TransCanada Power, L.P. for income investors: TLP is a high quality limited partnership suitable for income-seeking investors
Money Digest, June, 2000
For income investors
TransCanada Power, L.P. (TSE: TPL.UN; Recent price: $24.50) is a limited partnership. It offers investors solid cash flow and growth opportunities. This unit is suitable for income-seeking investors.
The company
TransCanada Power owns and operates four enhanced combined cycle electrical generation facilities In Northern Ontario State (Nipigon, Kapuskasing, North Bay and Tunis), a gas power plant in New York (Castleton) and a wood-waste plant in British Columbia.
Current developments
The partnership is currently developing a fifth facility with operations that are fueled by wood waste. These operations are managed by TransCanada Energy Ltd.
Related Results
The Calstock wood-waste plant in Ontario, which is expected to be completed by July 2000, will increase the total installed capacity to 328 megawatts.
Investment details
The partnership's cash distributions grew by 9% in 1999 even though $.06 per unit was retained as reserve.
Another advantage of investing in TPL is that a substantial part of the yield (about 90% in 1999) is considered to be return of capital and hence tax deferred.
TransCanada counts as foreign content for RRSPs.
For investment purposes, TPL is considered to be of high quality. You may want to visit TPL's website before investing: www.transcanada-powerlp.com.
TransCanada Power, L.P. Symbol TPL.UN (TSE) Recent price $24.50 Dividend $2.37 Yield 9.60% P/E ratio 16.30 Book value $15.97
Price/book 1.5x
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