What happened

Shares of TC Energy (NYSE:TRP) were up a blistering 49.3% in 2019, according to data provided by S&P Global Market Intelligence. The energy company well outpaced the S&P 500, which rose an impressive 28.9% for the year. 

Here's a look at what fueled the Canadian pipeline giant's outperformance. 

Oil pipelines over a sunset.

Image source: Getty Images.

So what

TC Energy accomplished a lot last year. Its cash flow was up about 14% through the third quarter as it benefited from recently completed growth projects. Overall, the company expected to place 10 billion Canadian dollars' ($7.7 billion) worth of expansions into service during 2019 as part of a CA$30 billion ($23 billion) program. It also made progress on extending its growth by securing CA$3.2 billion ($2.5 billion) of new projects, and continued to advance more than CA$20 billion ($15.3 billion) of ongoing projects. 

The company also took significant steps to strengthen its financial profile. TC Energy sold CA$6.3 billion ($4.8 billion) of mature assets. It also secured funding for its Coastal GasLink Pipeline project and sold a 65% stake in the project to global investment firm KKR and Alberta Investment Management Corp. Because of that, TC Energy expects to be able to self-fund growth in the future via the cash that remains after it pays its dividend and incrementally reduces its debt, all while maintaining its targeted credit metrics. 

As a result, management is increasingly confident that it will be able to increase the company's dividend -- which currently yields 4.3% -- at an 8% to 10% compound annual rate through 2021, and by 5% to 7% after that. So the stock looks set to keep rewarding income-focused investors. 

Now what

Last year was exceptional for TC Energy as its shares rallied thanks to the strength of its financial results and operations. That rally, however, drove its valuation up and its yield down, especially compared to its peers. Because of that, it's not quite as attractive an investment opportunity as some other pipeline stocks these days.