Right now is the perfect time to buy TransCanada stock...
TransCanada Corp. (NYSE: TRP) is a Canadian pipeline company transporting oil and natural gas across North America that is also expanding into Central and South America.
It's most famous for its KeystoneXL pipeline, which connects Canadian oil producers to major hubs in the United States, but the pipeline is just one part of the company's overall strength...
The KeystoneXL Will Be Completed
TransCanada's pipelines transport 20% of Canada's oil exports to the United States, and it's getting a boost with the new KeystoneXL pipeline.
In late March, U.S. President Donald Trump approved a permit that allowed the TransCanada's Keystone XL pipeline to be completed after years of delays.
The resuscitation of Keystone XL is a big win for TransCanada, which initially applied for a permit from the U.S. Department of State a decade ago.
The Keystone XL is a pipeline extending roughly 1,180 miles from Alberta, Canada, to the Gulf Coast in the United States. Its location in Alberta is near the Athabasca oil sands.
When completed, the pipeline will be able to bring over 800,000 barrels of heavy crude oil from Canada to the Gulf Coast refineries.
While the oil pipeline dominates the news, TransCanada is actually a leader in natural gas transportation...
TransCanada Dominates with Natural Gas
TransCanada pipelines move 25% of all the natural gas used in North America. Even more importantly, it has the capacity - 653 billion cubic feet worth - to take on even more.
That's important, because natural gas production is about to soar.
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The Energy Information Administration (EIA) forecasts that the production of natural gas will skyrocket this year, rising by 471%.
Additionally, TRP is moving heavily into Mexico, adding five new pipelines to transport natural gas in Mexico, an investment of $3.5 billion.
The pipelines and capacity will help drive the expected doubling of Mexican production of natural gas, which is slated to happen by 2020.
While TRP stock is a great buy thanks to its connection to growing sectors in oil and gas, there's an even better reason to own the stock...
The Best Reason to Buy TRP Stock
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TransCanada is an extremely well managed and profitable energy company, and it's at a great buying point right now. TRP stock earned a Money Morning VQScore™ of 4.75, our highest score, indicating an excellent buying opportunity.
When you buy a stock like TRP, you're purchasing its profits, its potential, its debts, and its future strategy. That's why it's crucial to find companies with serious growth prospects that know how to make money and reward shareholders.
And TransCanada made a profit of $7.6 billion last year.
That huge profit wasn't by accident. Its profit margin was an incredible 33.76%. That's more than 100% higher than the average S&P 500 company's profit margin. And it's a sign that TransCanada is a well-managed company. It operates a lucrative business model and keeps its costs low.
At the current share price of $42.65, the company's price/earnings (P/E) ratio stands at only 16.15. You're only paying 16 times its earnings, which is a great deal on a profitable company like this. Investors in the average S&P 500 stock are paying more like 26 times earnings.
And many of those companies aren't turning a profit, let alone turning the impressive profits of TRP.
In addition, if you buy TransCanada stock, you'll get an impressive dividend. Its $2.20 per share dividend currently yields more than 5% - double the average yield on an S&P 500 stock.
That's money deposited directly into your account, boosting your profits from just owning the stock.
The company has also indicated a plan to raise dividends by 10% each year for the next three years.
TransCanada has steadily increased its dividends for 18 consecutive years. That alone is a sign of stability and commitment to shareholders, backed up by assets totaling $86 billion.
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