Many investors often seek out investments that can provide a reliable stream of income during volatility. This can be regardless of the unpredictable movements in the broader market. Dividend-paying stocks, especially those with a long history of consistent growth, can offer just that kind of stability. One such option is TC Energy (TSX:TRP). This energy stock has a well-established track record of paying dividends and, furthermore, of steadily increasing those payouts over time. This makes it an appealing choice for investors who are primarily focused on generating a dependable income stream, irrespective of the often-volatile fluctuations in energy prices.
Earning that income
As of writing, the energy stock trades at $68. Just recently, the company announced a positive development for its shareholders with an increase in its quarterly dividend by a solid 3.3%. This brings the annual dividend to $3.40. For investors who are seeking a specific annual income target from their investments, understanding how many shares they would need to own is crucial.
To earn $5,000 annually in dividends from TC Energy, based on this current annual payout per share, let’s see how many shares you would need to purchase.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| TRP | $68 | 1,471 | $3.40 | $5,001.40 | quarterly | $100,028 |
Is the investment worth it?
As you can see, this would create a massive investment of $100,028 at writing. So, is it worth it? To decide this, let’s look at the company overall. TC Energy’s commitment to rewarding its shareholders through dividend growth is clearly evident in its impressive track record. The energy stock consistently increased its dividend payout for 25 consecutive years. This long history of dividend growth speaks volumes about the company’s financial stability, its mature business model, and its dedication to returning value to its investors.
Furthermore, its payout ratio currently stands at a comfortable 88.3%. This figure suggests that the dividend is well-supported by the energy stock’s earnings and is likely sustainable in the foreseeable future.
In terms of its overall financial performance, TC Energy reported a net income of $4.6 billion for the full year ending December 31, 2024. This represents a significant increase compared to the net income of $2.8 billion the energy stock reported in the previous year, 2023. This substantial improvement in net income underscores the company’s strong operational performance and ability to generate significant profits. Furthermore, consistent growth in earnings before interest, taxes, depreciation and amortization (EBITDA) further supports the energy stock’s ability to maintain and grow its dividend payments.
Future outlook
Looking ahead to the current fiscal year, 2025, TC Energy anticipates continued growth in its operational profitability. The energy stock provided guidance for its comparable EBITDA, projecting a range of $10.7 billion to $10.9 billion for the year. This expected increase is anticipated to be driven by the contributions from new and recently completed projects, such as the Southeast Gateway pipeline in Mexico, as well as increased contributions from its existing NGTL System. This is a major natural gas pipeline network in Western Canada.
The prices of energy commodities like oil and natural gas can be subject to significant and often unpredictable fluctuations. Yet TC Energy’s diversified portfolio of energy infrastructure assets and the fact that many of these assets operate under regulated frameworks provide a significant buffer against the volatility of the broader energy markets. The energy stock’s extensive network of pipelines and other infrastructure assets are essential for the transportation and delivery of energy across North America. These provide a relatively stable and predictable stream of revenue.
For investors primarily seeking reliable and growing income, owning shares in TC Energy could be a rewarding choice – one offering some peace of mind in an often-uncertain market environment. However, as always, it’s crucial for investors to conduct their own thorough due diligence and ensure that any investment aligns with their individual financial goals, risk tolerance, and overall investment strategy.
