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Investing in blue-chip stocks provides stability, income, and growth. These stocks are backed by well-established and financially strong companies with large market capitalizations. These companies have stood the test of time, proving their ability to generate stable revenue and deliver solid returns to investors through capital appreciation, dividends, and share buybacks. These attributes make them solid long-term investments.
Moreover, investing in these stocks through a Tax-Free Savings Account (TFSA) can further enhance investment returns by allowing tax-free gains and dividend income.
So, if you have got $7,000 (the TFSA contribution limit for 2025), here are five blue-chip stocks to consider.
Blue-chip stock #1
Fortis (TSX:FTS) is one of the top blue-chip stocks to buy now. This Canadian electric utility company’s diversified regulated assets enable it to generate low-risk earnings and predictable cash flows regardless of market conditions. Fortis rewards its shareholders with higher dividends thanks to its resilient and growing earnings.
It has raised quarterly distributions for 51 consecutive years and offers a secure yield of 3.8%.
Fortis’ $26 billion capital plan will enable it to expand its rate base at a compound annual growth rate (CAGR) of 6.5% through 2029. This will likely help the company to generate low-risk earnings, driving higher dividends. Fortis’s management expects to grow its dividends by 4–6% annually through 2029 and is poised to deliver decent total returns in the long term.
Blue-chip stock #2
Canadian National Railway (TSX:CNR) is a leading blue-chip stock worth considering. With an extensive rail network, it plays a vital role in Canada’s supply chain. The railway’s resilience amid economic uncertainty and commitment to returning value to shareholders makes it an attractive investment.
Canadian National Railway has increased its dividend for 29 consecutive years and offers a yield exceeding 2.5%. CNR’s strategic rail network expansion, exposure to diversified sectors, and focus on operational efficiency position it for strong earnings growth and consistent dividend increases. Moreover, its strong financials will lead to decent capital gains.
Blue-chip stock #3
Royal Bank of Canada (TSX:RY) is a dependable blue-chip stock known for its durable earnings growth rate and focus on rewarding its shareholders with higher dividend payments. Over the past decade, shares of this financial services giant have gained more than 212%, delivering above-annualized growth of over 12%. During this time, the bank has consistently increased its dividends, providing strong total returns for investors.
Canada’s largest bank is well-positioned to deliver significant total returns, driven by its diversified customer base, operational efficiency, and consistent earnings growth. Its expanding loan portfolio, strong deposit base, improving efficiency ratio, and solid balance sheet will drive future profitability, the share price, and dividend payouts.
Blue-chip stock #4
Loblaw (TSX:L) could be a solid addition to your portfolio for steady stability, growth, and income. This food and pharmacy giant operates a defensive business model, witnesses steady demand in all economic cycles, and delivers consistent earnings growth, supporting its stock price, dividend payments, and share buybacks.
The retailer is poised to benefit from its wide product range and value pricing strategy. The expansion of its hard discount stores points to more growth ahead. The company is also strengthening its omnichannel offerings and expanding the penetration of its high-margin private-label brands. Further, its focus on modernizing and automating the supply chain will support its long-term growth.
Blue-chip stock #5
TFSA investors seeking blue-chip stocks could add Brookfield Asset Management (TSX:BAM) to their portfolios. This asset management company is well-positioned to deliver multi-year growth, led by its exposure to fast-growing areas such as green energy, artificial intelligence (AI) infrastructure, and nuclear power.
The company’s asset-light model, focus on high-quality investments, consolidation of the credit division, and growing fee-bearing capital augur well for growth. Further, its high payout ratio implies that it will distribute a significant portion of its earnings to enhance shareholder value through dividends.
