Canadian Blue Chip Stocks - Good Yields - Trade on the NYSE and TSE

[Shiv Naimpally]

My dad, a mathematics professor (over 100 published papers and a dozen books), did very well investing in Canadian blue chip stocks in his retirement accounts. He lived in Canada and for most of his life, the Canadian government had a rule that at least 80% of a retirement account (similar to an IRA) had to be invested in Canadian stocks. FYI, this rule was later eliminated but I mention it because this drove my dad to analyze Canadian stocks to find safe investments. The blue chip stocks in Canada are dividend kings - stocks that have been paying a dividend consistently for many years and have never cut their dividend. These stocks include the 5 major Canadian banks, a large etelcom company, and a large pipeline operator. I will also mention a few other stocks with good yields. Due to their yields, these stocks may be suited for consideration when investing ("buy and hold").

The big Canadian banks are (in no particular order) Canadian Imperial Bank of Commerce (CM), Toronto Dominion (TD), Royal Bank (RY), Bank of Monreal (BMO), and Bank of Nova Scotia (BNS). All of them trade on both the Toronto Stock Exchange (TSE) and on the New York Stock Exchange (NYSE). In Canada, banks are very heavily regulated, and are not allowed to engage in risky practices. Therefore, the Canadian banks are unlikely to experience what happened in the USA during the financial crisis (or during the Savings and Loan crisis).

For growth, the Canadian banks have turned to other countries, particularly the USA, and have been buying up US-based regional banks to the extent that almost all of them (with the possible exception of BNS), all get more than 50% of their revenue from their US-based operations. BNS has been buying up banks in emerging markets, particularly Latin America, and so has a large presence in Mexico, the Carribean, Central America, and South America. The next time you take a vacation to Mexico or the Carribean, keep an eye out for BNS (which uses "Scotia Bank" in their advertising). Thus, BNS is one way to gain exposure to emerging markets. All of the Canadian banks offer excellent dividend yields. For example, current yields are BNS (5.8%), CM (5.2%), BMO (4.2%), TD (3.9%), and RY (3.9%).

Bell Canada Enterprises (BCE) started off as the dominant telephone company (similar to AT&T back in the day) in Canada and has branched out over the years - they offer internet, satellite TV, wireless, and other services and own a media content provider (CTV). BCE trades on both the TSE and NYSE and currently offers a 5.7% yield.

Transcanada Pipeline (TRP), which recently changed its name to TC energy, owns and operates oil and gas pipelines in the US and Canada. TRP trades on both the TSE and NYSE and currently offers a 5.5% yield.

I also wanted to mention a few other Canadian companies with good yields. These may not be dividend kings, but they are fairly stable, and offer good divdends. Telus (T on TSE and TU on NYSE), a wireless telecom operator in Western Canada, offers a 5% yield. Suncor Energy (SU), an oil & gas company operating in the US and Canada, offers a 4.6% yield. Algonquin Power (AQN) is an electricity utility provider in the US and Canada that currently offers a 10% yield.

Full disclosure: I have owned all of these stocks at one time or another and currently own some of the banks and energy companies. Please do your own due diligence prior to investing.

Edited November 30, 2022 by Shiv Naimpally

[Abdul Shaikh]

Thanks Shiv,

They are all good I have traded them or have them.

I mostly invest 50% to 60% in dividend stocks.

and leave them for until they are green and sell them and buy again when they go down.

QSR  & CNQ are also good one.

Thanks again keep in touch and your advice is appreciated.

Abdul Shaikh

[Sabo Ilkan]

Do you sell covered calls against your long term holdings? 

The premiums for these tickers are consistently very low on Canadian exchanges compared to the US exchanges. I wonder why??