TransCanada Corp. plans to double its dividend growth rate through 2017.
About $13-billion in small to medium-sized projects scheduled to come online in the next five years will let TransCanada increase its dividend by 8 to 10 per cent each year, from 4-per-cent increases currently, the Calgary-based company said Wednesday in a presentation.
"We do understand the importance our shareholders place on a strong, stable, growing dividend," chief executive officer Russ Girling said at the company's annual investor meeting today in Toronto. "Our view is not to be lumpy in our dividend increases."
The $8-billion Keystone XL pipeline is among $46-billion in planned projects. The pipeline, which would ship crude from Canada's oil sands to the U.S. Gulf Coast, has stalled since it was proposed in 2008 amid concerns that it will worsen climate change and pose a risk to water supplies. A U.S. Senate effort to force the approval of Keystone XL came up one vote short yesterday.
"While the messaging of an increase is in line with what we believe the market expected, actually getting some definition is a good step forward that we believe will positively impact the share price," Robert Kwan, an analyst at RBC Capital Markets in Vancouver, said today in a note.