When it comes to investing in Canadian companies, there are multiple strategies to take. One is to buy low and sell high. Another is to invest while the stock has some momentum. These are exactly the two options when considering WELL Health Technologies (TSX:WELL) or TC Energy (TSX:TRP).
WELL stock has been falling further from recent news, with TRP stock climbing higher. So, which is the better buy for investors to consider?
WELL stock
There have been a few headlines for WELL stock lately, including earnings and company changes. During earnings, the company reported record revenue for the fourth quarter and positive earnings per share (EPS). Patient visits reached 1.2 million, which was an 18% increase from the last quarter, and 30% year over year.
The company later announced it would be streamlining its business operations to improve profitability. Now, it’s looking at two new business groups of National Clinics Group and Platform Solutions Group. The former will include Canadian clinic operations, generating $300 million in revenue for 2024. Meanwhile, the latter will include platform technologies, generating about $75 million in revenue.
Yet shares dropped after both sets of news, with earnings missing estimates.
WELL stock hasn’t delved into profit margins, and increased revenue doesn’t mean increased profits. The company has also focused on acquisitions, which can be risky. That being said, WELL stock has seen massive growth and analysts believe it will outperform based on these moves. In fact, some believe investors may be missing out.
TRP stock
Then there’s TRP stock, which has also been hitting headlines over and over. Most recently this came from the sale of its Portland Natural Gas Transmission System for US$1.1 billion, including assumed debt. This will help the company achieve its debt reduction goals and should happen mid-2024.
This shows that TRP stock is listening to concerns about debt levels, especially as its Coastal GasLink project costs overrun what was originally outlined. So this is a strong strategy.
That being said, it hasn’t been a perfect ride. The company recently shut down the Keystone oil pipeline from operational problems. This 622,000 barrel-per-day pipeline is now having more issues after a 2022 spill. Yet there has yet to be any comments by the company.
This recent shut down could provide a long-term opportunity, however, with investors seeing this as a temporary issue. Selling assets as well could eventually include Keystone as the stock continues to focus on natural gas, a strong long-term play.
Even so, there is a mixed picture right now for TRP stock. Operational issues, debt concerns, and a shift towards natural gas could all be reasons to avoid. Even with shares up right now.
Bottom line
As for me, I’m leaning towards WELL stock instead of TRP stock. Those operational issues seem concerning in the short term, and could send the stock lower after climbing. Meanwhile, WELL stock looks like a basement bargain that shouldn’t be ignored. And the recent splitting of the business could allow for more opportunities for growth. So I’d stick it out for a real deal on the TSX today.
