CIBC has published their Monthly World Markets Report and initiated coverage of pipelines and utilities. They rate TRP and EMA as Top Picks. Here's an excerpt:
TransCanada Corp. has completed roughly two-thirds of a $20 billion capital spending program that includes “mega-projects” such as the Bruce nuclear refurbishment and the Keystone oil pipeline. The company has also made significant investments in gas pipeline infrastructure in Alberta and B.C. to access shale gas deposits, and in a number of power generation facilities, both conventional thermal and renewables.
The company is only starting to see the financial benefit of these investments, which should help drive earnings growth from 2011 through 2014. Indeed, if all planned spending is completed, TransCanada could see an almost 50% increase in earnings before interest, taxes, depreciation and amortization (EBITDA) over this timeframe compared to 2010.
The biggest risk is that the Keystone extension doesn't get approved. Nowhere does the Mainline get mentioned.
I also recall TRP's presentation at its 2010 annual meeting in which they forecast accelerating growth in cash flow as numerous projects come on stream. They have lots of projects going on, and Keystone is just one of them. My feeling is that it will get approved because if it doesn't, there will be political pressure to ship the oil westwards to the coast for export to Asia.
TRP has underperformed ENB, but that may be precisely why one should favor the former. Anyway, both are core holdings I and have no plans to sell either.