Some businesses, including those of industry giants, evolve to improve their growth profile and long-term earnings potential. TC Energy (TSX: TRP) is undergoing a strategic transformation after spinning off its crude oil and liquids pipeline assets nearly two years ago. Looking ahead over the next five years, this high-yielding stock could look very different while offering lower-risk total returns.
The energy sector continues to do the heavy lifting for the TSX, driven by rising commodity prices. TRP has outperformed the broader market so far in 2026, with a 14.6% year-to-date gain versus plus-12.2%. At $84.96 per share, the large-cap stock pays a 4.1% dividend. The historical 5-year average yield is between 5.5% and 6.5%. Yield compression occurred post-spinoff.
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Utility-like stability
Today, TC Energy focuses on natural gas, power, and energy solutions. Its 58,222-mile-long natural gas pipeline network supplies about 25% of North America’s natural gas daily consumption. The $88.6 billion energy infrastructure company has maintained its regulated, low-risk, and utility-like portfolio.
TC Energy believes its extensive natural gas infrastructure and power generation investments will help secure the region’s energy future. Rate-regulated or long-term take-or-pay contracts (approximately 98% of EBITDA) provide utility-like stability against commodity price swings.
Strong operational and financial performance
In the first half of 2026, net income increased 2.5% year-over-year to $1.9 billion, while net cash provided by operations rose 36.5% to $4.8 billion. According to its President and CEO, François Poirier, the strong financial performance underscores the strength of TC Energy’s diversified portfolio. It also showed the ability to deliver low-risk, repeatable results consistently.
On the operations side, Canadian and U.S. natural gas pipeline deliveries in Q2 2026 increased 1% and 5%, respectively, compared to Q2 2025. Notably, approximately $1.8 billion of projects went into service in the first six months of 2026. Two approved expansion projects in June further strengthened TC Energy’s position in high-growth power markets, including data centre development.
Poirier adds that compelling North American market fundamentals will continue to reinforce TC Energy’s long-term growth outlook. He notes natural gas demand growth estimates of around 51 billion cubic feet per day (Bcf/d) from 2025 to 2035, driven by liquefied natural gas (LNG) exports and gas-fired power generation, as well as industrial growth.
Dividend power and dividend growth
While the yield compression reflects a lower-risk profile, TRP retains dividend power, not to mention attractive dividend growth. Along with asset base growth from $25 billion in 2000 to $124 billion currently, TC Energy has raised dividends for 26 consecutive years.
Stable cash generation can fund both big-ticket capital projects and sustainable dividend increases. The company’s long-term dividend growth guidance is 3% to 5%. A $25,000 investment in TRP today will grow to $56,862.80 in 20 years with dividends reinvested. If you wish to collect instead of reinvesting dividends, the quarterly payout is $258.13.
Lower-risk profile tomorrow
Expect TC Energy’s transformation from a high-volatility midstream company to be on display in five years. The result should be a utility-like, dedicated natural gas player with a de-risked business model and lower-risk return profile. Buying the stock now allows you to capture a high yield before the business fully blossoms.
