Written by Ambrose O'Callaghan at The Motley Fool Canada
The S&P/TSX Composite Index has encountered turbulence in the second half of August 2023. Indeed, the TSX Index followed up a triple-digit gain on Wednesday with a triple-digit retreat on Thursday, August 24. Inflation ticked up again in July, spurring experts and analysts to warn of tough sledding ahead.
In this environment, Canadian investors may want to turn to blue-chip stocks. A blue-chip stock is a security in a company that possesses elite qualities. For example, a company that is an industry leader, that boasts a proven track record, has a strong history of positive returns, and pays a reliable dividend to its shareholders. Today, I want to target three blue-chip stocks that can provide some safety and dependability in the late summer season.
Why this top bank is a blue-chip stock you can trust
Bank of Montreal (TSX:BMO) is the third largest of the Big Six Canadian banks. Shares of this top bank stock have dropped 8.5% month over month as of close on Thursday, August 24. The blue-chip stock is now down 9.5% so far in 2023. Investors who want to see more of its recent performance can play with the interactive price chart below.
This bank is set to release its third-quarter (Q3) fiscal 2023 earnings before markets open on Tuesday, August 29. In Q2 2023, BMO reported adjusted net income of $2.21 billion — up from $2.18 billion in Q2 2022. Earnings were negatively impacted by a spike in provisions set aside for credit losses. Like its peers, BMO benefited from improved net interest income in this rate-tightening climate.
Shares of this blue-chip stock currently possess a favourable price-to-earnings (P/E) ratio of 11. Moreover, the bank offers a quarterly dividend of $1.47 per share. That represents a strong 5.2% yield.
Don’t sleep on this energy beast in 2023
Enbridge (TSX:ENB) is the second blue-chip stock I’d look to snatch up in late August. This is the largest energy infrastructure company in North America. It also boasts a huge project pipeline that should pique investor interest in stashing this stock for the long term. Enbridge stock has declined 12% in the year-to-date period at the time of this writing.
In Q2 2023, Enbridge reported adjusted earnings of $1.4 billion, or $0.68 per common share. That was mostly flat in the year-over-year period. Meanwhile, distributable cash flow (DCF) increased 1% to $2.8 billion. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to give a clearer picture of a company’s profitability. Enbridge posted adjusted EBITDA of $4.0 billion in Q2 — up 8% compared to the prior year.
This blue-chip stock last had a solid P/E ratio of 24. Moreover, Enbridge offers a quarterly distribution of $0.887 per share, which represents a very tasty 7.6% yield. The company has delivered over 25 consecutive years of dividend growth, making Enbridge one of the elite Dividend Aristocrats on the TSX.
One more safe blue-chip stock I’d buy in August
Rogers Communications (TSX:RCI.B) is the third and final blue-chip stock I’d look to snatch up today. This top telecommunication stock just got even bigger with the $26 billion merger with Shaw. Shares of this blue-chip stock have plunged 15% so far in 2023.
The company unveiled its Q2 fiscal 2023 earnings on July 26. Rogers reported total revenue of $5.04 billion — up 30% compared to $3.86 billion in total revenue in Q2 2022. Moreover, adjusted EBITDA climbed 38% to $2.19 billion. It reported adjusted net income of $544 million or $1.02 per diluted share — up 17% and 19%, respectively, compared to the previous year.
Shares of this blue-chip stock currently possess an attractive P/E ratio of 18. Moreover, Rogers offers a quarterly dividend of $0.50 per share, representing a 3.7% yield.
Before you consider Bank of Montreal, you'll want to hear this.
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