TC Energy (TSX:TRP) is up 30% in 2024. Investors who missed the rally are wondering if TRP stock is still good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and total returns.

TC Energy share price

TC Energy trades near $68 at the time of writing. The stock has been on a wild ride over the past two years, trading near $74 in June 2022 before the sharp increase in interest rates in Canada and the United States sent pipeline stocks on an extended downturn. TC Energy slipped as low as $45 last year but has since rebounded nicely.

The recovery began last fall when market sentiment shifted from fears of more rate increases to expectations of rate cuts in 2024. The rally picked up steam in recent months on the back of rates finally moving lower in both Canada and the United States.

TC Energy, like its peers, uses debt to fund part of its capital program. Pipeline projects can cost billions of dollars and sometimes take years to build. This was the case with TC Energy's 670 km Coastal GasLink project, which received the green light in 2018 with an initial budget of about $6.6 billion. The project ran into extended delays and finally reached mechanical completion late in 2023, with a final cost of around $14.5 billion.

TC Energy had to take on extra debt to get the project to the finish line. This is another reason the stock came under pressure in 2022 and 2023. Management has done a good job of monetizing non-core assets to get the balance sheet back in shape. The company also completed the successful spin-off of the oil pipeline business. TC Energy is now in a good position to move forward on the rest of the capital program, which is expected to be about $6 billion annually over the medium term.

Coastal GasLink and Southeast Gateway, another large pipeline project, are scheduled to go into commercial operation in 2025. The revenue from these new assets, along with anticipated cash flow gains from ongoing projects, should support dividend growth in the next few years. TC Energy has increased its dividend annually for more than two decades. Investors who buy the stock at the current level can get a dividend yield of 4.8%.

Risks

A rebound in U.S. inflation is possible next year if the Trump administration follows through with planned tariffs on most goods entering the United States. In that scenario, the U.S. Federal Reserve would likely pause rate cuts or could even be forced to raise rates again, depending on how high inflation goes. This would force the Bank of Canada to slow down its pace of rate cuts, even if more reductions are warranted to support the economy. The central bank can't let the gap between rates in Canada and the U.S. get too wide due to the potential impact on the currency.

If rate cuts stall out in Canada and the U.S., or if rates move higher, TC Energy and other pipeline stocks could face some new headwinds.

Is TC Energy a buy today?

Near-term volatility should be expected. That being said, TC Energy pays an attractive dividend that should continue to grow. If you have a buy-and-hold investing strategy, TRP stock deserves to be on your radar right now. Any meaningful pullback would be an opportunity to add to the position.