The stock market is showing no signs of recovering right now and it's not an easy time for investors to buy stocks. But a great opportunity exists, particularly when you're looking at energy stocks that pay dividends. It's one of the few sectors that has been doing well as oil prices have been elevated this year.
One stock that investors should take a close look at is TC Energy (TSX:TRP)(NYSE:TRP). The energy infrastructure company's shares have been flat year to date, but for much of the year its returns were in double-digits. In the past six months, its shares have fallen 16% as oil prices have also been declining, putting price on oil and gas stocks. With the drop in share price, TC Energy's dividend yield is now around 6.1%. At that high of a payout, you would need to invest just under $16,400 to collect $1,000 in dividends over the course of a year.
If you hold onto the stock, there's also a good chance that your dividend income will increase over the years. In the past two decades, TC Energy has continuously raised its dividend payments, averaging a compounded annual growth rate of 7%.
The energy company also has strong financials, generating profits of $3.1 billion on revenue of just under $14 billion for the trailing 12 months, for a profit margin of 23%. Its gross margins of nearly 80% put it in an excellent position to post a strong bottom line even if costs rise.
TC Energy is a blue-chip stock that income investors can buy and hold for years.
