TransCanada Corp. $48.05 - Toronto symbol TRP

TRANSCANADA CORP. $48.05 (Toronto symbol TRP; Shares outstanding: 709.0 million; Market cap: $34.0 billion; TSINetwork Rating: Above Average; Dividend yield: 4.3%; www.transcanada.com) has launched two legal challenges to the U.S. government’s recent decision to block its proposed Keystone XL pipeline, which would have pumped crude oil from Alberta to the U.S. Gulf Coast. The company spent $4.3 billion on Keystone XL and now expects to write off between $2.5 billion and $2.9 billion of this total. TransCanada plans to appeal the U.S. decision under the North American Free Trade Agreement and will ask for $15 billion U.S. in damages. In a separate case, it will challenge the U.S. president’s authority to deny a construction permit. These trials will take several years to settle, and there’s no guarantee TransCanada will win. Even so, by 2020, the company plans to complete $46 billion worth of other pipelines and power plants. Cash flow from these projects will let TransCanada raise its dividend by 8% to 10% annually over the next five years. TransCanada is a buy.