Get 4.7% yield from TC Energy Corp.

Sales of non-core assets plus future projects should let this company raise its dividend 8% to 10% annually through 2021.

Asset sales will help fund new pipeline projects as the company grapples with legal and environmental opposition to its proposed $8 billion U.S. Keystone XL pipeline.


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TC ENERGY CORP. (Toronto symbol TRP; www.tcenergy.com) is the new name for TransCanada Corp.

The company operates a 91,900-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. Other operations include 4,900 kilometres of crude oil pipelines and 11 power plants.

The company continues to face legal and environmental opposition to its proposed, $8 billion U.S. Keystone XL pipeline, which would pump crude oil from Alberta to the U.S. Gulf Coast.

Due to those delays, TC Energy will probably begin construction in 2020 instead of 2019. However, excluding Keystone XL, the company plans $30.3 billion in new pipelines and projects, which will spur its long-term growth.

Blue Chip Stocks: Asset sales will fund new long-term projects

The company continues to sell less-important assets to fund $30.3 billion in new pipelines and other long-term projects. That spending is equal to 50% of its $61.0 billion market cap (the total value of all outstanding shares).

For example, the company recently agreed to sell its U.S. midstream operations for $1.275 billion U.S. Those businesses gather and process natural gas and gas liquids in Pennsylvania, Ohio and West Virginia. The company expects to complete the sale in the third quarter of 2019.

TC Energy also recently agreed to sell 85% of its Northern Courier Pipeline to Alberta Investment Management Corporation (AIMCo). This 90-kolometre pipeline pumps bitumen from the Fort Hills oil sands project to Suncor Energy’s terminal north of Fort McMurray, Alberta.

TC Energy will receive $1.15 billion when it completes the sale in the third quarter of 2019.

Even outside of Keystone XL, the additional cash flow from new projects will let TC Energy raise its dividend 8% to 10% annually through 2021. The shares now yield a high 4.7%.

Recommendation in The Successful Investor: TC Energy is a buy.

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