I've said it before, and I was wrong, but I'm going to say it again, and this time I think I may be right. The worst is over! The shock of President Biden's cancellation of the Keystone XL pipeline project is fading and the cost overruns of the Coastal GasLink pipeline in British Columbia are beginning to seem manageable.
As the dust settles from the sale of a 40% interest in its U.S. Columbia gas pipeline system the positive aspects of the sale are becoming clear. Also it was announced around the same time that TC Energy was spinning off its oil pipeline business in order to accent its core natural-gas operations. This news was unexpected and the market doesn't like surprises and let that fact be known.
The dividend today is 7.71%. This is big enough to attract investor interest even in the present rising interest rate environment. TC Energy is a classic pays-investors-to-hold play. Heck, one can get rich while waiting out the present pullback in stock price to end.
The yield paid by TC Energy may be exceedingly high but the annual $3.72 dividend appears to be not only safe but, going by the company's own projections, the dividend may grow from three to five percent annually into 2026. The TC Energy stock may have lost value but it is not the only pipeline business to be hurting at this time. Think Pembina or Enbridge. They, too, are well off their highs.
There are lots of signs that the pessimism surrounding TC Energy, and the other pipeline operators, is overdone. If you bought high and now have ridden out the worst of this economic storm, it may soon be time to be rewarded for your patience. I'm in that boat and I'm continuing to hold.
If you recently bought some TC Energy, you may have already realized a small but nice profit. I am in that boat as well. I have been both a buyer and a holder of TRP and I take joy from being in both camps. I see a tidy profit in the coming months from holding TRP. I would not be surprised to see it hit $55 or even $60 or more in the coming years.
