It’s a good news and bad news sort of situation for Canadian energy stock TC Energy (TSE:TRP) (NYSE:TRP), as reports revealed that one of its pipelines ruptured and caused a wildfire. However, the good news is that this didn’t do near as much damage to share prices as you might think, and they’re down fractionally in Wednesday morning’s trading.
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TC Energy’s NGTL natural gas pipeline runs near Edson in Alberta, and when it ruptured, it prompted a wildfire that set a hefty swath of Canada on fire, about 10 hectares, or roughly, 24.7 acres. But the fire was quickly contained, and now, several investigations are attempting to track down the cause of the fire, the cause of the rupture that started the fire, and anything else they can pin down.
In fact, reports note, there were two wildfires caused as a result of this event, with the first fire connected to gas ignition, and a second fire emerging related to the first. But all seems to be holding at this point, so that’s good news.
Comparatively Low Risk
Some here might think it’s a bad idea to buy in on a company that basically just started a wildfire. But given that this wildfire was contained to an area of less than 30 acres overall and featured no injuries, or much in the way of property damage, it may still prove a safe investment. In fact, with the Bank of Canada likely to cut interest rates later on this year, it may even be a good time to get in. Why? TC Energy—particularly TC Energy Series 2 preferred shares—are offering attractive dividend yields at a comparatively low risk.
Is TC Energy Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TC Energy stock based on five Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 6.52% loss in its share price over the past year, the average TC Energy price target of C$57.92 per share implies 19.21% upside potential.
Is TRP the Right Stock to Buy for Passive Income?
Before you hurry to invest in TRP, think about the following:
TipRanks’ team has built a Smart Dividend Stock Portfolio for investors, and TC Energy is not included. Our portfolio highlights companies that have been hand-picked for their potential to deliver significant passive income for years to come.
