Yahoo Finance Dividend Hunters Should Consider TransCanada Corporation (NYSE:TRP), With A 5.03% Yield
Over the past 10 years TransCanada Corporation (NYSE:TRP) has grown its dividend payouts from CA$1.44 to CA$2.76. With a market cap of US$37.11B, TransCanada pays out 72.83% of its earnings, leading to a 5.03% yield. Let me elaborate on you why the stock stands out for income investors like myself. View our latest analysis for TransCanada
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically: It is paying an annual yield above 75% of dividend payers It consistently pays out dividend without missing a payment or significantly cutting payout Its has increased its dividend per share amount over the past It is able to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future
High Yield And Dependable
TransCanada’s dividend yield stands at 5.03%, which is high for Oil and Gas stocks. But the real reason TransCanada stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of TRP it has increased its DPS from CA$1.44 to CA$2.76 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. The current trailing twelve-month payout ratio for the stock is 72.83%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect TRP’s payout to increase to 87.96% of its earnings, which leads to a dividend yield of around 5.64%. However, EPS is forecasted to fall to CA$3.38 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
Next Steps:
TransCanada ticks all the boxes for what I look for in a dividend stock. If you are looking to build an income focused portfolio, this could be one to include. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I’ve compiled three important aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for TRP’s future growth? Take a look at our free research report of analyst consensus for TRP’s outlook.
Valuation: What is TRP worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TRP is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
