Will TransCanada (TRP) Stock Receive A Boost From Latest Canadian Pressure On U.S. Over Oil Pipeline?

NEW YORK (TheStreet) -- Shares of TransCanada Corp.  (TRP) closed flat today in heavy trading volume and are slightly lower in after-hours trading.

Canada is reportedly in talks with the U.S. on renewable energy and other plans to curb greenhouse gas emissions in an effort by Ottawa to secure White House approval for the Keystone XL oil pipeline, according to the Financial Times.

Canada's minister of natural resources, Greg Rickford, told the Times the two countries were in talks about "alignment" on clean energy, pipeline safety and other issues aimed at overcoming U.S. political and public opposition.

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TheStreet Ratings team rates TRANSCANADA CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRANSCANADA CORP (TRP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 3.1%. Since the same quarter one year prior, revenues rose by 28.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $979.00 million or 38.66% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 17.43%.
  • 43.34% is the gross profit margin for TRANSCANADA CORP which we consider to be strong. Regardless of TRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TRP's net profit margin of 15.08% compares favorably to the industry average.
  • TRANSCANADA CORP's earnings per share declined by 7.9% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TRANSCANADA CORP increased its bottom line by earning $2.42 versus $1.84 in the prior year.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 5.6% when compared to the same quarter one year ago, dropping from $461.00 million to $435.00 million.
  • You can view the full analysis from the report here: TRP Ratings Report

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