Natural gas pipeline giant TC Energy (TSX: TRP) stock has lost 14.4% of its market value over the past three months. This recent pullback from its 2026 52-week high can be best viewed as a healthy correction driven by profit-taking, U.S. interest rate fatigue, and increased market scrutiny over the Canadian natural gas stock’s multi-billion-dollar capital-expenditure program.
For income-oriented investors, this recent drop has nudged TC Energy stock’s dividend yield marginally up to nearly 4.2%. That presents an attractive entry point to initiate a position in a 75-year-old energy infrastructure titan which boasts 25 consecutive years of uninterrupted dividend increases. But is now the right time to buy the dip on this dividend titan?
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TC Energy stock’s safe yield meets demand-driven growth
TC Energy stock remains a compelling core holding for income portfolios, backed by predictable contracted pipeline and regulated power-generation cash flows, disciplined capital recycling, and a powerful natural gas structural tailwind.
North America is experiencing a natural gas super-cycle fueled by two major catalysts: expanding liquefied natural gas (LNG) export capacity and rapid artificial intelligence (AI) data centre construction requiring reliable, gas-fired baseload power. And TC Energy is a well-positioned key player in the LNG value chain that stands to benefit materially.
High-grading its capital: TC Energy’s $560 million Mexico asset sale
A key pillar of management’s minimally dilutive growth strategy is portfolio optimization. TC Energy recently announced the sale of its 313-kilometer Guadalajara-Manzanillo Pipeline in Mexico for $560 million. Expected to close in the first half of 2027, the transaction sheds approximately 500 million cubic feet per day (MMcf/d) of natural gas transportation capacity.
This sale is a net positive for shareholders. It generates immediate liquidity to fund higher-return projects, strengthens the balance sheet, and supports management’s self-funded growth model without diluting equity. Even after the sale, TC Energy retains a lucrative 30-year operational footprint in Mexico, anchored by a 3,300-kilometer network moving nearly 8.7 billion cubic feet of natural gas per day.
Ready to capture the AI and LNG growth opportunities
TC Energy already transports over 30% of North America’s natural gas. Reinvesting proceeds from sales of mature assets into high-value infrastructure positions the energy stock ready to capture outsized market share in a structurally expanding LNG market.
Key growth channels include U.S. and Canadian LNG infrastructure as TC Energy extends feeder lines to connect expanding export facilities along the U.S. Gulf Coast and Western Canada (LNG Canada). Power grid interconnects are a new growth frontier as the company builds dedicated pipeline extensions to fuel gas-fired power plants directly serving new hyperscale data centres across Canada and the U.S.
TC Energy has sanctioned roughly $3 billion in new capital projects, has $7 billion pending approval, and estimates $20 billion in total development opportunities through 2034.
Time to buy?
TC Energy stock’s trailing price-to-earnings ratio of 24.0 sits above the industry average of 18.4 to make the dividend stock somewhat expensive. However, its enterprise value-to-free cash flow ratio of 37.4 aligns directly with North American industry peers, implying the stock remains fairly valued relative to its cash-generating capacity.
Growing LNG demand has rejuvenated TC Energy’s growth prospects. If management continues to successfully recycle capital, control balance sheet leverage, and execute on its $20 billion project pipeline without punitive equity dilution, current investors stand to benefit from compound capital gains alongside a safe, growing dividend.
The recent 14% drop in TC Energy stock is seemingly a clear buying opportunity for long-term income seekers.
