Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 18 May 2026
TRP· Energy
TC Energy
TC Energy is a 93,300 km pipeline backbone with regulated cash flows, but a 5.6x net-debt/EBITDA load and razor-thin 2.2x interest coverage put any margin of safety on hold.
Buffett fit
Weak fit
Owner
42
Durability
58
Management
44
Price
40
Score updated 22 Oct 2026 · analysis from 18 May 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Energy stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Holding all of TC Energy for a decade means inheriting a fortress of right-of-way and a debt stack of 2.25x equity that will not shrink quickly.
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Pipelines are durable physical assets, the Mainline will still be moving gas in 2036.
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Share count grew 1.7% annually as TC Energy issued equity to fund pipeline builds, the opposite of the discipline Buffett looks for.
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At a of 28.5 and owner-earnings yield of 2.1%, the market is pricing TRP as if the regulated rate base will keep without incident.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 45.8% reflects classic midstream toll-road economics
- 293,300 km pipeline network is essentially irreplaceable at current cost
- 3Net income positive in all of the past five years through commodity cycles
- 45-year EPS CAGR of 15.0% off a depressed base
Concerns
5- 1Net debt of 5.57x EBITDA is high even by midstream standards
- 2Interest coverage of only 2.23x leaves no buffer for rate shocks
- 35-year average of 3.1% is well below Buffett's 12% bar
- 4Market cap vs retained earnings of -3.68 signals value destruction over 5 years
Price history
$61.98+25.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
TC Energy moves roughly a third of North America's natural gas through 93,300 kilometers of pipe across Canada, the US, and Mexico, with an of 45.8% reflecting the toll-road economics of regulated midstream. The five-year average of just 3.1% reveals the catch: those tolls sit atop an enormous, capital-hungry asset base. Operating margins are scenic, but returns on the capital deployed to build the pipe network look pedestrian. The business throws off cash, yet conversion of only 58.6% means a large chunk is reinvested into maintaining and growing the network.
What other investors would say
The same company, judged by three other documented playbooks.
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