10 of the Best Blue Chip Canadian Stocks to Buy in February 2025

Key takeaways

Stability and Long-Term Growth: Canadian blue-chip stocks like RBC, CN Rail, and TC Energy offer strong financial stability, making them reliable choices for long-term investors.

Diversification Across Sectors: These top companies span banking, infrastructure, real estate, and technology, allowing investors to gain exposure to multiple industries with proven business models.

Reliable Dividend Income: Many blue-chip stocks, including TC Energy and CAPREIT, provide consistent dividends, making them attractive for income-focused investors seeking steady returns.

3 stocks I like better than the ones on this list.

“blue-chip” stock is often a well-established company that has been financially sound for decades. This differs from growth stocks, as an investment in them often depends on the company’s growth potential, not its previous results and can have extensive price swings over the long term.

Did you know that the term blue chip, when it comes to the stock market, is derived from the game of poker? 

Typically, blue chips held the highest value and, as such, were the most important to keep in your stack.

A common misconception with blue-chip stocks

Investors frequently associate blue-chip Canadian stocks with the top Canadian dividend stocks. However, this connection is not always accurate.

Many of the best blue-chip stocks in the country either pay a small dividend or no dividend at all. So, if you’re looking for blue-chips in Canada and you’ve isolated your shortlist out to income payers, you are likely missing out on some of the best performing stocks in the country over the last decade.

In this article, I’m going to go over some of the top blue-chips in Canada with a strict focus on company quality, not dividends. Is a well-covered dividend taken into consideration? Absolutely. After all, dividends do make up a portion of total return.

Lets get right into the list. Of note, this list is in no particular order.

Global leader in alternative asset management

Brookfield Corporation (TSX:BN)

Brookfield Corporation is a powerhouse in asset management, overseeing investments across real estate, infrastructure, renewable energy, and private equity. With operations spanning the globe, Brookfield generates stable cash flows through long-term contracts and fee-based revenue. The company also owns a stake in Brookfield Asset Management (BAM), its publicly traded asset management arm.

P/E: 129.8

5 Yr Revenue Growth: 11.1%

5 Yr Earnings Growth: -23.1%

5 Yr Dividend Growth: -6.9%

Yield: 0.5%

  • Diversified across multiple asset classes and geographies.
  • Strong cash flow from real estate, infrastructure, and renewables.
  • Growing private equity business provides high-margin opportunities.
  • Long-term contracts ensure revenue stability, even in downturns.
  • Well-positioned to benefit from global infrastructure and energy transitions.
  • Strong track record of shareholder returns through dividends and asset appreciation.
  • Infrastructure Spending: Rising global investments in infrastructure will boost Brookfield’s assets under management.
  • Renewable Energy Expansion: Brookfield is increasing its exposure to renewables, aligning with global energy transitions.
  • Private Equity Growth: Expansion into private equity provides higher-margin revenue streams.
  • Rising Interest Rates: Higher rates impact asset valuations, but Brookfield’s long-term contracts provide stability.
  • Market Volatility: Economic downturns can impact asset valuations.
  • Interest Rate Sensitivity: Higher borrowing costs may slow acquisitions.
  • Regulatory Changes: Shifts in investment regulations could impact private equity and infrastructure deals.
  • Currency Exposure: International operations expose Brookfield to foreign exchange risks.

Leading North American railway with international reach

Canadian Pacific Kansas City (TSX:CP)

CPKC is a top-tier railway company connecting Canada, the U.S., and Mexico, providing efficient transportation for commodities, energy products, and consumer goods. The 2023 acquisition of Kansas City Southern made CP the first railway spanning all three North American countries, enhancing trade and freight efficiency.

P/E: 28.6

5 Yr Revenue Growth: 10.5%

5 Yr Earnings Growth: 8.2%

5 Yr Dividend Growth: 7.7%

Yield: 0.7%

  • Only railway with a direct Canada-U.S.-Mexico network.
  • Benefits from increasing cross-border trade and supply chain optimization.
  • Long-term contracts ensure revenue stability.
  • Strong dividend history with room for future growth.
  • Low-cost transportation alternative amid rising fuel prices.
  • High barriers to entry, ensuring a strong competitive position.
  • Trade Growth: Increasing North American trade benefits CPKC’s expanded network.
  • Fuel Cost Impact: Rail remains a cost-effective alternative to trucking, boosting demand.
  • Infrastructure Investment: Continued railway upgrades improve efficiency and margins.
  • Automation and Efficiency Gains: New technologies enhance railway operations and profitability.
  • Economic Sensitivity: Freight volumes fluctuate with economic cycles.
  • Regulatory Risk: Rail safety and trade regulations could impact operations.
  • Integration Challenges: Merging Kansas City Southern operations could present hurdles.
  • Weather Disruptions: Extreme weather events can impact railway efficiency.

E-commerce technology leader

Shopify (TSX:SHOP)

Shopify provides cloud-based e-commerce solutions for businesses of all sizes, helping them set up and manage online stores. It has become one of the most important global e-commerce infrastructure players, providing payment processing, logistics, and marketing solutions.

P/E: 105.6

5 Yr Revenue Growth: 46.9%

5 Yr Earnings Growth: -%

5 Yr Dividend Growth: -%

Yield: -%

  • Leading platform for e-commerce businesses worldwide.
  • High-margin, recurring revenue from SaaS-based subscriptions.
  • Strong ecosystem with third-party apps and services.
  • Expanding into international markets and enterprise-level merchants.
  • Positioned to benefit from continued e-commerce growth.
  • Investments in AI and logistics enhance scalability and profitability.
  • E-Commerce Adoption: Growth in online shopping supports Shopify’s expansion.
  • International Growth: Shopify is expanding into new global markets.
  • AI and Automation: Increased investment in AI enhances its offerings and competitiveness.
  • Logistics Partnerships: Shopify is improving fulfillment capabilities for merchants.
  • Market Competition: Competes with Amazon, WooCommerce, and other platforms.
  • Macroeconomic Conditions: Economic slowdowns can impact merchant spending.
  • Profitability Concerns: Expansion efforts may pressure margins.
  • Tech Valuation Volatility: High-growth tech stocks can experience significant price swings.

Leading Canadian grocery and pharmacy retailer

Metro (TSX:MRU)

Metro is one of Canada’s largest grocery and pharmacy chains, operating under brands like Metro, Super C, and Jean Coutu. With a defensive business model, Metro provides consistent revenue and cash flow, even during economic downturns.

P/E: 22.3

5 Yr Revenue Growth: 4.8%

5 Yr Earnings Growth: 8.1%

5 Yr Dividend Growth: 10.9%

Yield: 1.5%

  • Defensive stock with steady demand for groceries and pharmaceuticals.
  • Strong market position in Quebec and Ontario.
  • Dividend growth history with a low payout ratio, ensuring sustainability.
  • Increasing private-label offerings enhance margins.
  • Pharmacy expansion provides additional revenue streams.
  • Efficient supply chain and cost controls drive profitability.
  • Grocery Inflation: Rising food prices impact consumer behavior and margins.
  • Pharmacy Growth: Expanding healthcare services boost long-term revenue.
  • E-Commerce Expansion: Online grocery and pharmacy sales are growing.
  • Private Label Strength: Higher-margin private-label products are increasing profitability.
  • Competition: Faces pressure from Loblaw and Sobeys.
  • Rising Costs: Inflation could impact input costs and consumer spending.
  • Regulatory Risk: Changing healthcare regulations could impact pharmacy operations.
  • Supply Chain Disruptions: Global disruptions could impact product availability.

Leading North American utility company

Fortis (TSX:FTS)

Fortis is a top utility provider in Canada and the U.S., supplying electricity and natural gas to millions of customers. With a focus on long-term regulated assets, Fortis generates stable cash flow and is a top choice for dividend investors.

P/E: 17.9

5 Yr Revenue Growth: 5.7%

5 Yr Earnings Growth: 2.8%

5 Yr Dividend Growth: 4.9%

Yield: 4.1%

  • Regulated utilities provide stable, recession-resistant cash flows.
  • Dividend aristocrat with a 50-year history of increases.
  • Expansion into renewable energy enhances long-term sustainability.
  • Strong capital investment plan ensures continued growth.
  • Geographic diversification reduces regional risks.
  • Inflation-protected rate structures ensure profitability.
  • Renewable Energy Investments: Fortis is expanding into clean energy.
  • Dividend Growth: Investors expect continued increases.
  • Regulatory Approvals: Rate approvals impact revenue stability.
  • Infrastructure Investments: Ongoing upgrades improve service and efficiency.
  • Interest Rate Sensitivity: Higher rates increase financing costs.
  • Regulatory Risks: Policy changes could impact allowed rate hikes.
  • Extreme Weather Events: Storm damage can affect operations.
  • Capital Expenditure Needs: Significant investments are required for growth.

Canada’s largest bank by market capitalization

Royal Bank of Canada (TSX:RY)

Royal Bank of Canada (RBC) is Canada’s largest and most valuable bank, offering a full range of financial services, including retail and commercial banking, wealth management, insurance, and capital markets. With operations in over 30 countries, RBC is a global financial powerhouse, known for its stability, strong profitability, and consistent dividend payments.

P/E: 14.8

5 Yr Revenue Growth: 4.2%

5 Yr Earnings Growth: 4.7%

5 Yr Dividend Growth: 6.1%

Yield: 3.3%

  • Largest Canadian bank with a strong presence in global markets.
  • Reliable dividend payer with a current yield of ~4%, backed by consistent earnings growth.
  • Diversified revenue streams across banking, wealth management, and capital markets.
  • Well-capitalized and resilient, even during economic downturns.
  • Expanding into U.S. and international markets for further growth.
  • Strong investments in digital banking, improving customer engagement and efficiency.
  • Global Expansion: RBC continues to grow its U.S. and international operations.
  • Wealth Management Growth: Increased demand for investment and financial advisory services is boosting revenues.
  • Interest Rate Impact: Rising interest rates can improve profit margins but may also increase loan defaults.
  • Digital Transformation: RBC’s focus on AI and digital banking enhances efficiency and competitiveness.
  • Economic Downturns: Recessions could impact loan growth and credit quality.
  • Housing Market Exposure: A slowdown in the housing market could affect RBC’s mortgage portfolio.
  • Regulatory Risks: Banking regulations could impact profitability and lending activity.
  • Market Sensitivity: RBC’s capital markets division is exposed to stock market fluctuations.

Leading North American freight railway operator

Canadian National Railway (TSX:CNR)

Canadian National Railway (CN Rail) operates one of North America’s largest freight rail networks, spanning Canada and the U.S. The company plays a crucial role in transporting goods, including energy, agriculture, and consumer products. CN’s efficient railway operations make it a key player in North American supply chains.

P/E: 17.9

5 Yr Revenue Growth: 3.3%

5 Yr Earnings Growth: 7.8%

5 Yr Dividend Growth: 11.7%

Yield: 2.2%

  • Essential to North America’s trade and supply chains, ensuring steady demand.
  • Wide economic moat with high barriers to entry for competitors.
  • Strong pricing power and cost efficiency drive profitability.
  • Dividend growth stock with a long history of returning capital to shareholders.
  • Focus on automation and technology to improve efficiency.
  • Expansion into U.S. markets provides additional growth opportunities.
  • Supply Chain Recovery: CN Rail benefits from the normalization of supply chains post-pandemic.
  • Energy and Agriculture Demand: Growth in oil, grain, and consumer goods transport supports revenues.
  • Technology Investments: AI and automation improve railway efficiency and reduce costs.
  • Economic Cycles: Freight demand is closely tied to industrial activity and economic growth.
  • Economic Sensitivity: A slowdown in trade or manufacturing could reduce freight volumes.
  • Regulatory Challenges: Railway safety and emissions regulations could increase costs.
  • Weather Disruptions: Harsh winters or natural disasters can impact operations.
  • Labor Relations: Strikes or labor disputes could affect service levels and profitability.

Global leader in acquiring and managing software businesses

Constellation Software (TSX:CSU)

Constellation Software is a Canadian tech giant specializing in acquiring and operating niche software businesses across various industries. Rather than developing its own software, Constellation focuses on acquiring and optimizing existing businesses, ensuring steady revenue growth and strong cash flow generation.

P/E: 122.9

5 Yr Revenue Growth: 23.4%

5 Yr Earnings Growth: 9.2%

5 Yr Dividend Growth: 15.8%

Yield: 0.1%

  • Proven track record of acquiring and scaling profitable software companies.
  • High-margin business model with strong recurring revenue streams.
  • Diversified across industries, reducing dependence on any single sector.
  • Long-term focus on capital allocation and disciplined growth.
  • Strong return on investment from acquired businesses.
  • Attractive for growth-oriented investors seeking exposure to tech without excessive volatility.
  • Acquisition Strategy: CSU’s ability to acquire and integrate new businesses is its primary growth driver.
  • Recurring Revenue Growth: High renewal rates in enterprise software ensure revenue stability.
  • Global Expansion: The company is expanding its acquisition strategy internationally.
  • Tech Valuations: Software sector trends can impact acquisition pricing and investment returns.
  • Acquisition Execution: Poorly integrated acquisitions could affect profitability.
  • Valuation Risks: The stock trades at a premium, making it sensitive to market corrections.
  • Competitive Pressures: Larger software firms may challenge CSU’s market position.
  • Economic Slowdowns: Reduced IT spending could impact software purchases and renewals.

Major North American pipeline and energy infrastructure company

TC Energy (TSX:TRP)

TC Energy owns and operates extensive oil and natural gas pipeline networks across Canada, the U.S., and Mexico. The company also has a growing focus on power generation and energy storage solutions. With stable cash flows from long-term contracts, TC Energy is a favorite among income-focused investors.

P/E: 13.9

5 Yr Revenue Growth: 3.1%

5 Yr Earnings Growth: -6.8%

5 Yr Dividend Growth: 6.2%

Yield: 5.4%

  • Essential infrastructure for North America’s energy transport.
  • Long-term contracts provide predictable cash flow.
  • High-yield dividend (~7%) with a history of consistent increases.
  • Expansion into renewable energy projects for long-term sustainability.
  • Growing demand for natural gas supports future pipeline growth.
  • Resilient business model less affected by oil price volatility.
  • Energy Transition: Increasing investments in renewables and carbon capture.
  • Natural Gas Growth: Rising LNG exports support long-term pipeline demand.
  • Dividend Stability: Investors should monitor dividend growth and payout ratios.
  • Pipeline Expansions: Key projects like Coastal GasLink impact future revenues.
  • Regulatory Uncertainty: Pipeline approvals face political and environmental scrutiny.
  • Debt Load: Capital-intensive projects require significant financing.
  • Commodity Exposure: While insulated, pipeline demand depends on energy markets.
  • Interest Rate Sensitivity: Rising rates increase borrowing costs for infrastructure projects.

Canada’s largest residential real estate investment trust (REIT)

Canadian Apartment Properties REIT (TSX:CAR.UN)

Canadian Apartment Properties REIT (CAPREIT) owns and manages a diverse portfolio of rental properties, including apartments, townhomes, and manufactured housing communities across Canada and parts of Europe. With rising rental demand and a supply shortage, CAPREIT benefits from stable occupancy and consistent cash flow.

P/E: 19.4

5 Yr Revenue Growth: 9.1%

5 Yr Earnings Growth: -%

5 Yr Dividend Growth: 2.1%

Yield: 3.7%

  • Strong demand for rental housing due to affordability challenges in homeownership.
  • Large, diversified portfolio across Canada and select European markets.
  • Steady dividend income with a yield of ~3%.
  • Proven ability to raise rents in strong rental markets.
  • Defensive asset class providing stability during economic downturns.
  • Increasing property values and long-term appreciation potential.
  • Rental Market Strength: Rising demand for apartments supports revenue growth.
  • Housing Affordability Crisis: More people renting due to high home prices benefits CAPREIT.
  • Interest Rate Impact: Higher rates increase borrowing costs but also raise rental demand.
  • Urbanization Trends: Continued population growth in major cities fuels demand for rental properties.
  • Interest Rate Sensitivity: Higher rates impact CAPREIT’s debt financing.
  • Government Regulations: Rent control policies could limit revenue growth.
  • Economic Slowdowns: A recession could impact rental demand in some markets.
  • Property Maintenance Costs: Rising costs for renovations and upkeep can affect profitability.

What are Canadian blue chip stocks?

My definition of a blue chip stock is that it has a large market capitalization and is a top company in its industry.

Typically, I look for high-quality stocks that are within the top two in terms of performance in the sector, but industries like Canadian banking can have many stocks I consider blue chip even if they aren’t a front runner.

In this article, I have tried to focus one one or two companies from a particular sector, max. This way, this list doesn’t get filled with Canadian bank stocks and oil producers.

Blue chip stocks are often the backbone of an investor’s portfolio and are held for the long term. The majority of my blue-chip investments are made with the mentality to simply buy and never sell.

Obviously this is dependent on the overall investment thesis of the blue-chip stock being maintained. However, because these companies have provided such stable operations for decades and have such wide economic moats, the underlying thesis of these companies rarely changes.

Investors, especially those just learning how to buy stocks in Canada, should make high-quality blue-chip stocks their primary focus.

They provide long-term stability and usually (but not always, like I stated above) an excellent dividend.

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