TC Energy (TRP.TO)

Spinout should happen in the fall. South Bow is the more interesting one, could be takeover target. Last quarter was a beat. Too cheap at 12x 2025 earnings, nice dividend, good job executing. Not a lot of EPS growth right now. Sector's done well this month, might need to rest. Likes it, but you don't have to buy it at $53.

It has had a record delivery of natural gas.. Planned data centres will need a lot of energy. There's lots of consumption of natural gas in the U.S. and lots of production in Canada. Pays a 7% dividend.

Excellent company with strong asset base. Higher energy prices will benefit shareholders & bottom line. Expecting dividend to grow 3-5% annually. Move ~25% of all natural gas in North America. Also have power generation business(nuclear). Trading at ~12.5x earnings which is cheap. Coastal Gas Link + Southeast Gateway are major capital projects next year. Southbow energy will split out next year with oil assets. Good time to buy for long term investors.  

The pipelines are a good place to be and the pricing is not sensitive to the commodity prices. The yield is now 7% and it trades at a more reasonable valuation. It is not high growth and not high risk so there is little downside.

Tremendous network of pipelines, wonderful barrier to entry. Also 7 nuclear, gas, and power plants. Higher costs on Coastal GasLink created a buying opportunity. Spinning off lower-growth oil business to trim debt and focus on faster-growing nat gas unit. High returns, balance sheet stronger than some peers and improving, high yield of close to 8%. Attractive valuation. Likes it.

For more information, see the goodreid.com blog for his Globe and Mail article.

A dividend play, now paying nearly 8%. A retiree can buy now and collect income for years to come. TC is spinning off the liquids part of the business, so TC will remain a pure gas play. Their debt is exposed to high interest rates, but the term of their debt is a decade long. If they continue to sell assets and focus on gas, TC will do well.

Debt-driven business, so interest rates hurt. Dividend yield of 7% is quite safe. Owns great assets, not easily replaced. Future growth will be in the US. Own it here and do well. He owns ENB.

They've delivered poor guidance and returns, but you can collect the dividend. Demand for natural gas could help. The balance sheet isn't great.

He owns a little but prefers others for exposure to pipelines and infrastructure. It has a little too much debt and a higher payout ratio. It would be 4th or 5th on his list of stocks in this field.

Its dividend is 7%. It is not usually that high which means the stock is oversold. It is putting out more positive news in the past little while and insiders have bought $8 million worth of stock over the past year. A lot of analysts have Hold positions and should start to move away from this. It beat earnings estimates by 20% and raised guidance. It is at the low end of its trading range. If interest rates come down then the price could rise.    Buy 9  Hold 12  Sell 2

The question was on his preference re Canadian Natural Resources or TC Energy. TRP has a lot of debt and it's hard to build a pipeline. CNQ has driven down debt. It will sit at a lower level of around $10 billion and return excess money to shareholders.

Good business with strong assets. Splitting pipeline assets into separate company. Natural gas and nuclear energy business strong. Excellent management team. Dividend yield ~7%. Expecting growth in dividend yield. Coastal Gas Link good for business. Best pipeline business in Canada. 

Interest-sensitive pipelines have all had a rough time. He owns ENB. 

These companies have great assets that aren't going away. CEOs of these companies feel it's difficult to do business in Canada. ENB, for example, is dedicating all its capital to the US. That's going to be the strategy if these companies want to grow. 

Good time to buy. Though rates aren't going down as quickly as people think, they're not going up from here. That's the value proposition. Over the next 6-9 months or so, rates will come down at the short end and the yield curve will look differently. These companies will benefit from that.

The dividend yield is elevated. Stock has more upside. It's a bond proxy if you hold this long term. A good, long-term story.

Impressive that the stock's done nothing for a year, yet you still get a great dividend return. Assets are very difficult to replicate, long-term competitive advantage. Shares under pressure from macro and company-specific events. Trades 12x earnings, looking at possible interest rate drops later this year. Yield close to 7.5%.