• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 11 mins americavchina.com (otherwise known as OilPrice).
  • 2 days Everything you think you know about economics is WRONG!
  • 2 hours Democrats through impeachment process helped Trump go out of China deal conundrum. Now Trump can safely postpone deal till after November 2020 elections
  • 1 day Wallstreet's "acid test" for Democrat Presidential candidate to receive their financial support . . . Support "Carried Interest"
  • 2 hours Forget The Hype, Aramco Shares May be Valued At Zero Next Year
  • 17 hours Natural Gas
  • 7 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 3 hours POTUS Trump signs the HK Bill
  • 1 day 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 23 hours Winter Storms Hitting Continental US
  • 2 days Judiciary impeachment: Congressman says Sean Misko, Abigail Grace and unnamed 3rd (Ciaramella) need to testify.
  • 12 hours My interview on PDVSA Petrocaribe and corruption
  • 1 hour Iraq war and Possible Lies

A Classic Dividend Play That Comes At A Discount

Trading Screen

Maybe it is just the rose-colored glasses with which we look backwards, but it seems to me that there was a time when investing in energy stocks was a lot simpler. The reason was simple: mature companies in the sector generally paid high dividends, and over time a payout in the high single digits smoothes a lot of bumps. High dividends either makes a positive return extremely likely or provide a good source of income to spend or invest elsewhere. Those days, however, are gone. Ten years of ultra-low interest rates in response to the recession and the collapse of oil a few years ago have affected even the normally dividend rich energy sector and yields have fallen precipitously.

Even so, occasionally a dividend paying stock gets hit so hard that the yield climbs to an attractive level. When that happens, investors must decide whether the decline in the stock is potentially terminal or whether it is temporary or cyclical. If the latter, then the dividend payout gives some room to wait for the turnaround and acts as a hedge against the position.

That is the case right now with the pipeline company Trans Canada Corp. (TSX: TRP; NYSE: TRP).

(Click to enlarge)

TRP has, as you can see, had a miserable 2018 so far. That is as a result of a perfect storm of issues. Obviously, the big drop in natural gas prices since the beginning of February hasn’t helped the firm’s prospects but they have also had company specific problems. The now infamous…




Oilprice - The No. 1 Source for Oil & Energy News