This top pick’s first catalyst centers on the TC’s strategic positioning within North America’s accelerating energy transition, where natural gas demand is projected to increase by 4 billion cubic feet per day over the next decade driven by coal-to-gas conversions and explosive data center growth.
TC’s extensive pipeline network delivers 30% of North America’s natural gas supply and provides unparalleled access to these high-growth markets with 97% of cash flows secured through regulated rates and long-term contracts.
The second compelling catalyst is the firm’s transformation into a dividend aristocrat with exceptional financial discipline and capital allocation excellence. The company has delivered its 25th consecutive year of dividend increases, joining the elite ranks of global dividend aristocrats while maintaining one of the industry’s lowest payout ratios.
Meanwhile, the shares trade at a reasonable 18.8 times the company’s projected 2025 earnings of $3.65 a share.
TC ENERGY INC. (Toronto symbol TRP; www.tcenergy.com) is a top pick for 2025.
TC generates steady cash flow for investors mainly through a 93,700-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. It also owns gas pipelines in Mexico, and owns or invests in seven power plants in Canada and the U.S.
On October 1, 2024, TC completed the spinoff of its oil pipeline business as separate company South Bow Corp. (Toronto symbol SOBO). Investors received 0.2 of a South Bow share for every TC share they held. They will not be liable for capital gains taxes until they sell their new shares.
In 2022, TC formed an alliance with Mexico’s state-owned power company (Comision Federal de Electricidad) to jointly build and operate a new 715-kilometre natural gas pipeline (called the Southeast Gateway Pipeline) that will connect the ports of Tuxpan and Coatzacoalcos.
The new pipeline recently began operating. What’s more, costs of $3.9 billion U.S. were 13% below the original estimate.
Right now, TC’s operations in Mexico supply roughly 6% of its total revenue. However, the country continues to replace older power generators with new gas-fired plants. That should give TC more opportunities to keep expanding its Mexican operations.
Meanwhile, TC’s revenue in the quarter ended June 30, 2025, rose 12.5%, to $3.74 billion from $3.33 billion a year earlier.
Earnings rose 3.2%, to $848 million, or $0.82 a share, from $822 million, or $0.79 a share. Higher expenses, including for interest and taxes, held earnings back.
$27.7 billion in new projects targets data centers and LNG
TC now plans to spend $27.7 billion on new projects and upgrades through 2031.
These new assets will help the company profit from the rising export of liquefied natural gas (LNG) to Asia and other overseas markets. Moreover, U.S. power producers continue to convert their coal-fired plants to burn natural gas. As well, new datacentres that specialize in artificial intelligence applications and the shift to electric-powered vehicles will spur long-term demand for electricity.
Due to the loss of the South Bow assets, TC cut your quarterly dividend by 14.3% starting with the January 2025 payment. But it then raised it 3.3% with the March 2025 payment, to $3.40 annually. The stock yields 5.0%.
What’s more, new assets and rising earnings will let it increase that payment by between 3% and 5% annually.
TC will probably earn $3.65 a share for all of 2025, and the stock trades at a reasonable 18.8 times that estimate.
Recommendation in Canadian Wealth Advisor: TC Energy Inc. is a buy.
