3 Reasons to Buy TC Energy Stock Hand Over Fist After its Q4 Earnings Event

These top reasons make TRP stock worth considering after its fourth-quarter earnings event.

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TC Energy (TSX:TRP) announced its fourth-quarter and full-year 2023 financial results before the market opening bell on February 16. If you don’t know it already, it’s one of North America’s largest energy infrastructure companies, with a diversified portfolio of oil and gas pipelines and storage facilities. As of February 15, this Calgary-headquartered energy infrastructure firm has a market cap of $ 53.9 billion as TRP stock trades at $52 per share after declining by 8.2% in the last year.

In this article, I’ll highlight three main reasons to buy TC Energy stock after its fourth-quarter earnings event.

TC Energy’s solid financial performance

In the fourth quarter of 2023, TC Energy reported a notable rise in its profits, with its adjusted earnings climbing 21.6% YoY (year over year) to $1.35 per share from the $1.11 figure in the same quarter of 2022. Its latest earnings figure also exceeded the expectations of Street analysts by about 22%, who were expecting earnings of about $1.11 per share without any change on a YoY basis.

These positive results are more significant as TC Energy’s earnings declined in the last two quarters.  That’s another reason why its latest results could be considered a bullish indicator, which could drive TRP stock prices higher in the short term.

The energy firm’s full-year 2023 financials were equally impressive. TC Energy’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 28.3% YoY in 2023 to nearly $11 billion. Similarly, its adjusted EBITDA margin last year expanded to 69% from 66.1% in 2022. This financial robustness showcases TC Energy’s strong operational performance with a focus on strategic initiatives, making TRP stock attractive to buy now.

Continued focus on expansion projects

In 2023, TC Energy also remained focused on long-term growth efforts that make its growth prospects brighter. The mechanical completion of the Coastal GasLink pipeline project and the announced intention to spin off the liquids pipelines business are two examples of such efforts. Similarly, the company’s asset divestiture program helped it strengthen its financial position last year.

In addition, TC Energy successfully executed projects worth around $5.3 billion on a budget in 2023, highlighting the high level of its project execution skills with decades of experience in the energy infrastructure business. These projects include the expansion projects on its NGTL System and the Bruce Power Unit 6 Major Component Replacement (MCR).

Going forward in 2024, TC Energy plans to place about $7.0 billion of new projects in service. I expect these strategic initiatives to help the company strengthen its assets portfolio further and maintain its competitive advantage in the energy sector.

Strong dividend-growth outlook

Besides these positive fundamental factors, TC Energy’s outstanding dividend-growth track record makes its stock really attractive to buy for the long term, especially for investors seeking passive income from their stock investments.

In its fourth-quarter earnings report, TC Energy announced a 3.2% increase in its quarterly dividends to $0.96 per share, marking its 24th consecutive year of dividend growth. This consistent dividend growth highlights the company’s focus on returning value to its shareholders.

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.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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