Q: Hi All,
I have recently bought TRP and it has been falling ever since. I don't know whether I should continue to hold on to it and hope that this downward trend will reverse itself or sell and move on to something with more momentum?
Will the completion of the Keystone Pipeline inspire some upward movement in the stock? Also is the dividend safe?
Thanks for your valued opinion.
Jane
I have recently bought TRP and it has been falling ever since. I don't know whether I should continue to hold on to it and hope that this downward trend will reverse itself or sell and move on to something with more momentum?
Will the completion of the Keystone Pipeline inspire some upward movement in the stock? Also is the dividend safe?
Thanks for your valued opinion.
Jane
5i Research Answer:
We think the key word here is 'recently'. Stocks do need to be given some time to perform and will not always work out right away. TRP is not perfect and not our favourite, but it is priced well at 12X earnings. It is 'only' down 3% this year, so with the dividend more or less break even. The TSX is up about 5%. Dividend payout is a bit less than 50% and we have no particular concerns on the dividend. Growth is fairly low, and cost overuns on projects have annoyed investors. But with these eventual project completions investor angst should settle down. Lower interest rates may also help the stock. Now owned, we would be OK giving this a bit of time.