With Joe Biden winning the U.S. election, one sector that's likely to suffer is going to be oil and gas. President Donald Trump's been partial to the industry and helped the Keystone XL move forward. However, under Biden, that's not likely going to be the case.
Not only may the Keystone XL get cancelled under Biden but different policies from Trump, such as possibly lifting sanctions on Iran, could lead to more oil flooding the markets and pushing down the commodity price in the process.
TC Energy Corporation (TSX:TRP)(NYSE:TRP), which owns the Keystone XL, is one stock that could feel the impact of the change in power south of the border. Shares of the energy stock are down more than 25% in 2020 and a worsening outlook for the industry could mean that more of a decline's in the cards for TC Energy.
During the three-month period ending Sept. 30, TC Energy's cash from operations in the third quarter were $1.8 billion and that wasn't enough to cover the company's capital expenditures of $2.1 billion during the period. And it's in an even worse cash position when you consider that it paid dividends of $761 million in Q3.
Today, TC Energy still pays a quarterly dividend of $0.81, which yields 6.4% annually. On a $25,000 investment, you'd earn $1,600 in dividend income each year. It’s a high yield and one that income investors shouldn't get too comfortable with if conditions in the industry deteriorate further under a Biden presidency.
Although the stock's a cheap buy, trading at 1.7 times book value, it isn't a suitable investmet for risk-averse investors.
