Barron's: TransCanada is attractive alternative to U.S. MLPs, could rise 35%

|About: TransCanada Corporation (TRP)|By:, SA News Editor

TransCanada (TRP +1.7%) opens higher after a favorable weekend report from Barron's, which says that even without the $5.4B Keystone XL pipeline, the company boasts an industry-leading $30B backlog of projects in the works.

TRP shares aren't cheap based on reported earnings, trading at ~23x estimated 2014 after-tax profit, but TRP has a strong growth outlook - management sees EBITDA nearly doubling by the end of the decade - and the shares fetch just 12x estimated 2015 EBITDA.

Investors have given TRP little credit for its conservative dividend policy, which pays out a third of its cash flow in dividends while retaining funds to reinvest in its capital program.; there's speculation that TRP, whose current investor base is dominated by Canadian institutional holders, could attract a U.S. activist investor who would push for a more generous dividend and a separation of the pipeline and power-generating assets.