TC Energy (TRP.TO)

Doesn’t think they are as dependent or hopeful about the KXL pipeline as they would have been 4 or 5 years ago. If that does come through, that will certainly be good for the stock. They continually add to and improve their base of assets and are the primary pipeline facility through Canada. Currently selling at 20X current year’s expected earnings which is fairly expensive. Yield of about 3.8%.

Just reported. Getting closer to full value at this time. Thinks returns are in the high single digits. If it were to run another $3, he would probably Sell his holdings.

Owned for quite a while because of the promise of Keystone, which is a disappointment, but in the meantime they came up with lots of other promising projects, so he still likes it. The market is not ascribing much value to keystone. If it comes through it is a nice bonus.

Even without Keystone, they have tremendous growth. If you include Keystone, they have $30 billion of secured projects over the next 5 years. Believes they will grow their earnings by at least 7% a year. Also, the dividend should be increasing at least 5% year if not higher.

When you get as big as this, you have to take on larger and larger projects to move the dial. Keystone project has been delayed for quite a long time. The industry has now reworked itself so it is not dependent on this. She prefers smaller companies that are just operating in one province.

They have a pipeline already that is improving deliverability into the Gulf. They have $30 billion worth of potential expansion. Nice stable revenue stream. 4% yield, which is growing.

Which pipeline company would you pick for a long-term hold? All his clients own TransCanada Corp (TRP-T) and some also own Enbridge (ENB-T). Enbridge has been the better performer in recent years. TransCanada has been hurt by the uncertainty over the Keystone XL. Because of its other projects and its got investments in the electricity business, TransCanada is a good long-term hold. Both of them are worth continuing to hold.

A great Buy at these levels. Expects their EBITDA’s to double between now and 2020, if they get all the regulatory approvals. Best in class company for contract duration and counter party risks. Still cheap, probably because of Keystone. Trade at about 8.4% pre-cash yield over 2014 estimates versus their peers at around 7.2%. 30% of revenues are in US$ which should be a bit of a power kicker for them as well.

2018 preferreds. It is a fine company, relatively safe. You are more exposed to interest rates than pipelines. It is low risk. You are going to get your dividend payment and your principle at maturity.

Just finished building a pipeline from Cushing Oklahoma. US reversed the flow of oil about 9 months ago, sending everything South and shipping it off shore. This company is going to benefit and will be transferring about 700,000 barrels a day, and eventually ramp up to 1.2 million. They are also participating in the Keystone.

(A Top Pick Dec 14/12. Up 7.39%.) Not the most attractive stock to be in right now. You have the tapering influence. Longer-term, for the more conservative investor, this is fine. You are going to have a lot of growth with all the infrastructure going on. As long as interest rates don’t shoot up too high, you’re going to be fine.

Prefers smaller pipelines that operate within certain provinces. This is a huge one which has a lot of political issues and red taping to go through when they are building pipelines across provinces and countries. Prefers Inter-Pipeline (IPL-T).

(Top Pick Nov 2/12, Up 9.35%) Has a great growth profile ahead of it. Keystone is not in the price because investors have given up. If it sells off for a day or two, then that is an opportunity.

Have done a really good job in the last couple years of diversifying away from Keystone. Pretty attractive slate of some small to medium-size projects. Just announced a deal with the LDCs in Eastern Canada, which help to alleviate some of the problems with the mainline. Valuation is attractive relative to its peers. Has the potential to see some strong, sustained growth in earnings and dividends. Yield of 3.9%.

A lot of pipelines are getting a little stretched. This one is cheap, trading at 8.6X 2014 free cash flow yield. They have so many projects going that even if Keystone doesn’t happen, there is not much downside for it at these levels.