Tc Energy Corp (NYSE: TRP)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001232384
Market Cap 62.22 Bn
P/B 3.13
P/E 25.32
P/S 5.86
ROIC (Qtr) 7.14
Div Yield % 2.99
Rev 1y % (Qtr) 8.71
Total Debt (Qtr) 44.47 Bn
Debt/Equity (Qtr) 2.23

About

Price action

Investment thesis

Bull case

  • Tangible assets of 77.54B provide robust 49.73x coverage of other current liabilities 1.56B, indicating strong asset backing.
  • Operating cash flow of 5.46B provides solid 0.61x coverage of current liabilities 8.91B, showing strong operational health.
  • Operating cash flow of 5.46B provides strong 9x coverage of inventory 606.52M, indicating efficient inventory management.
  • Operating cash flow of 5.46B provides strong 2.12x coverage of operating expenses 2.57B, showing operational efficiency.
  • Cash reserves of 1.31B exceed inventory value of 606.52M by 2.15x, indicating strong liquidity and inventory management.

Bear case

  • Operating cash flow of 5.46B barely covers its investment activities of (5.31B), with a coverage ratio of -1.03, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 5.46B provides thin coverage of dividend payments of (2.62B) with a -2.08 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 1.79B relative to inventory of 606.52M (2.96 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 1.41B provides weak coverage of capital expenditures of 4.05B, with a 0.35 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 5.66B show weak coverage of depreciation charges of 1.95B, with a 2.91 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 110.33 Bn 27.13 2.37 75.15 Bn
2 EPD Enterprise Products Partners L.P. 76.10 Bn 12.98 1.39 33.58 Bn
3 KMI Kinder Morgan, Inc. 68.80 Bn 28.77 4.49 32.58 Bn
4 TRP Tc Energy Corp 62.22 Bn 25.32 5.86 44.47 Bn
5 WMB Williams Companies, Inc. 50.26 Bn -71.19 6.88 27.99 Bn
6 TRGP Targa Resources Corp. 36.23 Bn -86.30 4.92 17.43 Bn
7 OKE Oneok Inc /New/ 35.88 Bn 31.48 3.74 33.73 Bn
8 CQP Cheniere Energy Partners, L.P. 30.34 Bn 27.99 4.44 14.76 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.89 3.64
EV to Cash from Ops. EV/CFO 14.25 35.75
EV to Debt EV to Debt 1.75 -70.28
EV to EBIT EV/EBIT 13.74 14.85
EV to EBITDA EV/EBITDA 11.92 22.44
EV to Free Cash Flow [EV/FCF] EV/FCF 55.03 114.09
EV to Market Cap EV to Market Cap 1.24 2.72
EV to Revenue EV/Rev 7.33 7.62
Price to Book Value [P/B] P/B 3.15 20.25
Price to Earnings [P/E] P/E 25.52 54.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.64 -3.70
Dividend Payout Ratio % Div Payout % (Qtr) 75.70 71.27
Dividend per Basic Share Div per Share (Qtr) 1.79 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 95.31 33.30
Interest Coverage Int. cover (Qtr) 2.43 5.27
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 18.95 -7.43
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -82.22 16,427.94
Dividend Growth (1y) % Div 1y % (Qtr) -50.13 -0.84
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -25.29 -1.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -5.06 -3.58
EBIT Growth (1y) % EBIT 1y % (Qtr) -16.21 -8.36
EBT Growth (1y) % EBT 1y % (Qtr) -25.34 -232.78
EPS Growth (1y) % EPS 1y % (Qtr) -34.43 -43.63
FCF Growth (1y) % FCF 1y % (Qtr) 182.34 -0.90
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.66 -0.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.09 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.28 0.21
Cash Ratio Cash Ratio (Qtr) 0.15 0.80
Current Ratio Curr Ratio (Qtr) 0.63 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 2.23 1.12
Interest Cover Ratio Int Coverage (Qtr) 2.43 5.27
Times Interest Earned Times Interest Earned (Qtr) 2.43 5.27
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 71.70 35.59
EBIT Margin % EBIT Margin % (Qtr) 73.62 27.76
EBT Margin % EBT Margin % (Qtr) 31.41 17.49
Gross Margin % Gross Margin % (Qtr) 67.40 48.68
Net Profit Margin % Net Margin % (Qtr) 23.10 15.46