TransCanada (Symbol-TRP)

[scomac]

I bought TRP today at $32.75. I'm quite happy with the dividend. It's higher than I'd get in a money market fund. And now that interest rates have stabilised (I hope ) there may be some upside.

I owned this at the end of the 1990s too. Unlike Scomac and some of the others I bailed when the dividend was cut and the price dropped.

I believe a sight correction is warranted. I can't take any credit for holding TRP when it was really cheap -- cicra 2000. My purchases of TRP this spring are the first I've made in this stock either as a DIYer or with full service brokerage prior to that.

[arnyk]

I sold alot of my interest sensitives in January as the rate hikes began to pick up steam, mostly utilities (TA, TRP and such) and most of my banks (kept small positions in RY and BMO). Good call I suppose, but I'm a bit heavy insurance now. I find that these types of slo/no growth yielders are definately solid, but their balance sheets are really cumbersome. They can handle that of course, but maneuvering is really limited when you carry that much debt. I think companies like TRP should slowly deleverage themselves, then convert into a trust and ride it out. Specifically though it looks like TRP's payout ratio is still very conservative, so maybe there's still some room to grow.

[yielder]

Specifically though it looks like TRP's payout ratio is still very conservative, so maybe there's still some room to grow.

I think so. TRP is more like ENB and FTS than it is like EMA and TA where there is no dividend growth. TA might join the first three but it's still struggling with the transition from regulated to unregulated. At this point, it's a pure yield/no growth play like EMA. ISTM that the first three are developing excellent growth prospects by focusing on linking northern gas and oilsands to mid-West and Western US markets, and in the case of Fortis, diversifying across Canada and internationally as well as outside their historical business in a focused way.

And the balance sheets are not as cumbersome as you might think. There has been monetizing of slow/no growth assets into trusts and utilization of the proceeds to buy newer faster growth assets. Pretty slick actually since the assets sold probably fetched a price greater than their worth given the appetite of the trust market at the time.

[arnyk]

And the balance sheets are not as cumbersome as you might think. There has been monetizing of slow/no growth assets into trusts and utilization of the proceeds to buy newer faster growth assets. Pretty slick actually since the assets sold probably fetched a price greater than their worth given the appetite of the trust market at the time.

I agree, but cumbersome is really subjective, so relative to what I'm used to buying, these companies are "cumbersome". I like to be "nimble" (not day trading nimble, but not getting caught flat footed type nimble). My ideal portfolio situation is ~8 stocks making up 80%, and a nice 20% cash position, with margin available to dip. Right now I'm actually as leveraged as I can get, and I'm not very happy. There are a couple stocks that hit my buy range, but I haven't been able to move. So yeah, not very happy, but I know I made the right decision to leverage up on 20% yielding trusts.

[yielder]

[url=https://www.ratingsdirect.com/Apps/RD/controller/ArticleCM]On April 4, 2007, Standard & Poor's Ratings Services revised its outlook on Calgary, Alta.-based TransCanada PipeLines Ltd. (TCPL) to stable from negative. At the same time, Standard & Poor's also revised its outlook on subsidiaries ANR Pipeline Co. and NOVA Gas Transmission Ltd. Standard & Poor's affirmed its ratings, including the 'A-' long-term corporate credit rating, on TCPL and its subsidiaries.

A major expansion at Bruce Power, the company's partially owned investment in Ontario-based nuclear power, constrains the ratings. This subsidiary is proceeding on a project that will restart two dormant units at the Bruce Power nuclear facility. It also provides power price guarantees and floors that will significantly bolster its earnings stability. Nevertheless, we believe that the C$4 billion expansion (of which TCPL is responsible for half) involves significant construction risk due to the high historic incidence of cost overruns on nuclear projects. That portions of this project have never been undertaken before amplifies our concerns. To date, the project appears to be proceeding favorably but we still believe there is significant potential for material cost overruns. Our ratings accordingly incorporate some tolerance for cost overruns on this project.

TCPL's balance sheet is highly leveraged, with the high level of cash flow stability providing an offset. We expect that funds from operations (FFO) interest coverage will continue to exceed 3x, FFO-to-total debt will exceed 15%, and debt-to-capital will remain at about 60%. High leverage levels relate to the large proportion of pipeline assets (which can tolerate higher leverage levels) on the company's balance sheet. Given that TCPL intends to structure its balance sheet to maintain its current ratings, we expect that any major acquisitions would continue to involve a significant equity component.[/url]

[6pac]

With the acquisition of ANR, TransCanada expects the transaction to be accretive to earnings and cash flow in the first full year of ownership. The total purchase price is US$3.4 billion.
Maybe some of these additional earnings could cover Bruce, if required.

[zaman]

TRP trading lower in the last few days, is the threat of higher interest rates creating a potential buying opportunity? Anyone looking at this right now?

[sydney2]

I would buy it at this price, dividend is almost 3.6%. Disclosure...I already own it with average price of $29.00, and this is one that I would feel comfortable adding to, for the long hold.

[AltaRed]

I bought some TRP late last week at $36.55.

[Taggart]

I've looked at both TRP and Enbridge since last week's minor market hiccup. I'm not interested, yet.

[investor99]

TRP is still expensive IMO.

[sydney2]

Bought some additional shares of TRP today @36.80. I decided a few weeks ago when I missed the downward trend that I would buy it under $37.00. It is a long hold.

[mpav]

I like the company, own it and will hold on as well for the long haul. I did get a little concerned with its recently announced JV with Pacific NorthWest, as it seems like it will need additional volume from other parties (their volumes don't make it economical, I think). But I would rather they make strategic investments rather than sit on the side lines (which ENB tends to do).

I will watch for the yeild to climb up over 4% and then probably add to the position.

[Donut]

I live near the Bruce Plant and I watched it being run into the ground by Ontario Hydro and it's miraculous rise from the ashes under the management of Duncan Hawthorne. At first we thought he was too good to be true but, over the past 5 years, he has worked miracles both with the plant and with the employees. He is a very astute operator who seems to turn the most difficult task into a simple one. Cost overruns? Hawthorne doesn't tolerate them. I am told and convinced that he has penalties in every supplier contract and he has ironclad contracts for his product even to the point where the Ontario Government have guaranteed to buy power that they have no transmission lines to carry.

I own TRP and would own a lot more if I felt as secure about it's other operations as I do about Bruce Power.

[arthur]

our Friends in Kincardine have done very well with their Rental Properties, a few years ago they were close to losing them to the Bank, now they need more properties.

[mpav]

Interested if people still find TRP expensive at the 36.50 range.

I have a large position with ACB in the 20-25 range, and am sitting on the sidelines to pick up some with a yield over 4%.

My target is in the 30-33 range, but just revieing some research from a large domesitic firm and the are reconfirming their target today of 41. This firm is actually recommending the energy infrastructure stocks overall in this choppy market.

[AltaRed]

Interested if people still find TRP expensive at the 36.50 range.

Under $36 seems reasonable to me. I have an order in for $35 and change. Missed it by a hair today.

[Shakespeare]

I, too, was tempted today, but would prefer under $35.

[BRIAN5000]

My cost on TRP is $11.20 have no idea what my ACB is. Its hard to buy when its trading so much higher then your last purchase. $33 would yield 4% unless yahoo's figures are wrong.
I'm still pissed at TRP's management saying the dividend is safe and shortly there after hacking it in half. I can't believe Magna can get away with lowering their dividend and hardly a blip.

[mpav]

My cost on TRP is $11.20 have no idea what my ACB is. Its hard to buy when its trading so much higher then your last purchase. $33 would yield 4% unless yahoo's figures are wrong.
I'm still pissed at TRP's management saying the dividend is safe and shortly there after hacking it in half. I can't believe Magna can get away with lowering their dividend and hardly a blip.

ACB is adjusted cost base, and agree it's hard to buy when it is higher, but probably even harder when it is lower.

[investor99]

Maybe it's just me but... I wouldn't touch this one at these levels. $32 would be more like it, but that's based on earnings and not yield.

P/E is still 17, seems high for 8% earnings growth.

[AltaRed]

Maybe it's just me but... I wouldn't touch this one at these levels. $32 would be more like it, but that's based on earnings and not yield.

P/E is still 17, seems high for 8% earnings growth.

I don't disagree but cashing in the dividends for now is a nice way to wait for earnings growth. The question for TRP, as for ENB, is how quickly and how significantly, these pipelines will be investing for transporting oilsands production to the Gulf Coast directly or indirectly, and in TRP's case, how soon (if ever) they win the rights to build both Mac Delta and Alaska gas pipelines. There are huge growth stories there, but granted some of it is well over the horizon yet. You might consider these the wild cards in your blue chip portfolio?

[arthur]

I hold PIF.UN after selling TRP, with a yield of over 9% and another increase in monthly Distributions it is a better fit for me.

[scampbell]

I've been watching PIF.UN, IPL.UN and TRP (I have a full position in ENB). But I am concerned about the 2011 tax implications for the trusts. Are people with trusts planning on selling before 2011? Waiting for a change in Government and maybe a change in taxes on trusts? Riding them through 2011 into corporate structure?

Apologies if this is the wrong place for these questions.

[AltaRed]

Are people with trusts planning on selling before 2011? Waiting for a change in Government and maybe a change in taxes on trusts? Riding them through 2011 into corporate structure?

Probably as many answers as there are investors. Some will ride the distributions to the end point with no exit plan (no plan in place), some will hope for some kind of miracle such as back pedalling by a spineless Liberal gov't (still no plan in place), some are collecting distributions while waiting for a premium on a buyout (a real plan with calculated risk), and some will be happy with the underlying business and will stay on whether the entity remains a trust or reverts to a corporation (business as usual).

Much depends on the quality of the trust - they vary from garbage to robust. If the balance sheet is sound, distributions are moderate and the business model is sustainable, I don't think there is much to worry about. But I don't believe anyone has a good feel for unknown waters.