Delving Into the Dividends of TC Energy Corp (NYSE:TRP)
TC Energy Corp (NYSE:TRP) recently announced a dividend of $0.93 per share, payable on 2024-01-31, with the ex-dividend date set for 2023-12-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into TC Energy Corp's dividend performance and assess its sustainability.
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TC Energy operates natural gas, oil, and power generation assets in Canada and the United States. The firm operates more than 60,000 miles of oil and gas pipelines, more than 650 billion cubic feet of natural gas storage, and about 4,300 megawatts of electric power.
TC Energy Corp's Dividend Analysis
A Glimpse at TC Energy Corp's Dividend History
TC Energy Corp has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis.
TC Energy Corp has increased its dividend each year since 2000. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 23 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down TC Energy Corp's Dividend Yield and Growth
As of today, TC Energy Corp currently has a 12-month trailing dividend yield of 6.76% and a 12-month forward dividend yield of 6.73%. This suggests an expectation of stable dividend payments over the next 12 months.
Over the past three years, TC Energy Corp's annual dividend growth rate was 6.30%. Extended to a five-year horizon, this rate increased to 7.70% per year. And over the past decade, TC Energy Corp's annual dividends per share growth rate stands at 8.20%.
Based on TC Energy Corp's dividend yield and five-year growth rate, the 5-year yield on cost of TC Energy Corp stock as of today is approximately 9.80%.
TC Energy Corp's Dividend Analysis
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, TC Energy Corp's dividend payout ratio is 0.00.
TC Energy Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks TC Energy Corp's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. TC Energy Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and TC Energy Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. TC Energy Corp's revenue has increased by approximately 1.80% per year on average, a rate that underperforms approximately 68.45% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, TC Energy Corp's earnings increased by approximately -8.40% per year on average, a rate that underperforms approximately 78.64% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -2.10%, which underperforms approximately 76.79% of global competitors.
Next Steps
In conclusion, TC Energy Corp's track record of consistent dividend payments and growth, combined with a stable yield, positions it as a potentially attractive option for income-focused investors. However, investors must also consider the company's payout ratio, profitability, and growth metrics when evaluating its future dividend sustainability. While the payout ratio currently stands at 0.00, indicating no earnings or an undefined ratio, the company's profitability and growth ranks reflect a positive outlook. Nonetheless, the underperformance in revenue and earnings growth rates compared to industry peers could be a concern. It is crucial for investors to monitor these aspects to ensure that the dividends are not only sustainable but also have the potential to grow.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
