So have TC Energy shares been beaten down enough yet?
- Second largest pipeline company in Canada (by market cap)
- Trading at or near a 13 year low (below the low of the Great Recession 2020)
- Trading Central shows stock is currently undervalued by 31%
- Paying just shy of an 8% dividend
- Coastal Gaslink 98% complete with full completion by year end
- Additional asset sales pending to further lower debt
- Technicals are showing this stock is at or very near a low
With an average analyst 12 month target price of $56.75 CAD (a low target of $50.00 and high of $64.00) why is this stock trading at $45.40 as of this moment? Well that's a really good question that would seem to defy logic. The algos are certainly having a hey day with stocks like TRP and BCE.
Using the "Rule of 72", with TRP paying an 8% dividend and assuming we are now at or near a share price low, investors double their money in 9 years and that's not counting any share price appreciation over that 9 years or when the algos turn and decide it's time for the stock to move up!
For the less optimistic out there who believe TRP shares will not appreciate at all from here in 9 years, and maybe even see a 50% drop in share price from here, that's still about a 50% return in 9 years or about 5.5% a year with dividend accumulation over this time period. Personally, I don't see a further 50% decline is shareprice from here in 9 years, but more likely a 50% increase!
Can the share price keep going lower, of course it can but if you have an investment time horizon longer than a few hours or a few weeks it's hard to not start chipping away at this price.
My opinion only, please DYODD.
HB77