Energy stocks have been in high demand this year, with oil prices rising due to the ongoing conflict in Iran. While oil and gas stocks are normally reliable options for dividend investors, this year, they've also been rising sharpy in value.
Canadian pipeline giant TC Energy (TSX:TRP)(NYSE:TRP) is a prime example of that, with its shares rising by 26% since January. Its gains over the past 12 months now total 40%. The stock has been rallying particularly well of late, recently making a crossover, with its 20-day moving average climbing above its 50-day moving average. The bullish trend can potentially result in more buying from technical analysts, as these types of crossovers can sometimes lead to a stock hitting new heights.
Not only has TC Energy's stock reached a new 52-week high recently, but it's also hit a new all-time high due the excitement around oil and gas stocks. While momentum has been hot around TC Energy, the stock is now looking expensive, trading at a price-to-earnings multiple of 29, which is a bit rich for the dividend stock.
TC Energy still offers a high payout, but with its rapid increase in share price, its yield has now fallen to 3.6%, which is lower than usual. The stock can be a dependable long-term dividend investment to put in your TFSA, but it may be tough for the stock to continue to rise higher from here on out, given its inflated valuation. For long-term investors, the safest option may be to wait for a dip in value before buying shares of TC Energy.
