TC Energy Corporation (TRP) — Expensive With Poor Growth Indicators
TC Energy shares moved -20.0% over the last 52 weeks, with a high of $49.51 and a low of $32.52. During this time, the stock lagged the S&P 500 index by -29.0%. As of April 2023, the company's 50-day average price is $35.29. TC Energy Corporation operates as an energy infrastructure company in North America. The large-cap Utilities company has 7,477 full time employees and is based in Calgary, Canada. TC Energy has returned a 10.8% dividend yield over the last 12 months, but this may not be sustainable seen the company's record of negative cash flows.
The Company's Revenues Are Declining:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $13,679 | $13,255 | $12,999 | $13,387 | $14,977 | $14,977 |
| Gross Margins | 36% | 44% | 45% | 23% | 38% | 38% |
| Operating Margins | 42.0% | 50.0% | 52.0% | 30.0% | 24.0% | 24.0% |
| Net Margins | 27.0% | 33.0% | 38.0% | 15.0% | 5.0% | 5.0% |
| Net Income (MM) | $3,702 | $4,433 | $4,913 | $2,046 | $785 | $785 |
| Net Interest Expense (MM) | $2,265 | $2,333 | $2,228 | $2,360 | $2,588 | $2,588 |
| Depreciation & Amort. (MM) | $2,350 | $2,464 | $2,590 | $2,522 | $2,584 | $2,584 |
| Earnings Per Share | $3.92 | $4.27 | $4.74 | $1.86 | $0.64 | $0.64 |
| Diluted Shares (MM) | 903 | 931 | 940 | 974 | 996 | 996 |
| Free Cash Flow (MM) | -$4,374 | -$1,702 | -$1,842 | -$244 | -$2,586 | -$2,586 |
| Capital Expenditures (MM) | $10,929 | $8,784 | $8,900 | $7,134 | $8,961 | $8,961 |
| Net Current Assets (MM) | -$62,792 | -$59,231 | -$61,626 | -$63,399 | -$72,900 | $0 |
| Long Term Debt (MM) | $36,509 | $50,564 | $51,652 | $55,105 | $60,020 | $0 |
TC Energy's Valuation Is in Line With Its Sector Averages:
Compared to the Utilities sector's average of 22.89, TC Energy has a trailing twelve month P/E ratio of 54.3 and, according to its EPS guidance of $2.94, an expected P/E ratio of 12.0.
The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -26.1%. On this basis, the company's PEG ratio is -2.08, which indicates that its shares are overpriced.
The market is giving TC Energy a fair value in terms of its book value, since its P/B ratio of 1.12 is lower than the sector average, which stands at 1.03.
TC Energy Has No Average Rating Visible In Our Data:
7 analysts are following TC Energy and have set target prices ranging from $28.0 to $71.9 per share. On average, they have given the company a rating of hold. At the current price of $35.29, TRP is trading -17.8% away from its average analyst target price of $42.92 per share, implying an analyst consensus of strong upside potential for the stock. The company's biggest shareholder is Royal Bank of Canada with a 10% stake in the company worth $3,508,820,774.
