This market crash has been full of its ups and downs. Solid blue-chip stocks plummeted as investors around the world become fearful of when normalcy might return. The oil and gas industry in particular has been incredibly hard hit. Even before the market crash, the oil and gas glut has beaten down gas prices.
Yet there was a bit of hope after the market crash. It seemed as if companies could be on the rebound. However, with earnings reports and more negative news coming within the oil and gas industry, another drop could be well on the way.
Political market crash
In case you didn’t remember, what with a lot of other important things going on, there is an election coming up in the United States this year. Democratic candidate Joe Biden certainly hasn’t forgotten, and made a huge announcement this week that sent TC Energy shares sinking.
Biden stated that should he win, the Keystone XL pipeline permit would be quashed. This is devastating news to TC Energy, as the company announced back in March that it would be moving forward with building the pipeline.
This pipeline was the catalyst behind a lot of positive movement for the stock, even during the market crash. While other energy stocks and even pipeline companies were sinking, TC Energy looked like it was still solid as a rock. Granted, an 11% drop isn’t enormous. In fact, its earnings report even outperformed analyst expectations for the first quarter of 2020. But this dip could be just the first wave should Biden follow through on the plan.
Whether or not Biden wins, TC Energy is a sector that’s sorely needed in the oil and gas industry during this market crash. Until more environmentally friendly methods of transporting fuel across North America can be created, pipelines seem to be the answer.
Environmental and social barriers still exist, and these hurdles will have to be faced head one. That’s why Keystone XL seemed to be the sole winner in an industry of losers.
But TC Energy has other projects underway, with a number of growth projects coming up in the future that should continue bringing in cash for decades. The company also has long-term secured contracts to keep cash rolling in for investors.
While today’s dip isn’t ideal, it also isn’t the end of the world. In fact, it could be an opportunity to buy up the stock before it rises yet again.
TC Energy offers investors a strong dividend yield of 5.17% as of writing — a yield that has been steadily increased over the past 20 consecutive quarters. It also has a steady history of growth over the past few decades.
While the company might be on a dip, it won’t stay there for long. If another market crash comes in the near future, TC Energy may not be likely to fall again, leaving you little time to buy into this strong dividend stock while it’s down.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.