This High-Yield Stock Likes Fossil Fuels Better Than Solar

Two years ago, TransCanada (NYSE: TRP) unveiled a bold plan to grow its lucrative dividend. After securing a 13 billion Canadian dollar ($10.1 billion) backlog of high-return growth projects, the company believed it had the fuel needed to increase its payout by an average annual rate of 8% to 10% through 2020, which was an acceleration from its previous growth rate of 7%. That said, after securing several more growth projects and buying a fast-growing natural gas pipeline company in the U.S., that backlog is up to more than CA$24 billion ($18.7 billion), which the company now believes will fuel dividend growth toward the upper end of its guidance range.

However, that increased backlog means the company will need more money to finance expansion. One of the sources it has tapped into is its renewable energy portfolio, which it has been selling off. In doing so, TransCanada seems to be making it clear that fossil fuels will continue powering its 4% yielding dividend and driving growth. 

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Source: Fool.com