Breaking Down TC Energy Corporation (TRP) Financial Health: Key Insights for Investors

You're looking at TC Energy Corporation (TRP) and seeing the classic midstream dilemma: rock-solid, regulated cash flow but a massive capital program that keeps the balance sheet stretched. The headline takeaway is that the company's push to de-lever is working, but it's a long game. For the 2025 fiscal year, management has guided to a strong comparable EBITDA of between C$10.8 billion and C$11.0 billion, a clear signal that their core assets are performing, with Q2 2025 comparable EBITDA already up 12% year-over-year. Still, that growth is fueled by a substantial net capital expenditure plan of up to C$6.0 billion, and you can't ignore the approximately $60 billion in net debt. The opportunity lies in the $8.5 billion in capital projects expected to be placed into service this year, which will start generating revenue, plus the strategic pivot to new areas like data center-linked gas-to-power projects. This is defintely a story of execution, where a consistent quarterly dividend of C$0.85 per common share signals confidence, but the debt-to-EBITDA ratio remains the key metric to watch.

Revenue Analysis

You need to understand exactly where TC Energy Corporation (TRP) makes its money, because the company's recent strategic shift has fundamentally changed the revenue mix. The core takeaway is that the natural gas pipeline segments are the clear revenue drivers, and the company is projected to hit a full-year 2025 revenue of approximately $10.46 billion, representing a forecast annual growth rate of 17.1%.

The company's revenue streams are now almost entirely focused on regulated and contracted energy infrastructure, which provides a highly stable, utility-like income stream. This stability is crucial for investors, but it does mean high-growth spikes are unlikely. The primary revenue sources are split across five key segments, with the U.S. Natural Gas Pipelines segment contributing the largest share of the recent trailing twelve months (TTM) revenue ending September 2025.

Here's the quick math on the TTM revenue breakdown, which totaled approximately $10.70 billion (based on a C$14.65 billion TTM revenue converted to USD):

• U.S. Natural Gas Pipelines: Approximately $5.04 billion.
• Canadian Natural Gas Pipelines: Approximately $4.17 billion.
• Mexico Natural Gas Pipelines: Approximately $0.90 billion.
• Power & Energy Solutions: Approximately $0.58 billion.

The year-over-year revenue growth rate is a tricky number right now, so you need to look past the headline figures. While analysts forecast a 17.1% annual revenue growth rate for the 2025-2027 period, some historical TTM reports show a significant decline. This apparent contradiction is due to the company's major strategic move: TC Energy Corporation completed the exit from its oil pipeline business, South Bow, about a year ago to focus on its core natural gas and power portfolio. This divestiture removes a large, non-core revenue stream from the historical comparison, making the continuing operations look smaller, even as the core business is growing.

The shift in revenue streams toward natural gas is defintely a key trend. The company's focus on its extensive network of nearly 58,000 miles of natural gas pipeline is paying off, with the U.S. segment being the largest contributor. New projects are already starting to boost the numbers; the Strategic Gas Pipeline (SGP) is expected to begin service and generate toll revenue in May 2025, and new rate increases on the Columbia network are set to take effect in late 2025. These are concrete drivers for the forecast 17.1% growth. Exploring TC Energy Corporation (TRP) Investor Profile: Who's Buying and Why?

To be fair, the Power and Energy Solutions segment, which includes the Bruce nuclear plant, is a smaller component, contributing only about $0.58 billion to the TTM revenue, but it offers diversification away from pure pipeline transport. The table below shows the segment contribution to the most recent TTM revenue in more detail:

Profitability Metrics

You need to know if TC Energy Corporation (TRP) is converting its substantial revenue into real profit, and the answer is yes-its profitability margins are exceptionally strong, far outpacing many peers in the midstream sector.

The company's business model, which relies on regulated and long-term contracted assets, translates directly into high margins. For the trailing twelve months (TTM) as of late 2025, TC Energy Corporation's margins stood at a formidable Exploring TC Energy Corporation (TRP) Investor Profile: Who's Buying and Why?

• Gross Profit Margin: Approximately 68%.
• Operating Profit (EBIT) Margin: Approximately 43%.
• Net Profit Margin: Approximately 24%.

These margins are a clear sign of the company's structural advantage. That 68% Gross Profit Margin means for every dollar of revenue, 68 cents remain after covering the direct costs of service, which is defintely a high-quality revenue stream.

Operational Efficiency and Margin Trends

The trend in profitability is one of stable, high-quality growth, anchored by predictable cash flows. The company's focus on operational efficiency is evident in its 2025 capital program execution.

Here's the quick math on operational strength: TC Energy Corporation successfully placed approximately C$8 billion of assets into service during the first nine months of 2025, and is tracking those projects at roughly 15% under budget. This capital discipline directly supports margin expansion by lowering the cost base of new revenue-generating assets.

The company's full-year 2025 comparable Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) outlook was raised to between C$10.8 billion and C$11.0 billion. This expected increase of 7% to 9% over 2024's EBITDA shows a clear upward trend in core operating profitability, driven by strong asset utilization across its natural gas pipeline network in Canada, the U.S., and Mexico.

Comparison with Industry Averages

When you compare TC Energy Corporation to its major peers, its profitability ratios are superior, reflecting a premium business model. For instance, a comparison to a large North American peer shows a stark contrast:

What this comparison hides is the stability. TC Energy Corporation's focus on long-term, fixed-fee contracts for its pipeline and power assets shields its Gross Profit Margin from the volatile commodity price swings that can compress the margins of other energy infrastructure companies. This structure allows a much larger percentage of revenue to flow down to operating income and net income. Its operating margin of 43% is a testament to strong cost management (low operating expenses) relative to its high-quality revenue base. This is a regulated utility-like business, not a merchant energy play.

Debt vs. Equity Structure

You're looking at TC Energy Corporation (TRP), a major energy infrastructure player, and the first thing to understand is how they fund their massive asset base. Pipeline and utility companies are capital-intensive, so they defintely rely on debt, but the key is balance. As of the third quarter ending September 2025, TC Energy is leaning heavily on debt financing, which is a trend you need to watch closely.

The company's total debt load is significant. The latest figures show a combined short-term debt and long-term debt (including capital lease obligations) of approximately $44.36 Billion. Here's the quick math: Long-Term Debt stands at about $40.554 Billion, plus Short-Term Debt of $3.802 Billion. This huge number is offset by total stockholders' equity of about $19.853 Billion, but the gap is clear.

This brings us to the financial leverage metric, the Debt-to-Equity (D/E) ratio (total debt divided by total equity). TC Energy's D/E ratio as of September 2025 is 2.23. This means for every dollar of equity capital, the company is using $2.23 in debt to finance its operations and growth. For a capital-intensive sector, a high ratio isn't a red flag by itself, but it does carry risk. For context, the median D/E ratio for U.S. listed pipeline companies (excluding natural gas) in 2024 was around 1.80. TC Energy's ratio is considerably higher than the industry median, indicating a more aggressive financial structure.

TC Energy has been proactive in managing this leverage through a mix of debt and equity maneuvers. For instance, in October 2025, the company issued US$350 million of 6.25% Fixed-for-Life Junior Subordinated Notes. This is a smart move because the proceeds are earmarked to redeem outstanding preferred shares, effectively swapping a form of equity-like financing for long-term, subordinated debt. This strategy helps manage the overall cost of capital and maintains flexibility.

Still, the credit rating agencies are keeping a close eye on their debt-to-cash flow metrics. S&P Global Ratings affirmed TC Energy's 'BBB+' Issuer Credit Rating (ICR) in October 2025 and revised the outlook to Stable from Negative, which is a positive sign of confidence. They project the critical Debt-to-EBITDA ratio to improve to 4.8x in 2025, down from 5.6x in 2022, which shows their deleveraging plan is gaining traction. The company's long-term strategy is to balance their capital structure, which you can read more about in their Mission Statement, Vision, & Core Values of TC Energy Corporation (TRP).

Here's a snapshot of the key financial leverage figures:

• Total Debt (Sep. 2025): $44.36 Billion (Short-term + Long-term)
• Debt-to-Equity Ratio: 2.23
• S&P ICR Rating: BBB+ with a Stable outlook

The action for investors is to monitor the Debt-to-EBITDA ratio; if it stays below the 4.75x threshold S&P is watching, the rating should hold. If they continue to finance their capital program with this high D/E ratio, any unexpected operational hiccup could quickly pressure their credit metrics.

Liquidity and Solvency

You need to know if TC Energy Corporation (TRP) can cover its near-term obligations, and the quick answer is that its liquidity ratios are tight, which is typical for a capital-intensive pipeline business, but its robust operating cash flow provides a strong backstop. We're looking at a company that prioritizes long-term asset growth over a fat current cash cushion.

The latest figures from late 2025 show the company's liquidity position is constrained, but not alarming. The trailing twelve months (TTM) Current Ratio sits at approximately 0.61. This means for every dollar of short-term debt (current liabilities), TC Energy Corporation has only about $0.61 in current assets to cover it. The Quick Ratio is even tighter at around 0.54, which excludes inventory-a defintely low figure, but common in this sector where most assets are long-term property, plant, and equipment.

Here's the quick math on working capital: a current ratio below 1.0 means the company has negative working capital (current liabilities exceed current assets). For a utility-like energy infrastructure firm, this isn't an immediate crisis. They rely on predictable, regulated cash flow to pay bills, not liquidating inventory. Still, this structure means they have little margin for error if a major, unexpected expense hits or if debt markets tighten suddenly.

The real story for TC Energy Corporation is in the cash flow statement, which shows how they fund their massive capital projects. Their operations generate substantial cash, which is the engine for everything else.

• Operating Cash Flow (OCF): Net cash from operations was approximately $1.59 billion (USD) in Q2 2025. The TTM figure through September 2025 was $7.54 billion (CAD). This is the lifeblood, providing the stability needed to manage the negative working capital.
• Investing Cash Flow (ICF): This is consistently negative, reflecting their growth strategy. In Q2 2025, it was a net outflow of about $1.08 billion (USD). Net capital expenditures for the full 2025 fiscal year are expected to be at the low end of the $5.5 billion to $6 billion range. This is a massive investment in future earnings, not a red flag.
• Financing Cash Flow (FCF): This is where the funding for the large capital program is managed. Q2 2025 saw a net outflow of approximately $909.49 million (USD), driven by dividend payments and debt management. Management projects that 80% of the $31 billion required for their three-year funding plan will come directly from operating cash flows.

The key takeaway is that TC Energy Corporation's liquidity is a structural weakness, but its cash generation is a strategic strength. The main liquidity concern isn't day-to-day solvency, but the need to roll over (refinance) their significant short-term debt, especially given the current interest rate environment. This dependency on capital markets is the near-term risk. For a deeper dive into the valuation, you can read the full post here: Breaking Down TC Energy Corporation (TRP) Financial Health: Key Insights for Investors.

To summarize the cash flow dynamics for the first half of 2025 (H1 2025), which is a clearer picture of the trends:

The action for investors is to keep a close eye on the long-term debt-to-EBITDA target of 4.75 times. If that ratio starts creeping up, it signals that their growth is becoming too debt-dependent, which would turn the tight liquidity from a structural feature into a real problem.

Valuation Analysis

You're looking at TC Energy Corporation (TRP) because you need stability and yield in your portfolio, but the valuation metrics can feel contradictory. The direct takeaway is this: TC Energy is currently trading at a premium to its historical average on a Price-to-Earnings basis, suggesting it is fully valued, but the analyst consensus still leans toward a Moderate Buy, seeing significant upside against its average price target.

Here's the quick math on where TC Energy stands as of November 2025. The current stock price of approximately $54.66 is trading near its 52-week high of $55.37, having climbed over 10.19% in the last 12 months. That's a decent run, but it pushes the valuation multiples higher, which is where you need to be cautious.

When we look at the core valuation ratios, the story is mixed:

• Price-to-Earnings (P/E) Ratio: The trailing P/E is high at around 23.04. This is well above the company's historical 10-year average of about 14.3, indicating investors are paying a premium for current earnings. The forward P/E, based on 2025 earnings estimates, is slightly better at 20.45, but still elevated.
• Price-to-Book (P/B) Ratio: At 2.10, the P/B is reasonable for a capital-intensive pipeline and energy infrastructure company. It tells you the market values the company at slightly more than twice the net value of its assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM (Trailing Twelve Months) EV/EBITDA sits at approximately 16.17. For an infrastructure player with stable, contracted cash flows, this is on the higher end of the spectrum, especially considering the 2025 comparable EBITDA is guided to be between $10.7 billion and $10.9 billion.

The high valuation multiples defintely reflect the market's confidence in the company's predictable cash flows-about 95% of its EBITDA comes from regulated assets and long-term contracts. The core risk here is that a high P/E leaves little room for error if they miss on their 2025 earnings per share (EPS) projections, which are expected to be lower than the 2024 figure of $4.27 due to higher interest and depreciation expenses.

The dividend story is a classic utility trade-off. TC Energy recently increased its quarterly dividend to $0.85 per share, which translates to an attractive annualized yield of about 6.2% at the current price. But, you have to look at how they pay for it. The dividend payout ratio is high, sitting at approximately 103.88% of earnings, meaning they are paying out more than they earn in net income. Also, the cash payout ratio is a very high 260.56%, showing the dividend is not well-covered by free cash flow (FCF), which is common for companies with massive capital expenditure programs.

The analyst community views this as a calculated risk, largely giving TC Energy a consensus rating of Moderate Buy. The average one-year price target is around $72.00, suggesting a significant potential upside from the current price. This bullish outlook is driven by the company's secured project backlog of $28 billion and the anticipated growth from new rates taking effect in November 2025. For more on the strategic direction, you should review the Mission Statement, Vision, & Core Values of TC Energy Corporation (TRP).

The table below summarizes the key valuation metrics you should be tracking:

What this estimate hides is the execution risk on that $28 billion project backlog and the ongoing high debt-to-equity ratio of 1.63. Your action here isn't a simple buy or sell; it's about managing the risk of a high-yield, high-debt, premium-priced stock. You are buying future growth, not a bargain.

Risk Factors

You're looking for the unvarnished truth on TC Energy Corporation (TRP), and the reality is that even a utility-like business with 97% of its revenue contracted still faces significant headwinds. The core risk for TC Energy isn't demand-it's the balance sheet and the sheer scale of their capital program. That's the simple truth.

The company's primary financial risk is its substantial debt load. As of late 2025, TC Energy is carrying around $60 billion in net debt, which, coupled with a high debt-to-equity ratio (D/E) of approximately 237.62% (in Canadian dollars), creates pressure. Here's the quick math: they are targeting a long-term debt-to-EBITDA ratio of 4.75x, and while they are on track to deliver comparable EBITDA between $10.8 billion and $11.0 billion for the 2025 fiscal year, maintaining that deleveraging momentum is crucial. If interest rates tick up or project costs balloon, that target gets harder to hit.

Their growth strategy, while smart, introduces operational and timing risks. TC Energy is committed to placing approximately $8.5 billion of assets into service this year, but large-scale infrastructure projects are never a sure thing.

• Delays in sanctioning larger pipeline projects can push out expected near-term comparable EBITDA contributions.
• The Southeast Gateway pipeline, for example, was completed under budget but is still awaiting final regulatory approval in late 2025.
• Major outages, like the two-unit Major Component Replacement (MCR) outages at Bruce Power in 2025, caused the Power & Energy Solutions comparable EBITDA to fall $\sim$18% quarter-over-quarter.

To be fair, management is defintely aware of these risks and has clear mitigation strategies. The reliance on rate-regulated assets and long-term take-or-pay contracts (where customers pay regardless of use) provides a stable cash flow foundation, which is their biggest defense against market volatility. For project delays, they've been proactive, implementing a toll adjustment mechanism to offset the earnings impact from the delayed in-service of the Strategic Gas Pipeline (SGP) earlier this year. Plus, they are focusing on low-risk brownfield expansions-building on existing infrastructure-to minimize execution risk on their capital program, which is now expected to be at the low end of the $5.5 billion to $6.0 billion net capital expenditure range for 2025.

The table below summarizes the key risks and the company's direct response:

The next concrete step for you is to monitor the Q4 2025 filings for updates on the debt-to-EBITDA ratio and any changes to the 2026 capital program guidance. That will tell you if the deleveraging plan is truly gaining traction.

Growth Opportunities

You want to know where TC Energy Corporation (TRP) is going, and the answer is simple: they are doubling down on their core strength-regulated natural gas and power-to capture the massive, near-term demand from electrification and data centers. The company's strategy is a low-risk, high-certainty bet, backed by contracts that make the utility business look volatile.

For the 2025 fiscal year, the outlook remains stable and strong. The company has reaffirmed its comparable EBITDA guidance in the range of C$10.7 billion to C$10.9 billion, which is a solid increase over the prior year. Analyst consensus for 2025 revenue is around CA$14.648 billion, and earnings per share (EPS) is projected to average about $3.59. That's steady growth, but the real story is the project pipeline feeding those numbers.

Key Growth Drivers and Strategic Projects

The biggest growth drivers for TC Energy Corporation aren't tied to volatile oil prices; they are tied to structural shifts in North American energy consumption. Honestly, it's all about natural gas and electricity becoming the backbone for a modern, data-driven economy.

• LNG Exports: Natural gas demand is projected to increase by 45 billion cubic feet a day by 2035, driven by a tripling of liquefied natural gas (LNG) exports. TC Energy's extensive pipeline network is perfectly positioned to capture this flow.
• Data Center Demand: The surge in power needs from new data centers is a massive tailwind. The company has sanctioned the US$0.9 billion Northwoods project on its ANR system specifically to serve electric generation demand in the U.S. Midwest, including these new data centers, all backed by a 20-year take-or-pay contract.
• Coal-to-Gas Conversion: Projects like the C$400 million Pulaski and C$400 million Maysville expansions on the Columbia Gulf system are directly facilitating the shift from coal-fired power plants to cleaner natural gas.

The company is targeting $6 billion to $7 billion in net annual capital expenditures, with approximately $8.5 billion of projects expected to be placed into service in 2025 alone. This is how you translate macro-trends into concrete financial results. For more on who is buying into this strategy, you might want to read Exploring TC Energy Corporation (TRP) Investor Profile: Who's Buying and Why?

Contracted Stability and Competitive Edge

What sets TC Energy Corporation apart is its low-risk business model, which is a major competitive advantage in the energy infrastructure sector. This isn't a wildcat exploration play; it's a toll-road business.

Here's the quick math: approximately 97% of their comparable EBITDA is underpinned by rate-regulated structures or long-term take-or-pay contracts. This means cash flow is defintely predictable, insulating investors from short-term commodity price swings. The focus is on low-risk brownfield expansions-upgrading and expanding existing infrastructure-rather than riskier greenfield (new construction) projects.

The successful completion of major assets, including the Coastal GasLink pipeline and the imminent service placement of the Southeast Gateway pipeline in Mexico, which was completed 13% under budget, demonstrates strong project execution. This operational discipline is crucial for maintaining their projected annual earnings growth rate of around 5.5% through 2028.

This is a utility-like business with a growth engine. Still, capital discipline is crucial to manage the ambitious capital program and keep the debt/EBITDA target of 4.75x in sight.

Next Step: Finance: Monitor Q4 2025 earnings call for any updates on the 2026 capital expenditure forecast and the debt-to-EBITDA trajectory by the end of the year.