With EPS Growth And More, TC Energy (TSE:TRP) Makes An Interesting Case
March 30, 2025
Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like TC Energy (TSE:TRP). While profit isn’t the sole metric that should be considered when investing, it’s worth recognising businesses that can consistently produce it.
The market is a voting machine in the short term, but a weighing machine in the long term, so you’d expect share price to follow earnings per share (EPS) outcomes eventually. That means EPS growth is considered a real positive by most successful long-term investors. Shareholders will be happy to know that TC Energy’s EPS has grown 29% each year, compound, over three years. If the company can sustain that sort of growth, we’d expect shareholders to come away satisfied.
It’s often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company’s growth. On the one hand, TC Energy’s EBIT margins fell over the last year, but on the other hand, revenue grew. So it seems the future may hold further growth, especially if EBIT margins can remain steady.
You can take a look at the company’s revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
View our latest analysis for TC Energy
Fortunately, we’ve got access to analyst forecasts of TC Energy’s future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don’t know the exact thinking behind their acquisitions.
In the last year insider at TC Energy were both selling and buying shares; but happily, as a group they spent CA$116k more on stock, than they netted from selling it. Although some people may hesitate due to the share sales, the fact that insiders bought more than they sold, is a positive thing to note. Zooming in, we can see that the biggest insider purchase was by Executive VP & COO of Natural Gas Pipelines Tina Faraca for CA$887k worth of shares, at about CA$70.70 per share.
The good news, alongside the insider buying, for TC Energy bulls is that insiders (collectively) have a meaningful investment in the stock. As a matter of fact, their holding is valued at CA$48m. That’s a lot of money, and no small incentive to work hard. Even though that’s only about 0.07% of the company, it’s enough money to indicate alignment between the leaders of the business and ordinary shareholders.
If you believe that share price follows earnings per share you should definitely be delving further into TC Energy’s strong EPS growth. Furthermore, company insiders have been adding to their significant stake in the company. Astute investors will want to keep this stock on watch. What about risks? Every company has them, and we’ve spotted 2 warning signs for TC Energy you should know about.
The good news is that TC Energy is not the only stock with insider buying. Here’s a list of small cap, undervalued companies in CA with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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