Critical Contrast: TC Energy (NYSE:TRP) and Expand Energy (NASDAQ:EXE)

TC Energy (NYSE:TRP) and Expand Energy (NASDAQ:EXE) are both large-cap energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

TC Energy has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Expand Energy has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Dividends

TC Energy pays an annual dividend of $2.41 per share and has a dividend yield of 4.5%. Expand Energy pays an annual dividend of $2.30 per share and has a dividend yield of 2.0%. TC Energy pays out 103.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Expand Energy pays out 65.3% of its earnings in the form of a dividend. TC Energy has increased its dividend for 1 consecutive years. TC Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares TC Energy and Expand Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TC Energy	$14.65 billion	3.83	$3.43 billion	$2.32	23.24
Expand Energy	$10.85 billion	2.52	-$714.00 million	$3.52	32.67

TC Energy has higher revenue and earnings than Expand Energy. TC Energy is trading at a lower price-to-earnings ratio than Expand Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares TC Energy and Expand Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TC Energy	28.98%	11.22%	3.31%
Expand Energy	7.99%	6.31%	4.02%

Institutional and Insider Ownership

83.1% of TC Energy shares are owned by institutional investors. Comparatively, 97.9% of Expand Energy shares are owned by institutional investors. 0.2% of Expand Energy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for TC Energy and Expand Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TC Energy	0	4	6	2	2.83
Expand Energy	0	3	17	2	2.95

TC Energy currently has a consensus target price of $84.00, suggesting a potential upside of 55.80%. Expand Energy has a consensus target price of $128.32, suggesting a potential upside of 11.59%. Given TC Energy’s higher possible upside, equities research analysts clearly believe TC Energy is more favorable than Expand Energy.

Summary

TC Energy beats Expand Energy on 9 of the 17 factors compared between the two stocks.

About TC Energy

TC Energy Corporation operates as an energy infrastructure company in North America. It operates through five segments: Canadian Natural Gas Pipelines; U.S. Natural Gas Pipelines; Mexico Natural Gas Pipelines; Liquids Pipelines; and Power and Energy Solutions. The company builds and operates a network of 93,600 kilometers of natural gas pipelines, which transports natural gas from supply basins to local distribution companies, power generation plants, industrial facilities, interconnecting pipelines, LNG export terminals, and other businesses. It also has regulated natural gas storage facilities with a total working gas capacity of 532 billion cubic feet. In addition, it has approximately 4,900 kilometers of liquids pipeline system that connects Alberta crude oil pipeline to refining markets in Illinois, Oklahoma, Texas, and the United States Gulf Coast. Further, the company owns or has interests in power generation facilities with approximately 4,600 megawatts; and owns and operates approximately 118 billion cubic feet of non-regulated natural gas storage facilities in in Alberta, Ontario, Québec, and New Brunswick. The company was formerly known as TransCanada Corporation and changed its name to TC Energy Corporation in May 2019. TC Energy Corporation was founded in 1951 and is headquartered in Calgary, Canada.

About Expand Energy

Expand Energy Corporation is an independent natural gas producer principally in the United States. Expand Energy Corporation, formerly known as Chesapeake Energy Corporation, is based in OKLAHOMA CITY.