Canadian energy giant TransCanada Corporation (TO:TRP) recently agreed to sell 49.3% stake in Iroquois Gas Transmission System LP and the remaining 11.8% stake in Portland Natural Gas Transmission System (“PNGTS”) to pipeline operator TC PipeLines, LP (NYSE:TCP) for $765 million. Notably, TransCanada owns 26% interest in TC PipeLines through its subsidiaries.
We would like to remind investors that TransCanada sold 49.9% interest in PNGTS to TC PipeLines in Jan 2016.
According to TransCanada, the deal will incorporate cash part of $597 million and the rest $168 million will be in the form of debt at Iroquois and PNGTS. The debt in these two pipelines will be proportionate in nature. The company expects the transactions to be over by mid-year.
TransCanada expects the meaningful role of TC PipeLines, in funding part of its short-term capital program of $23 billion, will be confirmed by this deal.
Iroquois is an interstate gas pipeline company that provides services focusing on transportation according to the need of the customers in the energy sector. The company operates in North America.
PNGTS is responsible for interstate gas transportation. It has a high capacity and high-pressure natural gas pipeline. It started serving the growing energy needs of New England in 1999. Presently, the company strategically operates between three major networks in North America, offering significant opportunities to the region's growing energy market.
About the Company
TransCanada mainly focuses on natural gas transmission and power services. Their pipeline transports the majority of Western Canada's natural gas production to growing markets in Canada and the United States. The company is headquartered in Calgary, Alberta.
Price Performance
TransCanada shares have successfully mirrored the Zacks categorized Oil and Gas - Production and Pipelines industry’s performance in the past six months. During this time period, the company’s shares gained 4.26% compared to the industry’s gain of 4.41%.
Zacks Rank and Stocks to Consider
TransCanada presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in oil and energy sector include Alliance Holdings GP, L.P. (NASDAQ:AHGP) and Enerplus Corporation (TO:ERF) . Both these companies sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alliance Holdings is expected to see current quarter sales growth of 3.61% year over year. The partnership had an average positive earnings surprise of 18.04% in the last four quarters.
Enerplus’ year-over-year growth estimate for sales for the current year is 66.12%. The company posted a positive average earnings surprise of 66.67%.
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TC PipeLines, LP (TCP): Free Stock Analysis Report
Alliance Holdings GP, L.P. (AHGP): Free Stock Analysis Report
Enerplus Corporation (ERF): Free Stock Analysis Report
TransCanada Corporation (TRP): Free Stock Analysis Report
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