TransCanada PipeLines Limited 6 (TCPA) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+270.8%

$74.37

vs $20.05 price

Levered DCF

$15.59

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

0.37

Distress zone

Rating

—

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2019	FY2018	FY2017	FY2016	FY2015	FY2014	FY2013	FY2012
P/E	7.48×	8.6×	8.97×	82.27×	-23.28×	12.04×	11.12×	13.56×
P/B	0.97×	1.04×	1.08×	0×	1.44×	1.05×	0.98×	0.99×
P/S	2.29×	2.31×	2×	0×	2.36×	2.16×	2.22×	2.27×
EV / EBITDA	8.52×	10.23×	10.43×	10.72×	29.18×	8.87×	10.32×	9.81×
Gross margin	48.1%	43.8%	38.2%	37.8%	37.2%	37.3%	38.0%	37.4%
Operating margin	42.5%	39.4%	34.0%	33.5%	32.6%	32.7%	33.0%	31.8%
Net margin	31.9%	28.1%	23.4%	2.5%	-10.1%	18.0%	20.2%	17.0%
Current ratio	0.59×	0.4×	0.47×	0.8×	0.84×	0.76×	0.87×	0.65×
Debt / equity	1.64×	1.71×	1.74×	2.16×	1.91×	1.39×	1.36×	1.21×
Interest coverage	2.2×	2.31×	2.23×	2.2×	2.59×	2.67×	2.73×	2.49×
Dividend yield	6.6%	5.7%	5.5%	0.0%	5.4%	6.1%	7.7%	6.9%
Payout ratio	47.3%	46.7%	47.3%	502.2%	-126.2%	73.2%	84.3%	91.8%

Key metrics by fiscal year

Metric	FY2019	FY2018	FY2017	FY2016	FY2015	FY2014	FY2013	FY2012
Return on equity	13.5%	12.6%	12.6%	1.5%	-6.2%	8.7%	8.9%	7.4%
Return on invested capital	5.1%	5.0%	5.7%	3.2%	5.8%	4.0%	4.1%	4.1%
Return on assets	4.2%	3.7%	3.7%	0.4%	-1.7%	3.0%	3.2%	2.8%
Free cash flow yield	-0.7%	-9.0%	-6.6%	0.0%	0.9%	2.4%	-4.2%	5.2%
Earnings yield	13.9%	12.2%	11.7%	0.0%	-4.3%	8.3%	9.1%	7.5%
Enterprise value	$60.7B	$58.7B	$55.3B	$34.3B	$43.8B	$43.6B	$43.3B	$40B
Net debt / EBITDA	5.31×	6.35×	6.37×	10.72×	16.37×	4.98×	5.91×	5.34×
Cash conversion cycle (days)	-83	-63	-40	-36	64	74	121	46