TransCanada Corporation (USA) (TRP), Enbridge Inc (USA) (ENB): To Be Profitable, We Need More Regulation

The benefits are not limited to midstream players. Upstream companies like Total SA (ADR) (NYSE:TOT) have significant investments in fields that are far away from refineries or ports.  In the Canadian oil sands, Total SA (ADR) (NYSE:TOT) holds a 40.8% in the Fort Hills asset, 50% interest in the Northern Lights asset and a 50% interest in the Surmont Asset. Eventually these reserves and producing assets need to be transported to market, and pipelines offer a very cost effective method.

Conclusion

TransCanada Corporation (USA) (NYSE:TRP) is an attractive company with the capital and profits to fund new pipelines, if they are approved. Its total debt to equity ratio of 1.32 is far more reasonable than Enbridge’s total debt to equity ratio of 3.25. TransCanada Corporation (USA) (NYSE:TRP) is profitable with an earnings before interest and taxes (EBIT) margin of 35.1% and a profit margin of 18.2%. Enbridge Inc (USA) (NYSE:ENB) offers a much thinner EBIT margin of 6.8% and a profit margin of 2.9%.

Total SA (ADR) (NYSE:TOT) is another good company to look at. While its EBIT margin of 10.6% and profit margin 4.4% could be stronger, its total debt to equity ratio of 0.46 is healthy for a major oil company. As the market waits for the final say on Keystone XL and the push for tighter regulation, TransCanada Corporation (USA) (NYSE:TRP) and Total are two good companies to look at.

The article To Be Profitable, We Need More Regulation originally appeared on Fool.com and is written by Joshua Bondy.

Joshua Bondy has no position in any stocks mentioned. The Motley Fool recommends Total SA. (ADR). Joshua is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.