TransCanada Corporation (TSX:TRP)(NYSE:TRP) is ready to reapply for its Keystone XL permit in the U.S. after President Trump’s announcement that he would be open to approving the project. President Trump has made it clear that he’s a fan of any initiative that will create jobs for the American people while strengthening the U.S. economy.
In regards to Keystone XL, TransCanada stated it would “create thousands of well-paying construction jobs and would generate tens of millions of dollars in annual property taxes to counties along the route as well as more than $3 billion to the U.S. GDP.”
It sounds like Keystone XL will be ready to move forward after many years of being held back, but one pundit believes that there’s only a 50% chance the Keystone XL pipeline will actually be built. Connect Global Strategies consultant Paul Michael Wihbey stated, “there’s only a 50-50 chance the scheme will ever be built,” and that the project could be a part of “wider free trade negotiations, requiring that only American goods and services are used for construction, or a border tax on energy exports.”
There’s no question that there are still many potential unknowns regarding the conditions of the project. It can be very difficult to forecast what President Trump will do next, but there is huge potential upside if the project goes through with fair terms for both sides.
If the Keystone XL pipeline doesn’t get the green light this year, there are still other projects that have promising growth prospects. There’s over $25 billion worth of smaller projects under development that will help the company increase free cash flow until 2020. These small projects are expected to finish within the next two years, and there’s no doubt that a big chunk of this cash will go back to shareholders in the form of a generous dividend increase.
The stock currently yields a very bountiful 3.68%, and it’s expected that another dividend increase could be on the horizon this year. The company is a dividend-growth superstar and has upped its dividend each year over the last decade, even during the Financial Crisis. If the Keystone XL project gets the green light, then investors can expect much bigger dividend increases over the long haul.
If you believe President Trump will give his gold stamp of approval this year, then now is the time to load up on shares because the stock will soar into the atmosphere once the announcement happens.
