Tuesday, March 20, 2012

TC Pipeline (TCP) 2012 Review


TC Pipelines LP and its subsidiaries acquire, own and manage energy transmission pipeline systems in the US and Canada. 

The partnership has experienced flat earnings over the past five years though that is expected to change substantially this year. In that same period, dividends have increased 5% annually and return on equity has averaged 10-15%. The company should continue to expand moderately as a result of:

(1) it is a key player in the Western Canada gas transmission market for which thee is robust demand,

(2) acquisitions,

(3) its low debt to equity ratio provides financial flexibility for future acquisitions.

Negatives:

(1) difficulty in finding attractive acquisition candidates,

(2) its cash distributions are subject to future operating performance,

(3) subject to possible changes in energy regulations.

TCP is rated A by Value Line, carries a 25% debt to equity ratio and the stock yields 6.7%.

Statistical Summary

Stock YieldDividend Growth RatePayout Ratio # Increases Since 2003
TCP6.7%3%99%7
IND6.56114NA



Debt/EquityROEEPS Down Since 2003 Net MarginValue Line Rating
TCP25%13%37%A
IND10917NA7NA

Chart

Note: TCP stock made good progress off its November 2008 low, quickly surpassing the down trend off its April 2007 high (red line) and the November 2008 trading high (green line). The stock is in a long term up trend (straight blue lines). The wiggly blue line is on balance volume, TCP is on the High Yield Buy List; shares will be Bought at the open this morning. The lower boundary of its Sell Half Range is $67.




http://finance.yahoo.com/q?s=TCP


Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.