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A customer enters a Couche-Tard, in Montreal, on Sept. 4, 2019.

Andrej Ivanov/The Globe and Mail

Investing doesn’t come with guarantees. The market may crash any day. A new trade war could erupt at any time. Interest rates can only go up, and a recession is overdue.

Still, one type of investment that’s supposed to be predictable and rock-solid is blue-chip stocks. These are companies that are so dominant, profitable and well-managed that they’re a good bet this year, next year and beyond. Which Canadian blue chips could serve as the foundation of any portfolio heading into the 2020s?

Brian Belski, managing director and chief investment strategist at BMO Capital Markets in New York and Toronto, says to start by zeroing in on large, well-established companies for which “the majority of their incremental or operational growth comes from the United States.”

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A decade ago, Mr. Belski adopted a thesis that we’re enjoying a 20-year bull market for U.S. stocks, driven by an expansive U.S. economy. That puts us at the start of the second half of that bull run. One way for Canadian investors to play it is via companies that do a lot of business south of the border.

If you’re looking at the Big Five banks, Mr. Belski says that immediately whittles down the list to three: Royal Bank of Canada (RY-T), Toronto-Dominion Bank (TD-T) and Bank of Montreal (BMO-T). “The majority of their operational revenue is going to be coming from the U.S. the next 10 years,” he says.

Mr. Belski’s list includes both of the country’s railroad operators, Canadian National Railway Co. (CNR-T) and Canadian Pacific Railway Ltd. (CP-T). Other stocks that he feels will do well, if the U.S. economy continues to perform strongly, are pipeline company Enbridge Inc. (ENB-T), power company Boralex Inc. (BLX-T) and global infrastructure firm Brookfield Infrastructure Partners LP (BIP-UN-T).

As for consumer goods manufacturers and retailers, Mr. Belski cites cheese maker Saputo Inc. (SAP-T), which has been on a U.S. acquisition spree, Alimentation Couche-Tard (ATD-B-T), the second-largest convenience store operator in the world, Dollarama Inc. (DOL-T), Canadian Tire Corp. Ltd. (CTC-T), Aritzia Inc. (ATZ-T) and Canada Goose Holdings Inc. (GOOS-T).

Rounding out the list of blue-chips he’s high on are telecommunications companies Rogers Communications Inc. (RCI-B-T) and BCE Inc. (BCE-T) as well as a lesser-known name: Waste Connections Inc. (WCN-T), a solid-waste collection and disposal company with extensive operations in the U.S. and Canada. The company is “a good example of a company that you can put away for the next 10 years as the U.S. continues to chug along,” Mr. Belski.

But for some investors, the memories of the market crash and painful recession of 2008 and 2009 are still fresh even after a decade. Despite strong employment numbers in both the U.S. and Canada, plenty of investors still believe another downturn is just around the corner.

“This has been the most hated bull market in history, climbing the wall of worry. The investment world has been trying to diagnose the demise of the current bull market since the day it started,” says Mr. Belski, who remains firm on his 20-year bullish outlook.

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Although Mr. Belski uses U.S. exposure as one lens, Ryan Bushell, president and portfolio manager at Newhaven Asset Management Inc. in Toronto, prefers companies that are consistent dividend payers.

That’s because dividend-paying stocks have filled part of the role that bonds held back when interest rates were much higher than today, he says.

Mr. Bushell has two of the same companies on his long-term blue-chip list that Mr. Belski has: TD and Enbridge. He likes TD for its hefty dividend and pattern of raising its dividend payout to investors aggressively. “TD is my favorite of the [bank] group, especially at these prices,” he says.

On the energy front, Mr. Bushell says Canadian Natural Resources Ltd. (CNQ-N) is a standout. They’ve increased their dividend 19 straight years and are also cash rich. He says capital is coming in that’s well in excess of what’s going to investors in dividends. “That is extra cash that they are going to be paying down debt and buying back stock with, and I think it is just a really well-run company.”

Mr. Bushell’s other bets in energy infrastructure are TC Energy Corp. (TRP-T), formerly TransCanada Corp., and Pembina Pipeline Ltd. (PPL-T), the buyer of Kinder Morgan Inc. assets.

He likes that Pembina is in a major infrastructure buildout, one that includes a liquified petroleum gas terminal in Prince Rupert, B.C, a proposed liquified natural gas export terminal in Oregon and construction of a jointly-owned plant in Alberta to turn propane into plastic feedstock.

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Pembina also owns a pipeline system that could be reversed to export crude oil into the U.S. from Canada. Pembina yields a dividend of 5.25 per cent, and Mr. Bushell expects more dividend hikes in the future.

A lesser-known dividend star for Bushell is St. John’s, Nfld.-based power company Fortis Inc. (FTS-T), which has grown its dividend payout steadily over decades.

“If [Fortis] can grow that dividend every year, even by 5 per cent a year for the next 10 years, the dividend will be 1.65 times what it is today,” Mr. Bushell estimates. “That, for me, is a forever stock. It’s focused on changes in the electricity grid and renewables. This is a company that has its head up and is going to continue to be sustainable.”

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