TC Energy (TRP.TO)

Doesn’t think the Keystone XL pipeline will be approved, but doesn’t think the prospects of one are being built into the price of this company’s right now.

Likes this longer-term. Increased their dividend by about 8% so far, and expects good dividend growth of 5%-10% over the next number of years. There is still growth in the company and it is primarily in the gathering systems in Alberta and Western Canada.

Doesn’t think there is any rush to buy the pipes as they are sort of considered yield plays. Pipeline companies are having a heck of a time getting anything approved.

Most analysts would consider this as a Buy. The market is starting to favour growth, and he doesn’t see a tremendous amount of growth in this. Trading at 20X forward earnings, so relative to the market it is expensive. There is an opportunity to drop down assets into the MLP (Master Limited Partnership?). Certain pipeline catalysts could be Keystone XL approval, but doesn’t think that is going to happen any time soon. Opportunities to take liquids and gas to the West Coast are another possible catalyst. Not a screaming Buy for him though.

Has been out of this for awhile. Found valuations really excessive. This and Enbridge (ENB-T) were trading with 20+ earnings multiple. In the past they have always traded at 10 or 15. Growth is about the same where it has always been, single digit. If you are a long-term investor, he would be inclined to hang onto it because there is some growth going forward. Good dividend yield.

He just recently sold it. His clients did very well. He is starting to reduce his exposure to these companies that benefited from interest rates going down and the flight for yield.

(A Top Pick May 28/14. Up 10.46%.) A little worried about the long-term prospects. It is still in the process of improving the movement of oil, both south and east, and hopefully they will be able to do more to the west.

It is good for widows and orphans. It does not quite make the grade in his strategy. He would rather have IPL-T and others. It is fine but don’t expect large increase in the dividend going forward.

(Top Pick Jun 5/14, Up 11.09%) Of course Keystone matters. He is optimistic that at least some of their mega projects get built.

Continue to hold or transfer into a mutual fund? There is no question that you continue to hold. It will be cheaper for you.

Stock vs. Stock. ENB-T vs. TRP-T. TRP-T has challenging projects.

It is difficult to build a new pipeline now, even though they are demonstrably safer than rail for moving commodities. It is nuts to move oil by rail and eventually people should come to their senses. If you have a pipeline you have something worth protecting. TRP-T has a good record of raising their dividend year after year and there are great barriers to competitors.

It has been running up against very stiff technical resistance at $55. The fair market value is right at that point. Fundamentally the company needs the pipeline to go ahead. It will sit in your portfolio with the 4% yield and not make much more money.

She doesn't own TRP-T, but owns Inter Pipeline, Pembina Pipeline and Enbridge. She prefers ENB-T over TRP-T because it has a strong backlog of projects and expects to grow their dividend 12-16%.

Longer-term they are growing their dividend 5%-8% per year, which he likes. You are probably paying nothing for Keystone and maybe a little for Energy East. Growth over the next couple of years, is primarily infrastructure in Alberta.