Topic: How To Invest

The Successful Investor Hotline – Friday, March 17, 2017

Article Excerpt

TRANSCANADA CORP., $61.20, Toronto symbol TRP, operates a 90,300-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. The company also operates oil pipelines, and has stakes in 20 power plants across Alberta, Ontario, Quebec and the U.S. Northeast. This week, TransCanada announced it has signed new contracts with natural gas shippers guaranteeing them space on the company’s main pipeline between Alberta and eastern Canada. Due to central Canada’s increasing use of cheaper gas from the U.S., TransCanada’s main line now operates below capacity. As a result, the new contracts cut the company’s tolls by around 40%. That should make it easier for shippers to compete with U.S. suppliers. In exchange for the lower tolls, TransCanada’s clients have committed to 10-year contracts with minimum daily volume requirements. They can opt out after five years. The new deals help cut the company’s risk; the additional cash flows should let it raise its annual dividend rate by 8% to 10% each…