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# TC Energy: May Be A Value Trap (Archive)
- URL: https://www.huntingalphas.com/tc-energy-may-be-a-value-trap-archive/
- Published: 2024-01-11T06:25:00.000Z
- Updated: 2026-02-27T06:16:26.000Z
- Description: TC Energy’s debt, cash flow, and asset moves suggest risks outweigh its tempting valuation.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, TRP, Energy

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- TC Energy looks enticing with a high 7.00% dividend yield and 10-yr low valuations. But I believe it is a value trap.
- The company is an FCF bleeder, and this is expected to continue. Its dividends are funded by net debt issuances and its ROIC is below its cost of capital.
- TC Energy's debt portfolio is locked in at near all-time high interest rates heading into 2024 when rate cuts are expected. High debt servicing costs may be forcing asset sales.
- The company is pursuing asset sales as part of an aggressive deleveraging goal, but there may be some desperation in the selling, elevating value destruction risks.
- The value creation rationale for the spinoff of their Liquids business is unclear.

Read the full article [here](https://seekingalpha.com/article/4662283-tc-energy-may-be-a-value-trap?ref=huntingalphas.com).

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**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*