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Canadian Blue-Chip Stocks: The Best of the Best for November 2023

Various Canadian dollars in gray pants pocket
Image source: Getty Images

Written by Amy Legate-Wolfe at The Motley Fool Canada

It’s been a really hard few months, even years, for Canadian investors. And it doesn’t seem to be letting up anytime soon. We have no idea when the market will improve, but mark my words: it will!

Over time, the market goes up. It’s a fact we’ve seen for hundreds of years now. But if you’re looking for protection, blue-chip stocks are the ones to go with.

What are blue-chip stocks

Blue-chip stocks are the best of the best in their industry. They’re companies that have been on the market for decades, accumulating growth that cannot be undone overnight. These companies are the household names that you’ve come to know, even if you’re not an investor.

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Moreover, during market downturns, blue-chip stocks tend to offer immense value. That’s because it’s almost guaranteed that these stocks will climb back to 52-week highs quickly. That’s because they have trust on their side.

Investors have invested in these companies for years and years. So, when the market shows signs of improvement, they tend to be the ones that investors go back to quickly. Yet, where should you invest if you’re looking for the best of the best?

Go big or go home

If you’re looking for the best of the best in blue-chip companies, then I would consider Canadian banks above all else. They offer the most value, with the best history of being able to reach 52-week highs once more. Plus, consider the dividends!

The reason Canadian banks are so safe is that these blue-chip stocks are far more stable than their American counterparts. Canadian banks have been around for mainly over 100 years, yet there’s an oligopoly here that doesn’t exist down south.

Whereas America has a lot more competition, here in Canada, we mainly have the Big Six banks. That lower competition means more cash on hand for loan losses. These provisions keep the banks safe, allowing for a quick recovery when the market bounces back.

The ones I’d go for

If you’re looking to choose Canadian banks, the ones I would go for are the safest options. This would include Toronto-Dominion Bank (TSX:TD), Royal Bank of Canada (TSX:RY), and Bank of Montreal (TSX:BMO).

TD stock has growth on its side from huge exposure in the United States. This can make losses large for now, but, as America bounces back far quicker than other countries, there is exposure to this as well. Shares also trade at just 10.77 times earnings as of writing, with a 4.97% dividend yield to boot.

Royal Bank stock is the biggest of the banks, offering investors security through its investments in wealth and commercial management. We’re still waiting to see about the acquisition of another Canadian bank, but this could offer more growth in the future as well. It trades at just 10.66 times earnings, with a 4.9% dividend yield.

Finally, BMO stock may have the best growth opportunity as potentially the last Canadian bank to be able to make a major purchase in the United States. The country has barred large foreign purchases, and this has meant BMO stock just managed to sneak in there with the purchase of Bank of the West. It trades at 10.34 times earnings, with a 5.63% dividend yield as of writing.

So, if you’re looking for safety and income, these are certainly the best blue-chip companies to buy next month.

The post Canadian Blue-Chip Stocks: The Best of the Best for November 2023 appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Bank of Montreal?

Before you consider Bank of Montreal, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in October 2023... and Bank of Montreal wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 25 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 10/10/23

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Fool contributor Amy Legate-Wolfe has positions in Royal Bank Of Canada and Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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