The S&P/TSX Composite Index shed 33 points on Monday, August 21. Meanwhile, the S&P/TSX Capped Energy Index lost more than half a percentage point in the same trading session. Today, I want to zero in on a top dividend stock that operates in the energy sector. TC Energy (TSX: TRP) is my pick to deliver big income in 2023 and beyond. In this piece, I want to discuss why I have my eyes on the energy sector and this dividend stock in particular. Let’s jump in.
Here’s why I’m targeting the energy sector in the second half of 2023
There is considerable anxiety surrounding the energy sector in the late summer of 2023. This is likely due to the creeping economic concerns that are bubbling up in the developed world. Last week, Statistics Canada revealed that inflation ticked up in the month of July. Meanwhile, analysts and economists are warning that central banks may demand more pain from consumers in the months ahead as interest rates have reached highs not seen since the early 2000s.
Despite this reality, I’m still looking to the energy sector right now. Energy investment is still going strong, especially as top companies are betting big on green energy alternatives. Back in May 2021, TC Energy boasted of the strides it had made in this space. It stated that approximately 75% of its power capacity is emission-less, 10% of its compression fleet is electric, and it is pursuing investments in next-generation technology and clean fuel research.
How has this dividend stock performed over the past year?
Shares of TC Energy have dropped 4.9% month-over-month as of close on Monday, August 21. Meanwhile, this dividend stock has plunged 9.2% so far in 2023. The stock has decreased 25% year over year at the time of this writing. Investors can chart its recent decline and prior performance with the interactive price chart below.
Should investors be happy with TC Energy’s recent earnings?
This company released its second-quarter (Q2) fiscal 2023 earnings on July 27. In Q2 2023, TC Energy reported net income of $250 million or $0.24 per share — down sharply from $889 million, or $0.90 per share, in Q2 2022. In the first six months of this fiscal year, the company posted net income of $1.56 billion or $1.53 per share compared to $1.24 billion, or $1.27 per share, in the previous year.
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. This measure aims to give a more complete picture of a company’s profitability. In Q2 2023, TC Energy delivered comparable EBITDA of $2.47 billion — up from $2.36 billion in the previous year. Meanwhile, comparable EBITDA posted 10% growth in the first half of fiscal 2023 to $5.24 billion.
TC Energy: Why this dividend stock is perfect for super income
In its Q2 report, TC Energy declared a quarterly dividend of $0.93 per common share. That represents a very tasty 7.6% yield. This company has achieved 22 consecutive years of dividend growth, which makes this high-yield dividend stock one of the top Dividend Aristocrats. Moreover, TC Energy is trading in very solid value territory compared to its industry peers.
