TC Energy Offers Attractive Dividend Yield Amid Inflation Concerns

TC Energy's stock price has dropped 15% from its 12-month high, offering income investors a chance to buy in at a discount. The company trades near $85 per share and offers a dividend yield above 4%. The decline is largely due to concerns about inflation and potential interest rate hikes by central banks.

The European Central Bank has already raised its interest rates, and markets are betting that the US and Canadian central banks will follow suit. Rising borrowing costs could negatively impact pipeline companies like TC Energy that rely on borrowed funds for capital projects.

However, TC Energy also benefits from rising demand for natural gas in both domestic and international markets. The company operates a significant network of pipelines and storage facilities in North America, making it well-positioned to capitalize on growing demand for energy infrastructure.

The company's current capital program is running at an annual pace of $5 billion to $6 billion, which should drive growth in cash flow and support ongoing dividend increases. TC Energy has raised its dividend every year for the past 26 years.