TC Energy Corporation (NYSE:TRP) is priced at 21.19 times what analysts expect it to earn next year. Nothing in the business looks broken. What a buyer must decide is whether a steady business deserves that.
The stock closed at $61.74 on October 16. It has returned 1.5% over the last 6 months, compared to a 10.5% return for the Insider Monkey Billionaire Index and 9.3% for the State Street SPDR S&P 500 ETF Trust.
What a buyer gets today is a natural gas transmission business running across Canada, the United States, and Mexico, with power generation alongside it. The crude oil pipelines went to South Bow in 2024.
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What the Price Is Paying For:
An operating margin of 44.25% is strong for midstream and a good deal better than the businesses that buy and resell rather than simply move. The gas it carries generates more American electricity than any other fuel. That makes the volumes durable rather than fast-growing, since gas supplies the largest share of the country’s power while that share slowly slips.
The latest quarter brought 18.00% earnings growth on revenue that rose 5.70%, so profit is moving faster than sales. The debt runs to 170.37% of equity, middling for a pipeline. It also came down in the split, because the liquids business left carrying debt of its own.
TC Energy is one of the ten in our 10 Best Pipeline and MLP Stocks to Buy According to Hedge Funds, and one of only three where fund ownership rose last quarter. To see the rest, click HERE.
What Is Left Exposed:
With the oil pipelines gone, there is no second commodity system to average out a weak year in gas.
The volumes themselves depend on something the company does not set. They follow how much gas North America burns, and that is decided by the region’s power demand and LNG exports rather than TC Energy.
A quieter limit sits behind both. The return this business makes on its own equity is unexceptional, so extra capacity has to be paid for out of new money. That competes with the dividend on a balance sheet already carrying what it does.
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Full Price for Steady Rather Than Fast:
A 21.19x multiple asks a lot of a business whose revenue rose at mid-single digits last quarter. What softens that is the 4.01% yield, which arrives whether or not the multiple moves. A buyer collects something while the market makes up its mind.
The judgement comes down to whether steady volumes and a dividend are worth paying more than the growth rate alone would justify. Being paid to wait is the whole case for much of this sector. 9 Best Energy Dividend Stocks to Invest In Now has the names where that income is the reason to own them.
Conclusion:
The price asks more than the revenue growth alone would justify, and the margin and the dividend are what close the gap. The borrowings are ordinary for the industry and smaller than before the split, so the balance sheet is not what a buyer is taking a view on. What a buyer does not get is the cushion that two different commodity systems once gave each other, so a bad year in gas has nothing to offset it. Watch power demand rather than the oil price, because that is what this company is attached to now.
Market Sentiment:
TC Energy Corporation was held by 34 hedge funds with a combined stake value of about $1.52 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 33 hedge fund holders in the previous quarter.
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This article is originally published at Insider Monkey.
