3 Canadian Blue-Chip Stocks to Buy Before the Next Rally

Written by Amy Legate-Wolfe at The Motley Fool Canada

Blue-chip stocks tend to shine before the next rally when they bring a mix of size, stability, and enough growth to keep investors interested once sentiment improves. The best ones usually have durable businesses, strong balance sheets, and dividends or cash flow that can carry them through dull stretches. In other words, investors should look for names that can defend capital when markets wobble and still have room to run when confidence comes back.

BMO

Bank of Montreal (TSX:BMO) is one of Canada’s largest banks, with big operations in personal banking, capital markets, wealth management, and a growing U.S. presence. Over the last year, that U.S. angle stayed front and centre. In March, Reuters reported that BMO stock planned to open more than 130 new financial centres in California and about 15 in Arizona over the next five years, showing that management still sees real runway south of the border.

The earnings story stayed solid. In first-quarter 2026 results, adjusted net income rose to $2.55 billion from $2.29 billion a year earlier, while adjusted earnings per share (EPS) climbed to $3.48 from $3.04. Furthermore, BMO stock beat profit estimates as credit conditions improved, which helped confirm that the core banking story still looks healthy. At about 17.3 times trailing earnings at writing, the stock is not dirt cheap. However, it still looks reasonable for a big bank with dividend support and more upside if the next rally broadens out.

SLF

Sun Life (TSX:SLF) is a diversified insurer and asset manager with operations in Canada, the U.S., Asia, and global alternatives. Over the last year, the company dealt with a setback in U.S. dental tied to Medicaid uncertainty, but it also kept building out its asset management arm. In late March, Sun Life completed the purchases of the remaining stakes in BGO and Crescent Capital, strengthening its position in alternatives and making the business a little less dependent on plain insurance growth alone.

Its latest numbers looked strong enough to keep the case intact. In fourth-quarter 2025 results, underlying net income reached $1.09 billion, up from $965 million, while underlying EPS rose to $1.96 from $1.68. For full-year 2025, underlying net income climbed 9% to $4.20 billion, and underlying EPS rose to $7.45 from $6.66. The stock trades at about 15.7 times trailing earnings at writing, which feels fair for a business with improving asset-management scale, strong capital, and a dividend that still adds to total return.