Editor’s Note: Please see our analysis of the latest news from our other Dividend Champions in the Portfolio Update section following the article below.

When it comes to the Keystone XL pipeline, TransCanada Corp. (TSX: TRP, NYSE: TRP) won’t go gentle into that good night.

The Canadian pipeline company lobbied the U.S. government for seven years for approval of Keystone, and in the wake of President Obama’s rejection of the project in November, TransCanada now wants its day in court.

On Wednesday, the company announced that it intends to file a claim under the North American Free Trade Agreement (NAFTA) that the Obama administration’s decision was “arbitrary and unjustified.”

The company has also filed a lawsuit in the U.S. Federal Court in Houston, Texas, asserting that the president’s denial exceeded his authority under the Constitution.

TransCanada clearly hopes to recoup some of the money it’s already invested in the project, especially considering that it will be taking a write-down estimated to range between C$2.5 billion and C$2.9 billion on its fourth-quarter financials. From a shareholder standpoint, that’s already priced into the company’s stock.

TransCanada hopes to recover as much as US$15 billion in costs and damages through NAFTA. That number is derived not just from the money the firm has already invested in the project, but also from the estimated value of the project had it been completed.

Meanwhile, the company’s suit against the U.S. government is aimed at overturning the president’s ruling, thereby allowing it to proceed with constructing the pipeline.

As investors, we’d love to see TransCanada get another bite at the apple, whether that comes from finally building the pipeline or winning back some of what it’s lost via NAFTA.

But as with all things Keystone thus far, this process will be long and drawn out. The company expects at least several years of legal wrangling.

Regardless of the merits, does TransCanada have any hope of success in these venues?

The Center for Strategic & International Studies’ exhaustive review of investor-state dispute settlements around the world suggests that a win under NAFTA would be more akin to a moral victory than a monetary one. The study found that when investors prevail in such disputes, the awards are typically a tiny percentage of the initial claim, averaging less than 10 cents on the dollar.

And when the focus narrows to NAFTA, the U.S. has a nearly undefeated track record—it’s lost just one of 14 trade appeals filed.

Meanwhile, past lawsuits challenging presidential rulings on permits have generally been decided in favor of the government.

The courts have said the president has the power to rule on these matters based on the office’s Constitutional authority to conduct foreign policy.

As Reuters notes, however, these lawsuits were mostly on procedural grounds rather than the Constitutional case that TransCanada is making. But while the federal suit could set new precedents for legal geeks to mull over, it may not do enough for TransCanada.

But TransCanada has another path to victory on Keystone that could occur far sooner than any legal outcome, and with greater odds of success: The U.S. presidential election.

All five of the top Republican candidates are favorably disposed toward Keystone.

And while Democratic frontrunner Hillary Clinton recently said she’s opposed to Keystone, that announcement came late enough in the game to suggest that her stance is more informed by political marketing than ideology.

Still, sometimes that’s all that matters, especially if environmentalists spend heavily on Clinton’s campaign.

But overall, a closely divided U.S. electorate means that TransCanada’s best odds are at the ballot box next November, not through the courts.

The Dividend Champions: Portfolio Update

By Deon Vernooy

The battle to convince the shareholders of Canadian Oil Sands Ltd. (TSX: COS, OTC: COSWF) to accept the offer from Suncor Energy Inc. (TSX: SU, NYSE: SU) is heating up.

In October, Suncor made a bid to acquire the publicly listed shares of Canadian Oil Sands for the equivalent of C$6.6 billion. The offer remains open through today.

The deal, which offers 0.25 Suncor shares for every Canadian Oil Sands share, makes sense from a Suncor perspective, given the relative strength in its own share price compared to Canadian Oil Sands.

Over the past five years, this ratio averaged around 0.6, which indicates that Suncor may have to improve its offer or include some cash to sweeten the deal. However, the energy sector crash may convince shareholders to accept the offer now, rather than hold out for an improved offer that may never come.

The sole operating asset of Canadian Oil Sands is its 36.7% interest in the Syncrude project in which Suncor and Imperial Oil are also stakeholders. Syncrude currently produces around 275,000 barrels of crude oil equivalent per day of which almost half would accrue to Suncor should the deal be concluded. This would add around 20% to the estimated 2015 production for Suncor.

Suncor has a strong balance sheet (25% debt-to-capital ratio), good cash flow, and cash of around $5 billion, putting it in an excellent position to acquire assets in the current depressed energy markets.

In response to the weaker oil price environment, the company has already lowered its capital expenditure plans considerably, reduced operating costs, and cut back on its share repurchase program. This provides some comfort that the dividend should remain safe even if oil prices are lower for longer.

Suncor remains one of the few commodity producers that qualify for inclusion in our Dividend Champions Portfolio. The relatively safe dividend yield is currently 3.3%, and although growth will be limited until oil prices recover, the company’s ability to acquire top assets on the cheap should put it in an enviable position when the cycle finally turns. Our fair value estimate is C$39/US$28.

Canadian National Railway (TSX: CNR, NYSE: CNI) reported an 8.7% drop in carloads for the final quarter of 2015. Sharp declines were seen for coal and metals and minerals, while growth was recorded in the forest product, automotive and intermodal categories. For the full year, carloads dropped by 2.7%.

Revenue ton miles, which measure the weight of the freight multiplied by the distance transported, also declined by 5.4% for the quarter.

While none of this is good news for the company, these data don’t show the full picture. Other important aspects that will be reflected in the financial statements include the pricing applied to the transport of goods, as well as expenses including fuel costs. Both factors should make positive contributions to company results for the full year.

We estimate that Canadian National will earn C$4.34 per share for the full year, which will represent a 13% increase compared to 2014. The dividend should come in at C$1.20 per share, 20% higher than a year ago. Our fair value estimate for the stock is C$76/US$54.