Assessing TC PipeLines LP’s (NYSE:TCP) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how TC PipeLines is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its oil and gas industry peers. Check out our latest analysis for TC PipeLines
How TCP fared against its long-term earnings performance and its industry
I prefer to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to analyze different companies on a more comparable basis, using new information. For TC PipeLines, its most recent bottom-line (trailing twelve month) is US$219.00M, which, relative to the previous year’s level, has grown by a fairly subdued 3.79%. Given that these figures are somewhat myopic, I have determined an annualized five-year value for TCP’s net income, which stands at US$141.18M This means that, generally, TC PipeLines has been able to steadily grow its bottom line over the last couple of years as well.How has it been able to do this? Let’s take a look at whether it is only attributable to industry tailwinds, or if TC PipeLines has experienced some company-specific growth. The rise in earnings seems to be driven by a robust top-line increase outstripping its growth rate of costs. Though this brought about a margin contraction, it has made TC PipeLines more profitable. Inspecting growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 26.82% in the prior year, . This is a change from a volatile drop of -8.77% in the past couple of years. This means that, in the recent industry expansion, TC PipeLines has not been able to realize the gains unlike its industry peers.
What does this mean?
Though TC PipeLines’s past data is helpful, it is only one aspect of my investment thesis. While TC PipeLines has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research TC PipeLines to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for TCP’s future growth? Take a look at our free research report of analyst consensus for TCP’s outlook.
- 2. Financial Health: Is TCP’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.