TRANSCANADA CORP. $51.57 - Toronto symbol TRP

TRANSCANADA CORP. $51.57 (Toronto symbol TRP; Shares outstanding: 707.5 million; Market cap: $36.0 billion; TSINetwork Rating: Above Average; Dividend yield: 3.7%; www.transcanada.com) operates 68,500 kilometres of natural gas pipelines in Canada and the U.S. It also has interests in over 11,800 megawatts of power generation, including the Bruce Power nuclear plant.

In the three months ended December 31, 2013, TransCanada’s revenue rose 11.6%, to $2.3 billion from $2.1 billion a year earlier. Earnings per share rose 28.9%, to $0.58 from $0.45.

The company completed $6.1 billion worth of projects in 2013, and it has $38 billion of additional projects secured by long-term contracts scheduled for completion by 2018. That includes a further $3.2- million investment in the proposed Keystone XL pipeline, which would pump crude oil from Alberta to Steele City, Nebraska.

TransCanada has raised its dividend annually for the past 14 years. It just raised its quarterly payout by 4.3%, to $0.48 a share from $0.46. The new annual rate of $1.92 yields 3.7%.

The stock trades at 21.4 times the $2.41 a share that TransCanada should earn this year. As with Enbridge, that’s a high multiple for a utility stock, but it’s still reasonable in light of TransCanada’s strong growth prospects.

TransCanada is a buy.

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