TC Energy (TRP.TO)

Likes pipelines for income, though they've pulled back with the pullback in commodities. Lagged the group. When Coastal GasLink cost overruns are behind them, stock will lift. She owns ENB and PPL instead. All have safe, attractive yields.

He owned it for 20 years and then sold six months ago. It has gone nowhere and has had too many problems. An unrewarding stock even with a 7% yield.

Likes the pipelines, but he prefers ENB. Cost overruns on Coastal GasLink. Keystone is a big question mark, not sure if it's going through next year or not. Trading around 16x. Yield is 6.7%. 

Dividend is safe and will increase YOY, though perhaps not as aggressively as in the past. Not all high-yielding stocks are in trouble. Enormous cost overruns. Tremendous amount of free cashflow, but also huge capital projects which will bring in cash when they come online. A good buy.

It's been held back by overruns in their Coastal Gaslink project and balance sheet issues. Their asset sale is uncertain and and their southeast gateway pipeline has problems. But Q1 was a solid beat and the Gaslink is on track. Gaslink is on schedule and they reiterated 2023. Growth is flat but the dividend is attractive.

It has a 6.7% yield and is guiding to dividend growth over the next few years. It has dropped from $74 to $53 in one year so there is potential for good gains. There has been significant insider buying.    Buy 12   Hold 8   Sell 3

Owns this and Enbridge in energy. Crude oil prices will be challenging in the next few months, but TCE offers some insulation from that. Strong dividend in both companies. A hold and isn't adding to it.

Their struggles trace back to the cancellation of the Keystone. Capital has become more expensive, too.  But they trade at 8x operating cash flow, 12x earnings and pays a decent dividend. There isn't much growth, though. It's fine with this. Offers good downside protection. They can meet natural gas demand with their pipeline. Good valuation. He added to it in the low-$50's. But there will be cost overruns on the Coastal Gaslink project.

Difficult environment in this country for infrastructure. So the focus has to be on the US where they can grow and do acquisitions. Nice dividend yield, not expensive. He owns ENB instead, as it has a clear US strategy.

See goodreid.com for his March 3 article on this. Coastal GasLink is 87% complete, so risk of further cost overruns or negative news is fairly minimal. 13x earnings, solid balance sheet, attractive PE multiple.

It's been punished a lot recently given cost overruns on their projects. But the yield is attractive. Over the next year you can buy this.

West Coast pipeline will creating opportunity for Canadian energy producers.
Excellent long term prospects.
Legacy assets very hard to replicate.
Strong dividend.

The overhang of cost over-runs related to the west coast should disappear by next year so TC Energy should do better and the stock could move into the low 60's. Therefore now is a good time to buy in the low 50's.

Own it for yield and safety. Growth going forward, asset base is strong. Valuation has come down dramatically. 10-12x earnings, 8x operating cashflow, decent dividend yield, projects in the pipeline.

Dividend Explanation:
When looking at dividends, it is usually better to look at cash flow rather than earnings. 
Earnings have lots of non-cash expenses that impact results, such as depreciation and stock-based compensation, but have no impact on cash. But companies need cash to pay dividends so we prefer to look at operating cash flow. 
On that basis, in 2022 TRP had $6.4B in cash flow, and paid out $3.2B in dividends, for a payout ratio of 50%.  
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