TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 699.5 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. TransCanada also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear facility in Ontario, and the Ravenswood facility, which serves New York City.
TransCanada has spent about $10 billion of the $20 billion it has set aside for new growth projects. It will spend the remaining $10 billion over the next two years. Its biggest project is the Keystone pipeline, which it is building in three phases.
Keystone’s first phase is now pumping crude oil from Alberta to refineries in Illinois. The second phase will extend to Oklahoma, and should be ready in 2011. The third phase, called Keystone XL, will pump oil to refineries in Texas. U.S. environmentalists and politicians have criticized this project. Even so, TransCanada aims to finish Keystone XL by the end of 2013.
The company has already signed contracts with oil shippers for 83% of Keystone’s capacity. These deals have an average term of 18 years. That cuts the risk of this investment.
In addition to Keystone, TransCanada will build new gas-fired power plants in Ontario and Arizona. As well, it plans to refurbish reactors at the Bruce plant, and build new wind farms.
Once these new businesses are operating, the company expects its annual cash flow to rise to $4 billion from $3.3 billion in 2010.
TransCanada trades at 17.3 times its projected 2011 earnings of $2.26 a share, and 9.1 times its likely cash flow of $4.30 a share. These are reasonable multiples in light of its new projects’ strong long-term potential.
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Privacy Policy and Terms of Use
The Successful Investor Inc. and its affiliate Successful Investor Wealth Management (referred to hereafter as TSI Network) know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly. This notice describes our privacy policy. By visiting websites owned by or associated with TSI Network, you are accepting the practices described in this Privacy Policy.
This privacy policy is applicable to all TSI Network Visitors, Clients, Employees, Suppliers, Web sites, Management, and all other interested parties. Any links to or from our site are not covered by this policy. We encourage you to read the privacy policies of every site that you visit.
The privacy of the site/store visitor is very important to TSI Network, and is respected at all times. The information we receive from customers helps us to personalize and continually improve your online experience at TSI Network.
We do not collect or disclose personal information, except when it is provided to us voluntarily by the site/store visitor with their consent.
We store subscriber and password files containing personal information securely. These files are stored in secure areas that are not accessible to the general public. We are always working to ensure the security of your personal information.
We are continuously in the process of improving our sites and services. If any new features or policies require a change to this current policy, we will post a clear notice of this change on pages of our site where the privacy policy appears. The principle behind this privacy policy is to collect information with your knowledge and consent.
What personal information do we collect?
The information we receive from customers helps us personalize and continually improve your online experience at TSI Network. TSI Network may collect personal information online for all legal purposes, which include, but are not limited to:
Information You Give Us: We receive and store any information you enter on our website or give us in any other way through sign-up forms or ordering forms for publications and services. You can choose not to provide certain information, but then you might not be able to take advantage of many of our services and features. We use the information that you provide for such purposes as responding to your requests, customizing your web browsing experience for you, improving our website, and communicating with you.
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