Earn better returns with these utilities

Article Excerpt

Investors fear that rising interest rates will boost the appeal of bonds and hurt the shares of these high-yielding utility stocks. However, bond investors have to treat interest payments they receive as regular income. As a result, they pay higher taxes on their income compared to dividend payments from Canadian firms that qualify for a tax credit. Moreover, these utilities get most of their cash flow from regulated businesses, which lets them keep raising those shareholder dividends. TC ENERGY CORP. $63 is a buy. The company (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 984.0 million; Market cap: $62.0 billion; Price-to-sales ratio: 4.5; Dividend yield: 5.7%; TSINetwork Rating: Above Average; www.tcenergy.com) operates a 93,300-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. Its other operations include 4,900 kilometres of crude oil pipelines and seven power plants. The company is building the 670-kilometre Coastal GasLink pipeline, which will pump natural gas from northeastern B.C. to a..