TC Energy (TRP.TO)

This has been the top performer of the big pipes recently. The pending Columbia acquisition in the US is a game changer for them. It really adds to the natural gas exposure, and into the Marsalis-Utica plays. Hasn’t trimmed yet, but if it keeps going, he probably will.

(Market Call Minute.) This has rebounded quite a bit. In the mid $50, he thinks he would be standing back. Pays a good yield of 3.8%.

Hasn’t owned this for years. Thinks their issues are being addressed. They took their free cash flow and invested it in power, but it didn’t work out the way they had hoped. This is a really good gas transportation business. Recently received permits to start construction on the Coastal GasLink pipeline. We are being transformed in the next decade to a natural gas economy. Dividend yield of 4.36%.

Generally, it pays to hold this for the long-term. However, valuation is not cheap for a regulated industry. Trading at 20X this year’s earnings and 16X next. The 4.3% dividend yield is very attractive, and they have a history of dividend increases. If you put it away, you may not get huge capital appreciation, but if you only get 4%-5% a year, and adding that to your yield, it is a very nice long term rate of return. A good, solid stock to hold in a portfolio.

The pipes have had a good retreat and are in an area where there is some value to them. The question is, where are you going to get growth from. If they got the Energy East go ahead, that would be a positive and would give you some growth down the road. At these prices, this is okay to buy. Has a good yield of 4.5%, with some growth on the side.

You probably have some more upside, but it is not a buy. He does not find it particularly attractive here.

It is a well run business, and pays a nice dividend. It is going to do well over the long term as there is a shortage in pipeline capacity.

(Top Pick Jul 31/15, Up 3.41%) It is one of those monopolies because we are not building new pipelines. It is a great investment year over year that just keeps rewarding you.

(Market Call Minute.) Pipelines are a pretty tough place to be. This has very steady earnings with a lot of projects that aren’t in the headlines, but should drive growth. He would buy this at a lower level.

It has lower highs and lower lows. The low is going to hold. The bought deal puts a floor in on the stock. You could put a stop in there. There is no harm done by buying it now and the yield is fine.

Acquiring Columbia Pipeline Group (CPGX-N) for US$10.2 billion. This is a good deal for them. They are also selling their facility that supplies New York City, a stake in the Mexican gas pipeline as well as making a $4.2 billion capital raise. If Energy East doesn’t get built, it doesn’t matter too much to them, as this deal is going to be earnings accretive next year. They continue to raise their dividend 8%-10% a year through 2020.

Just acquired Columbia natural gas pipeline. This was a really strategic move to diversify away from Western Canada. His initial thought was that it was a statement on the prospects for Western Canadian gas, but looking out 4, 5, 10 years there has been so much growth out of the US plays, which have gone from next to nothing to 17 billion feet a day, that they are at risk of crowding out Canadian gas.

Pipelines? He added TransCanada (TRP-T) recently. Has not liked the pipeline sector for a while, simply because of valuation. You’re still looking at single digit growth in the industry along was some worries about growth projects going forward. However, stocks came down pretty dramatically. This is probably the best financed of the pipelines. Not hugely bullish on the sector and wouldn’t be putting money into any of these today.

A good place to get back into. It sort of represents a “1^st in/last out” philosophy. The downtrend has been broken. They are trying to focus on liquid gases to diversify bases a little. Has a really nice dividend. His target a year from now is around $59.

Any time you have a utility, you basically have a company that has its hand in your pocket, because it has a required rate of return it has to earn. This is a long, ongoing saga, of trying to get a pipeline through the US as well as getting one into eastern Canada. So far they are being blocked at every turn. The stock has fallen down to what he considers to be pretty darn good support, at about $40-$41, about 1.5X BV. It doesn’t have a ton of upside potential because it needs one of those pipeline projects. Has a nice 4.5% dividend yield while you are waiting.