TC Energy is a leading energy infrastructure company in North America. The company moves more than 25% of natural gas consumed daily across North America.
It changed its name to TC Energy in May 2019, from TransCanada, to better reflect the scope of its operations across North America with critical assets in Canada, the U.S., and Mexico.
It is one of North America’s largest natural gas pipeline networks with premier liquids pipeline systems and one of the largest private sector power generators in Canada.
TC Energy has a diversified portfolio of regulated and long-term contracted assets, storage facilities, and power generation plants. The company operates a safe and stable network of 57,900 miles of natural gas and 3,000 miles of crude oil pipelines. Its pipelines connect major basins to key markets across North America.
The company also operates 4,200 MW of power plants. TC Energy runs five operating businesses in three core geographies – Canadian Natural Gas Pipelines (24% of 2019 EBITDA), US Natural Gas Pipelines (37%), Mexico Natural Gas Pipelines (7%), Liquids Pipelines (23%), and Power & Storage (9%), across the USA (52% of EBITDA), Canada (40%) and Mexico (8%). The company’s asset footprint provides multiple platforms for growth.
Key Investment Data
- Opportunity Score: 67
- Ticker: TSE:TRP
- Sector: Energy
- Industry: Oil & Gas Midstream
- Market Cap: 59.54B
- P/E: 29.65
- Dividend Yield: 5.72%
- Payout Ratio (TTM): 165.20%
- Canadian Dividend Aristocrat: YES
- Chowder Score: Members Only
- Revenue Growth: Members Only
- Dividend Growth: Members Only
- Dividend Growth Fit: 6/10
- Dividend Income Fit: 9/10
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Revenue Growth & Market Exposure
With 70+ years of service, TC Energy has earned itself the reputation of one of North America’s largest natural gas pipeline operators. Its assets have grown to $102 billion from $20 billion in 2000. It has been transforming itself from a predominantly pipeline business into an energy infrastructure company.
TC Energy derives 95% of its EBITDA from natural gas pipelines and the remaining 5% from power and storage. The company has diversified assets with a strong base in advantaged basins and unparalleled connectivity to key markets.
TC Energy’s business is highly diversified by assets, customers, and geographies. It is strategically developing its pipelines connecting major supply basins with growing power generation, industrial, and other key markets. TC Energy’s assets are highly strategic in nature with access to North America’s two most prolific natural gas supply basins.
Its Keystone Pipeline transports nearly one-fifth of Western Canada’s crude oil exports to the U.S. Midwest and Gulf Coast. TC Energy continued to put new long-term contracted and rate-regulated assets into service with ~$5.9 billion of growth projects entering service in 2020.
Given TC Energy’s impeccable record of project completions in time, the company has been able to secure new ones easily, which has led to a strong expansion project pipeline for future growth. The company is trusted nationwide for safe and reliable delivery of energy to millions of people every day.
As one of the leading operators of natural gas assets, TC Energy is in a good position to benefit from the natural gas demand growth outlook in North America. Despite the pandemic, TC Energy’s operating assets have remained largely unimpacted.
You are free to hold TRP on either exchange (TSX or NYSE) since it is a dual listed company. It really depends where you money is and in what currency you want to receive your dividends.
TC Energy has been consistently growing its dividend each year, over the last two decades, increasing it to $3.48 from just $0.80 per share back in 2000. The company announced a 7.4% increase in its dividend for 2021, marking the 21st consecutive dividend increase.
This dividend aristocrat has compounded its dividend growth at more than 9% per annum over the last five years. It has an attractive yield of 5.7% and a payout ratio of 68% currently. TC Energy has maintained an impressive average annual shareholder return of 12% since 2000 and has a record of producing double‐digit average annual total shareholder return in the last two decades.
TC Energy aims at growing its dividend at an average annual rate of 8%-10% through 2021, driven by a strong project pipeline and growth in its diverse business segments. The company’s portfolio underpinned by long‐term contracts with solid counter-parties and a low-risk business model grants enough cash flow visibility. Its EBITDA is poised to deliver an 8% CAGR through 2024.
As a leading energy player in North America, the company stands a good chance to benefit from significant power generation opportunities in the nation. A large portfolio of energy assets, strong future growth projects, and an extensive geographic footprint form a deep moat around TC Energy’s business.
The company continued to make good progress on its $37 billion secured capital program which will further expand its regulated asset base. TC Energy’s regulated and long-term contracted portfolio further grants insulation from the volatility associated with volume throughput and commodity prices. Its capital projects along with its secured capital program should support annual dividend growth of 8%-10% in 2021 and 5%-7% per annum thereafter.
Enbridge, Keyera Corp, Pembina Pipeline, Inter Pipeline Ltd are TC Energy’s leading competitors.
Enbridge is Canada’s largest natural gas distribution provider while Pembina Pipeline is a leading midstream and transportation service provider in North America. Inter Pipeline is an integrated energy infrastructure company in Canada, and Keyera’s integrated business, strategic locations, and large scale differentiate it from peers.
TC Energy’s well-distributed footprint of natural gas pipelines, low‐risk business model and diversified asset base grants it a strong competitive edge over peers.
|TickerKey||Ticker||Company||Sector||Industry||Score||Quote||Market Cap||P/E||FPE||EPS||Yield Raw||Yield||PayoutRatio||Payments||Dividend||Chowder||GrowthRating||IncomeRating||Tollbooth||Ambassador||Achiever||Aristocrat||King||Country||Graph|
|TSE:ENB||ENB||Enbridge||Energy||Oil & Gas Midstream||0.72||49.18||99.62||16.42||16.42||2.52||0.0679||6.79||1.1000||4||3.34||0.1711||6||9||Tollbooth - Unregulated||YES||YES||YES||NO||Canada||1|
|TSE:TRP||TRP||TC Energy||Energy||Oil & Gas Midstream||0.67||60.82||59.54||29.65||29.65||4.33||0.0572||5.72||1.6520||4||3.48||0.1303||6||9||Tollbooth - Unregulated||NO||YES||YES||NO||Canada||1|
|TSE:PPL||PPL||Pembina Pipeline||Energy||Oil & Gas Midstream||0.61||41.24||22.68||0.00||0.00||-0.87||0.0611||6.11||0.0000||12||2.52||0.1102||7||9||Tollbooth - Unregulated||NO||NO||YES||NO||Canada||1|
|TSE:IPL||IPL||Inter Pipeline Ltd||Energy||Oil & Gas Midstream||0.43||19.98||8.58||21.56||21.56||0.78||0.0240||2.40||0.5180||12||0.48||0.0240||2||4||Tollbooth - Unregulated||NO||NO||NO||NO||Canada||1|
|TSE:KEY||KEY||Keyera Corp||Energy||Oil & Gas Midstream||0.49||33.40||7.38||118.57||118.57||0.27||0.0575||5.75||6.8170||12||1.92||0.1093||5||7||Tollbooth - Unregulated||NO||YES||YES||NO||Canada||1|
|TSE:GEI||GEI||Gibson Energy Inc.||Energy||Oil & Gas Midstream||0.44||22.86||3.35||32.68||32.68||0.80||0.0612||6.12||1.9240||4||1.40||0.0712||2||6||Tollbooth - Unregulated||NO||NO||NO||NO||Canada||1|
TC Energy is well-positioned to deliver superior long‐term shareholder returns with a low‐risk business model, diverse asset footprint providing multiple platforms for growth, and financial strength and flexibility.
The company is well-positioned to benefit from the growing natural gas demand as electrical generation, industrial sectors and residential users seek increased use of cleaner-burning fuel for their power needs.
TC Energy should continue its strong performance on the back of legacy assets and contributions from growth projects. The company has a clear dividend growth plan supported by strong assets and continued growth across each of its business lines.