TC ENERGY CORP (TRP.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:TRP - CA87807B1076 - Common Stock
77.11 CAD
+1.28 (+1.69%)
TRP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 214 industry peers in the Oil, Gas & Consumable Fuels industry. TRP scores excellent on profitability, but there are concerns on its financial health. TRP has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year TRP was profitable.
- In the past year TRP had a positive cash flow from operations.
- In the past 5 years TRP has always been profitable.
- TRP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- With a decent Return On Assets value of 2.82%, TRP is doing good in the industry, outperforming 68.22% of the companies in the same industry.
- With an excellent Return On Equity value of 12.35%, TRP belongs to the best of the industry, outperforming 85.05% of the companies in the same industry.
- TRP has a Return On Invested Capital (3.97%) which is in line with its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for TRP is below the industry average of 6.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.82% | ||
| ROE | 12.35% | ||
| ROIC | 3.97% |
ROA(3y)2.24%
ROA(5y)2.58%
ROE(3y)9.37%
ROE(5y)9.55%
ROIC(3y)4.35%
ROIC(5y)4.58%
1.3 Margins
- TRP has a Profit Margin of 27.28%. This is amongst the best in the industry. TRP outperforms 89.72% of its industry peers.
- In the last couple of years the Profit Margin of TRP has grown nicely.
- With an excellent Operating Margin value of 44.41%, TRP belongs to the best of the industry, outperforming 93.46% of the companies in the same industry.
- TRP's Operating Margin has been stable in the last couple of years.
- With an excellent Gross Margin value of 69.05%, TRP belongs to the best of the industry, outperforming 84.58% of the companies in the same industry.
- In the last couple of years the Gross Margin of TRP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 44.41% | ||
| PM (TTM) | 27.28% | ||
| GM | 69.05% |
OM growth 3Y-1.61%
OM growth 5Y-0.76%
PM growth 3Y35%
PM growth 5Y2.15%
GM growth 3Y-0.69%
GM growth 5Y-0.74%
2. Health
2.1 Basic Checks
- TRP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, TRP has about the same amount of shares outstanding.
- Compared to 5 years ago, TRP has more shares outstanding
- The debt/assets ratio for TRP has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.65, we must say that TRP is in the distress zone and has some risk of bankruptcy.
- TRP has a Altman-Z score of 0.65. This is comparable to the rest of the industry: TRP outperforms 54.21% of its industry peers.
- TRP has a debt to FCF ratio of 31.45. This is a negative value and a sign of low solvency as TRP would need 31.45 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 31.45, TRP is in line with its industry, outperforming 56.07% of the companies in the same industry.
- A Debt/Equity ratio of 2.13 is on the high side and indicates that TRP has dependencies on debt financing.
- TRP's Debt to Equity ratio of 2.13 is on the low side compared to the rest of the industry. TRP is outperformed by 75.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 31.45 | ||
| Altman-Z | 0.65 |
ROIC/WACC0.52
WACC7.6%
2.3 Liquidity
- A Current Ratio of 0.63 indicates that TRP may have some problems paying its short term obligations.
- TRP has a Current ratio of 0.63. This is in the lower half of the industry: TRP underperforms 62.15% of its industry peers.
- A Quick Ratio of 0.56 indicates that TRP may have some problems paying its short term obligations.
- TRP has a worse Quick ratio (0.56) than 61.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
- The earnings per share for TRP have decreased strongly by -32.89% in the last year.
- Measured over the past years, TRP shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.06% on average per year.
- Looking at the last year, TRP shows a very negative growth in Revenue. The Revenue has decreased by -25.33% in the last year.
- Measured over the past years, TRP shows a small growth in Revenue. The Revenue has been growing by 0.77% on average per year.
EPS 1Y (TTM)-32.89%
EPS 3Y-4.48%
EPS 5Y-2.06%
EPS Q2Q%-25.24%
Revenue 1Y (TTM)-25.33%
Revenue growth 3Y0.95%
Revenue growth 5Y0.77%
Sales Q2Q%-9.28%
3.2 Future
- The Earnings Per Share is expected to grow by 3.33% on average over the next years.
- Based on estimates for the next years, TRP will show a small growth in Revenue. The Revenue will grow by 2.71% on average per year.
EPS Next Y-5.65%
EPS Next 2Y0.77%
EPS Next 3Y1.89%
EPS Next 5Y3.33%
Revenue Next Year-3.6%
Revenue Next 2Y1.19%
Revenue Next 3Y1.77%
Revenue Next 5Y2.71%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 25.20, the valuation of TRP can be described as expensive.
- Compared to the rest of the industry, the Price/Earnings ratio of TRP indicates a somewhat cheap valuation: TRP is cheaper than 61.22% of the companies listed in the same industry.
- TRP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 20.36, the valuation of TRP can be described as rather expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as TRP.
- TRP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.2 | ||
| Fwd PE | 20.36 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as TRP.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of TRP indicates a somewhat cheap valuation: TRP is cheaper than 60.75% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.14 | ||
| EV/EBITDA | 16.49 |
4.3 Compensation for Growth
- The decent profitability rating of TRP may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y0.77%
EPS Next 3Y1.89%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.50%, TRP is a good candidate for dividend investing.
- TRP's Dividend Yield is a higher than the industry average which is at 2.82.
- TRP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.5% |
5.2 History
- The dividend of TRP is nicely growing with an annual growth rate of 13.09%!
- TRP has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)13.09%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 110.00% of the earnings are spent on dividend by TRP. This is not a sustainable payout ratio.
- The dividend of TRP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP110%
EPS Next 2Y0.77%
EPS Next 3Y1.89%
TC ENERGY CORP / TRP.CA FAQ
Can you provide the ChartMill fundamental rating for TC ENERGY CORP?
ChartMill assigns a fundamental rating of 4 / 10 to TRP.CA.
What is the valuation status for TRP stock?
ChartMill assigns a valuation rating of 3 / 10 to TC ENERGY CORP (TRP.CA). This can be considered as Overvalued.
How profitable is TC ENERGY CORP (TRP.CA) stock?
TC ENERGY CORP (TRP.CA) has a profitability rating of 7 / 10.
What is the earnings growth outlook for TC ENERGY CORP?
The Earnings per Share (EPS) of TC ENERGY CORP (TRP.CA) is expected to decline by -5.65% in the next year.
Can you provide the dividend sustainability for TRP stock?
The dividend rating of TC ENERGY CORP (TRP.CA) is 5 / 10 and the dividend payout ratio is 110%.