TC Energy Corporation (TSX:TRP)(NYSE:TRP) is down 15% this year as low oil prices combined with a global pandemic have sent oil and gas stocks into a tailspin. But TC Energy, formerly known as TransCanada, is still one of the safer buys in the industry.
When the company released its quarterly results on May 1, TC Energy noted that “the availability of our infrastructure has remained largely unimpacted by recent events with utilization levels robust and in line with historical norms.”
That was clearly the case with the company reporting net income attributable to common shareholders totaling $1.15 billion in Q1 compared to $1.0 billion in the prior-year period.
It’s that kind of stability that’s allowed TC Energy to continue paying its dividend. Quarterly payouts of $0.81 are 8% higher than they were a year ago when the company was paying shareholders $0.75 every quarter.
With the increase, the stock’s increased its payouts for 20 years in a row. Annually, investors who buy today will be earning a yield of 5.5%. And if TC Energy continues increasing its dividend payments that percentage will rise over the years.
For dividend investors, buying shares of TC Energy could be a good, strategic move. If the price of oil grows higher there could be a bit more bullishness surrounding oil and gas stocks. And that could lead to some capital gains that can be earned on top of the dividend income that the stock provides.
Trading at 14 times its earnings and a price-to-book multiple of just two, TC Energy’s a well-priced dividend stock that could generate significant returns in the near future.
