TC PipeLines (TCP) is trading at an EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of nearly 14x. It’s close to the peer average.
Peers included in the average calculation are Enterprise Products Partners (EPD), Kinder Morgan (KMI), Energy Transfer Equity (ETE), Enable Midstream Partners (ENBL), and Shell Midstream Partners (SHLX).
Impact of general partner interests and IDRs
The EV-to-EBITDA ratio can be misleading when trying to understand the limited partner unit valuation due to IDRs (incentive distribution rights). Read Do MLPs Benefit from the LP-GP Model? to learn more about IDRs.
Learn more about Enterprise Products Partners and Kinder Morgan in Enterprise Products Partners: What Will Fuel Growth in 2017? and Why Kinder Morgan Is at the Top of Investors’ Wish Lists.