TRANSCANADA CORP. $49.58 (Toronto symbol TRP; Shares outstanding: 707.0 million; Market cap: $34.8 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.transcanada.com) may face higher costs for its proposed Keystone XL pipeline, which would pump crude oil from Alberta to Steele City, Nebraska. From there, existing lines would carry it to refineries in the U.S.
A court recently overturned a Nebraska law that let the state’s governor force property owners to accept the pipeline. As a result, TransCanada may have to seek permission from individual landowners on the route.
So far, the company has spent $2.2 billion U.S. on the $5.4-billion U.S. project. If the U.S. government rejects the line, TransCanada could use some of the materials on other projects, which would limit any potential writedown.
Meanwhile, the company earned $410 million (Canadian), or $0.58 a share, in the three months ended December 31, 2013. That’s up 28.9% from $318 million, or $0.45 a share, a year earlier. Revenue rose 11.6%, to $2.3 billion from $2.1 billion.
The company also raised its quarterly dividend by 4.3%, to $0.48 a share from $0.46. The new annual rate of $1.92 yields 3.9%.
TransCanada is a buy.
