Is it a good company at a reasonable price? I must say that I do worry about the DPR and the large debt. However, I will continue to hold this stock. If you look at the chart for this stock you will see it is at an all-time high. I think that the stock price is currently relatively expensive.
I own this stock of TC Energy Corp (TSX-TRP, NYSE-TRP0). When I bought this stock, it was on Mike Higgs' Canadian Dividend Growth Stock list and the other dividend lists that I followed. I bought the stock in 2000 at an opportune time. The company had been cutting their dividend payments in order to re-organize and get the company into shape for long term profitability. This company’s stock fell hard because of this. People who depend on dividends for their income can be an unforgiving lot and can get really upset at company when a trusted company cuts its dividends.
When I was updating my spreadsheet, I noticed I have a total return of 10.81% per year for this stock with 5.66% from capital gains and 5.15% from dividends. This utility also has high DPRs and debt. I also note that Money Sense has not had this stock on their 100 Best Canadian Stock since 2023.
If you had invested in this company in December 2015, for $1,029.09 you would have bought 26 shares at $41.16 per share. In December 2025, after 10 years you would have received $684.18 in dividends. The stock would be worth $1,889.50. Your total return would have been $2,573.68. This would be a total return of 11.24% per year with 6.26% from capital gain and 4.97% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $41.16 | $1,029.09 | 25 | 10 | $684.18 | $1,889.50 | $2,573.68 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 3.98%. The 5 year median dividend yield is good (5% to 6% ranges) at 5.35%. The 10 year and historical median dividend yields are moderate at 4.80% and 4.14%. The dividend increases are low (below 8% per year) at 4.4% per year over the past 5 years. The last dividend increase was in 2026 and it was for 3.24%. There was also another increase at the beginning of 2026 for 3.34%. So far this year, dividends are up around 6.5%.
The Dividend Payout Ratios (DPR) are mainly high. The DPR for 2025 for Earnings per Share (EPS) is too high at 97% with 5 year coverage at 138%. The DPR for 2025 for Funds from Operations (FFO) is good at 44% with 5 year coverage at 52%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is too high at 96% with 5 year coverage at 90%. The DPR for 2025 for Cash Flow per Share (CFPS) is high at 45% with 5 year coverage at 47%. The DPR for 2025 for Free Cash Flow (FCF 1) is too high at 137% with 5 year coverage at 380%. The DPR for 2025 for Free Cash Flow (FCF 2) is too high at 169% with 5 year coverage at 161%. Analysts do see the DPR for Earnings getting better in the future.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 97.19% | 138.49% |
| FFO | 43.86% | 52.04% |
| AEPS | 96.08% | 90.19% |
| CFPS | 44.72% | 46.53% |
| FCF 1 | 136.99% | 380.04% |
| FCF 2 | 168.52% | 160.82% |
Debt Ratios could be improved and debt is high. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.58 and currently at 0.49. The Liquidity Ratio for 2025 is far too low at 0.63 and 0.63 currently. If you added in Cash Flow after Dividends, the ratios are still low at 1.02 and currently at 1.05. If you add back in the debt due this year and handled, the Ratio for 2025 is still low at 1.41 and 1.45 currently. I like to see Liquidity Ratios of 1.50 or higher. The Debt Ratio for 2025 is low at 1.45 and 1.45 currently. I like to see Debt Ratios of 1.50 or higher. The Leverage and Debt/Equity Ratios for 2025 are low at 3.22 and 2.22 and currently at 3.22 and 2.22. I like to see these ratios below 3.00 and 2.00.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.58 | 0.49 |
| Intang/GW | 0.17 | 0.14 |
| Liquidity | 0.63 | 0.63 |
| Liq. + CF | 1.02 | 1.05 |
| Liq. + CF + D | 1.41 | 1.45 |
| Debt Ratio | 1.45 | 1.45 |
| Leverage | 3.22 | 3.22 |
| D/E Ratio | 2.22 | 2.22 |
The Total Return per year is shown below for years of 5 to 37 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 4.36% | 15.49% | 9.90% | 5.59% |
| 2015 | 10 | 6.79% | 11.24% | 6.26% | 4.97% |
| 2010 | 15 | 6.27% | 9.81% | 5.35% | 4.47% |
| 2005 | 20 | 6.03% | 8.02% | 4.17% | 3.85% |
| 2000 | 25 | 6.58% | 11.90% | 6.73% | 5.17% |
| 1995 | 30 | 4.60% | 9.41% | 5.08% | 4.33% |
| 1990 | 35 | 5.10% | 8.71% | 4.63% | 4.08% |
| 1988 | 37 | 4.86% | 9.39% | 4.98% | 4.41% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 18.21, 20.27 and 22.49. The corresponding 10 year ratios are 17.85, 19.63 and 21.17. The corresponding historical ratios are 13.11, 14.94 and 17.30. The current ratio is 22.44 based on a stock price of $88.15 and EPS estimate for 2026 of $3.93. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 12.99, 15.30 and 18.32. The corresponding 10 year ratios are 13.14, 15.53 and 18.56. The corresponding historical ratios are 14.87, 17.32 and 19.25. The current ratio is 24.02 based on a stock price of $88.15 and AEPS estimate for 2026 of $3.67. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $44.35. The 10-year low, median, and high median Price/Graham Price Ratios are 0.97, 1.16 and 1.38. The current ratio is 1.99 based on a stock price of $88.15. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.92. The current ratio is 3.70 based on a Book Value of $24,796M, Book Value per Share of $23.82 and a stock price of $88.15. The current ratio is 92% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate for 2026 of $24.78. This analyst calculates the Book Value differently that I do and, in this case, the 10 year median ratio is 1.70. The current ratio is 3.56 with a Book Value of $25,792M, Book Value per Share of $24.78 and a stock price of $88.15. The current ratio is 85% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 7.75. The current ratio is 11.80 based on Cash Flow per Share estimate for 2026 of $7.47, Cash Flow of $7,775M and a stock price of $88.15. This current ratio is 52% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 4.14%. The current dividend yield is 3.98% based on dividends of $3.51 and a stock price of $88.15. The current ratio is 3.8% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 4.80%. The current dividend yield is 3.98% based on dividends of $3.51 and a stock price of $88.15. The current ratio is 17% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 4.41. The current P/S Ratio is 5.66 based on Revenue estimate for 2026 of $16, 206M, Revenue per Share of $15.57 and a stock price of $88.15. The current ratio is 28% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is probably expensive. I would rate it as a Hold. The 10 year dividend yield test says that the stock price is relatively reasonable but above the median. At 17% below the 10-year median ratio it is getting near expensive. The P/S Ratio test says that the stock price is relatively expensive. Other testing puts the stock price as expensive except for the historical median dividend yield test.
When I look at analysts’ recommendations, I find Strong Buy (6), Buy (6), Hold (9), Underperform (2), and Sell (1). The consensus is a Buy. The 12 months stock price consensus is $87.65 with a high of $101.00 and low of $68.00. The 12 month consensus stock price of $87.65 implies a Total Return of $3.41% with a capital loss of 0.57% and dividends of 3.41% based on a current stock price of $88.15.
There are two entries on Stock Chase for 2026 and they both are Holds. Puja Tayal on Motley Fool says to find opportunity amid Trade Tensions. She also mentions this company has gone oil free. Sneha Nahata on Motley Fool say this company is a reliable Canadian energy stock that wins when oil spikes and holds up when prices weaken. The company put out a Press Release about its fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and thinks it is overvalued. They have two warnings of interest payments are not well covered by earnings; and dividend of 4.06% is not well covered by earnings or free cash flows.
TC Energy operates natural gas transmission assets across North America. Segments are determined by country of operation, but both Canadian and US operations are interconnected. Mexican operations are disconnected from the US and only have one customer, the state utility CFE. They also operate power generation assets, with the largest being the Bruce Power nuclear plant. Its web site is here TC Energy Corp.
The last stock I wrote about was about was Enbridge Inc (TSX-ENB, NYSE-ENB) ... learn more. The next stock I will write about will be AltaGas Ltd (TSX-ALA, OTC-ATGFF) ... learn more on Monday, April 6, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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