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Is TC PipeLines, LP (TCP) a Great Value Stock Right Now?

Zacks Equity Research
Kinder Morgan (KMI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is TC PipeLines, LP (TCP). TCP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.56, while its industry has an average P/E of 14.25. TCP's Forward P/E has been as high as 17.89 and as low as 7.35, with a median of 11.48, all within the past year.

TCP is also sporting a PEG ratio of 1.42. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TCP's industry currently sports an average PEG of 2.10. Over the past 52 weeks, TCP's PEG has been as high as 2.98 and as low as 1.41, with a median of 2.69.

Finally, we should also recognize that TCP has a P/CF ratio of 5.56. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.12. Within the past 12 months, TCP's P/CF has been as high as 11.28 and as low as 4.42, with a median of 6.90.

These are only a few of the key metrics included in TC PipeLines, LP's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TCP looks like an impressive value stock at the moment.


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