Ravenswood is a plus for TransCanada

Article Excerpt

TRANSCANADA CORP. $36 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 539.7 million; Market cap: $19.4 billion; SI Rating: Above average) has agreed to buy the Ravenswood power plant located in Queens, New York for $2.9 billion U.S. The plant has the capacity to service 21% of New York City’s peak electricity load. The price is 10% more than TransCanada’s 2007 cash flow of $2.6 billion or $4.95 a share. TransCanada will probably issue $1.2 billion worth of new common shares to help pay for this purchase. The acquisition provides diversification in power generation and into the U.S. market. TransCanada should also profit from rising power demand in New York. TransCanada is a buy. buy…