has globally diversified operations and is involved with gold or copper mining across several continents. It has a great dividend-paying track record which will likely continue into the future, especially if gold prices rise or stay elevated.

Barrick Gold has been releasing a yearly sustainability report since 2008 although it is slightly lagging behind peers in ESG metrics.

ABX trades at moderate ratios, classifying it as a core stock.

As one of the lowest-cost producers of gold in Canada, Barrick Gold is a great choice to consider for a blue-chip stock portfolio, especially given the defensive properties of gold.

Should you Invest in Blue-Chip Stocks?

The decision to invest in blue-chip stocks versus other investments depends on your characteristics as an investor. 

Before investing in any equities, your risk tolerance should be at least a “medium.” Within the universe of stocks, the safest would be considered medium risk, while more aggressive stocks could be closer to high risk.

Blue-chip stocks tend to be considered safer than other stocks, so their risk is likely closer to a medium risk rating. These stocks are a great potential choice for investors that:

  • Prefer lower volatility within their stock portfolio
  • Are looking for a stable income stream through stock dividends
  • Want to invest in businesses that are generally essential or important to an economy

How to Pick Blue-Chip Stocks

It’s important to look at a few features of blue-chip stocks before adding them to your portfolio.

For a stock to be considered blue-chip, it must typically be at least mid-cap or large-cap (typically a market cap of over $2 billion). The company must also have a long track record of good results and overall stability.

Once a stock fits the blue0chip criteria, here are some features to look for that could make it a good candidate for an investor’s portfolio:

  • A solid and growing dividend yield over time
  • A business with a moat around operations (making it difficult for peers to compete or exist)
  • A long performance track record with a history of being relatively stable during periods of market stress

Conclusion

There are a lot of excellent options when it comes to finding Canadian blue-chip stocks.

Although the Canadian economy is concentrated across only a few sectors, there are many excellent stock choices to choose from to grow your money over time.

Dividend aristocrats are a very similar type of stock to blue-chip companies. Make sure you consider some of the best dividend aristocrat stocks in Canada as well. 

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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