TRANSCANADA CORP. $56.86 - Toronto symbol TRP

TRANSCANADA CORP. $56.86 (Toronto symbol TRP; Shares outstanding: 708.0 million; Market cap: $40.8 billion; TSINetwork Rating: Above Average; Dividend yield: 3.4%; www.transcanada.com) is facing pressure from U.S.-based activist investors to unlock some of its value by selling or spinning off its electrical
power plants.

These investors also want the company to place more of its U.S. natural gas pipelines into a master limited partnership, which is similar to a Canadian income trust.

The company feels its current structure is the best way to fund the $38 billion of power projects and pipelines it’s developing. Still, the prospect of a breakup adds to its appeal.

TransCanada is still a buy.

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Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

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Value Stocks

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One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

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