TC Energy (TRP.TO)

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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Canadians need TRP's Coastal Gaslink completed instead of paying for costlier alternatives. Pays over a 7% dividend. A cheap way of playing energy now. Is cheaply priced. Some concern over debt levels, but he's not overly concerned. Energy directly benefits from inflation.

(Analysts’ price target is $60.30)

Most controversial of the pipelines with Coastal GasLink over budget. Combined with inflation in operations, may not see dividend increases going forward. A lot of revenues are contracted and protected. 

They had inexcusable cost overruns on the Coastal Gas Link Pipeline. This is not a good time for this type of company with higher interest rates affecting the cost of borrowing. Don't buy a stock for the dividend - buy it for the growth in free cash flow.