TC ENERGY CORP (TRP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TRP - CA87807B1076 - Common Stock
56.92 USD
+0.6 (+1.07%)
We assign a fundamental rating of 3 out of 10 to TRP. TRP was compared to 207 industry peers in the Oil, Gas & Consumable Fuels industry. TRP has a medium profitability rating, but doesn't score so well on its financial health evaluation. TRP is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- TRP had positive earnings in the past year.
- In the past year TRP had a positive cash flow from operations.
- In the past 5 years TRP has always been profitable.
- Each year in the past 5 years TRP had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of TRP (2.82%) is comparable to the rest of the industry.
- Looking at the Return On Equity, with a value of 12.35%, TRP is in the better half of the industry, outperforming 70.53% of the companies in the same industry.
- With a Return On Invested Capital value of 3.97%, TRP is not doing good in the industry: 63.28% of the companies in the same industry are doing better.
- Measured over the past 3 years, the Average Return On Invested Capital for TRP is significantly below the industry average of 21.94%.
| 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
- The Profit Margin of TRP (27.28%) is better than 85.51% of its industry peers.
- TRP's Profit Margin has improved in the last couple of years.
- TRP has a better Operating Margin (44.41%) than 89.86% of its industry peers.
- In the last couple of years the Operating Margin of TRP has remained more or less at the same level.
- TRP has a better Gross Margin (69.05%) than 76.81% of its industry peers.
- 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TRP is destroying value.
- The number of shares outstanding for TRP remains at a similar level compared to 1 year ago.
- The number of shares outstanding for TRP has been increased compared to 5 years ago.
- TRP has a better debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.66, we must say that TRP is in the distress zone and has some risk of bankruptcy.
- TRP has a worse Altman-Z score (0.66) than 62.32% of its industry peers.
- The Debt to FCF ratio of TRP is 31.45, which is on the high side as it means it would take TRP, 31.45 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of TRP (31.45) is comparable to the rest of the industry.
- A Debt/Equity ratio of 2.13 is on the high side and indicates that TRP has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 2.13, TRP is doing worse than 80.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 31.45 | ||
| Altman-Z | 0.66 |
ROIC/WACC0.51
WACC7.77%
2.3 Liquidity
- TRP has a Current Ratio of 0.63. This is a bad value and indicates that TRP is not financially healthy enough and could expect problems in meeting its short term obligations.
- TRP has a worse Current ratio (0.63) than 75.85% 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 Quick ratio of 0.56. This is in the lower half of the industry: TRP underperforms 75.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
- TRP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -32.89%.
- 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.
- TRP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.77% yearly.
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.
- The Revenue is expected to grow by 2.71% on average over the next years.
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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
- TRP is valuated quite expensively with a Price/Earnings ratio of 25.52.
- The rest of the industry has a similar Price/Earnings ratio as TRP.
- The average S&P500 Price/Earnings ratio is at 27.25. TRP is around the same levels.
- The Price/Forward Earnings ratio is 20.61, which indicates a rather expensive current valuation of TRP.
- The rest of the industry has a similar Price/Forward Earnings ratio as TRP.
- TRP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.52 | ||
| Fwd PE | 20.61 |
4.2 Price Multiples
- 68.12% of the companies in the same industry are cheaper than TRP, based on the Enterprise Value to EBITDA ratio.
- TRP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.65 | ||
| EV/EBITDA | 16.67 |
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 4.48%, TRP is a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 3.73, TRP pays a bit more dividend than its industry peers.
- TRP's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.48% |
5.2 History
- On average, the dividend of TRP grows each year by 13.09%, which is quite nice.
- TRP has paid a dividend for at least 10 years, which is 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 FAQ
Can you provide the ChartMill fundamental rating for TC ENERGY CORP?
ChartMill assigns a fundamental rating of 3 / 10 to TRP.
What is the valuation status for TRP stock?
ChartMill assigns a valuation rating of 2 / 10 to TC ENERGY CORP (TRP). This can be considered as Overvalued.
How profitable is TC ENERGY CORP (TRP) stock?
TC ENERGY CORP (TRP) has a profitability rating of 6 / 10.
What is the earnings growth outlook for TC ENERGY CORP?
The Earnings per Share (EPS) of TC ENERGY CORP (TRP) 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) is 5 / 10 and the dividend payout ratio is 110%.