Cole Kachur TC Energy TRP-T HOLD Oct 03, 2024

This is the one he likes in the space. Part of its business is very utility-like. Steady dividend, which will rise over time. Dividend also looks attractive in the face of an economic slowdown when interest rates would fall. Hold for the long haul.

More pipeline builds would certainly be an opportunity for growth for this name, but that's not why he owns it.

It oversold for a while and is not a fast growing company but data centres need gas to provide their demands for electricity. Pipelines are good for recession and TRP is up 4% since Feb.19.

Great run second half last year, has gone sideways since then. Now breaking out above $68, which is quite positive. It's had lots of time to digest and consolidate.

Defensive. Pays a 4.8% dividend. Natural gas demand will endure. No tariff worries. Data centres need power, and he doubts tariffs will impact Canadian energy supply.

Catalyst was spinoff of South Bow oil pipelines, so remaining energy would be "clean". 

Defensive assets are garnering less and less of a bid as people become more comfortable with economic risk. Used this name as a source of cash to add more beta to portfolios. Great company, but relative price performance has started to back off for the pipelines group. Pipelines carry a lot of debt, and financing costs could get more expensive if long-term yields stay high.

He owned it for a while. Had a big run-up last year but thinks it is pretty much done now with a lot of insider selling. Tends to have big swings.

All these companies carry heavy debt. Once slip up and their cash flow is in trouble. He prefers companies with high cash flow and low capex, like Apple and Meta. Not for him, but if interest rates continue to fall in Canada, dividend stocks like this could look stable and attractive. Pays a good 4.7% dividend.

Not adding now because it's run up so much. Likes that its growth is now from smaller projects that are more likely to go through with minimal regulatory issues. Still a forever hold.

TRP P/E at 19X compares with its 10-year range of 12 to 19x so it is certainly on the high end of the range. EPS growth as noted is not going to be spectacular. The stock is trading for its yield of 4.74% and its safety going into a possible recession. Business is historically stable and the tax-adjusted yield is certainly attractive vs fixed-income alternatives. We are comfortable with it, but more as an income security and would not expect big gains here. It's up 33% in the past year and we doubt that rate is sustainable, certainly. The debt is nothing new of course, and common for the sector. Lower rates will help here. It has 13 BUYS, 10 HOLDS and 3 SELLS. Avg. target price $73.37. We would consider it 'buyable' slightly lower. Our main comment here references the 'riskier' note in the question. IF we head into a period of weakness, we would prefer to own TRP over dozens of other.
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