Topic: How To Invest

The Successful Investor Hotline – Friday, March 23, 2018

Article Excerpt

TRANSCANADA CORP., $52.52, Toronto symbol TRP, operates a 91,500-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. Other operations include 4,800 kilometers of crude oil pipelines and 11 power plants. The stock has dropped roughly 15% since the start of 2018. That’s partly because higher interest rates in Canada and the U.S. will make it more expensive for the company to finance its new projects. As well, U.S. regulators recently eliminated a tax break for pipeline operators. TransCanada owns its U.S. pipelines directly, as well as through its 25.7% stake in affiliate TC PipeLines LP (New York symbol TCP). However, the ruling does not apply to negotiated tolls, which account for about half of TransCanada’s U.S. gas pipeline revenue. The company expects that figure will rise to 65% in 2019 as new pipeline projects begin operating. As a result, TransCanada expects the new rules will little impact on its earnings. Meantime, the company still plans to increase its…