The Motley Fool

Infrastructure Boom: 1 Stable Value Stock Set to Benefit

Image source: Getty Images

TC Energy (TSX:TRP)(NYSE:TRP) operates in three core businesses, which includes natural gas pipelines, liquids pipelines, and power and storage. The company also has a corporate segment consisting of corporate and administrative functions that provide governance, financing, and other support to TC Energy’s business segments. Natural gas pipelines and liquids pipelines are principally comprised of the company’s respective natural gas and liquids pipelines in Canada, the United States (U.S.), and Mexico, as well as TC Energy’s regulated natural gas storage operations in the United States. Power and storage includes TC Energy’s power operations and the company’s unregulated natural gas storage business in Canada.

Valuable assets

The company’s business is made up of pipeline and storage assets that transport, store, or deliver natural gas and crude oil as well as power-generation assets that produce electricity to support businesses and communities across the continent. TC Energy’s vision is to be the leading energy infrastructure company in North America, focused on pipeline and power-generation opportunities where it can develop, a significant competitive advantage.

A big advantage of TC Energy’s natural gas pipeline network is that it transports natural gas from supply basins to local distribution companies, power-generation plants, industrial facilities, interconnecting pipelines, export terminals, and other businesses across Canada, the U.S. and Mexico. In addition to natural gas pipelines, TC Energy owns regulated natural gas storage facilities in the U.S. and is one of the largest providers of natural gas storage and related services to key markets in North America.

Ambitious vision

Further, TC Energy’s power business includes approximately 4,200 MW of generation capacity located in Alberta, Ontario, Québec, and New Brunswick and uses natural gas and nuclear fuel sources. These assets are supported by long-term contracts. It also owns and operates significant amount of non-regulated natural gas storage capacity in Alberta.

Recently, the company developed a vision to be the leading energy infrastructure company in North America. The company’s long-life infrastructure assets cover strategic North American corridors and are supported by long-term commercial arrangements and rate regulation. This helps it to generate predictable and sustainable cash flows and earnings which are the cornerstones of TC Energy’s low-risk business model. Key components of the company’s strategy, support the company’s ability to be competitive, responsible, and innovative. This enhances the value proposition for shareholders and safely deliver the energy people need today and in the future.

Proven capital-allocation model

Decades of experience in the energy infrastructure business, a disciplined approach to project management, and a proven capital-allocation model result in a solid competitive position for TC Energy. The company maintains rigorous governance over TC Energy’s approach to business ethics, enterprise risk management, competitive behaviour, operating capabilities, and strategy development, as well as regulatory, legal, commercial, stakeholder, and financing support.

Also, the company’s low-risk and enduring business model offers the scale and presence to provide essential and highly competitive infrastructure services that enable it to maximize the full-life value of TC Energy’s long-life assets and commercial positions throughout all points of the business cycle.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.