TC Energy's 2025 Results Show Operational Strength, Reinforcing LNG-Driven Growth Narrative

What happened

TC Energy's post-2024 portfolio simplification has left it as a gas-centric midstream utility with a regulated and contracted network, anchored by Coastal GasLink's in-service and LNG Canada's ramp-up from June 2025. The company's fourth-quarter and full-year 2025 results boast its strongest safety performance in five years, leading to 15 flow records across its systems and solid financial outcomes. Management raised the dividend for the 26th consecutive year, signaling confidence in cash flow stability amid the ongoing LNG expansion tailwinds. Progress in commercial discussions hints at incremental project announcements in 2026, aligning with expected demand growth from North American LNG capacity increases. However, investors should look beyond the positive spin and critically assess whether these operational gains translate into sustained throughput growth, given persistent risks like regulatory uncertainties and LNG utilization challenges highlighted in the master report.

Implication

The safety improvements and flow records suggest enhanced operational reliability, potentially mitigating integrity risks that are a key watch item in the master report. The dividend increase reinforces the contracted revenue base's resilience, providing downside protection consistent with the utility-like cash flow visibility. Commercial discussions for 2026 projects align with the medium-term catalyst path of LNG-driven network expansions and debottlenecking opportunities. Yet, the market may overstate these positives; critical factors such as LNG Canada's cargo cadence and Canadian regulatory decisions on rates remain pivotal for sustained growth. Overall, this news confirms the master report's optimistic stance but underscores the need for continuous monitoring of throughput trends and policy developments to validate the investment case.

Thesis delta

The news does not shift the core BUY/LONG thesis, as it aligns with expected operational execution and financial stability from the simplified gas network. It strengthens the thesis by providing evidence of safety and flow records, which support throughput growth assumptions, but the stance remains contingent on monitoring LNG utilization and regulatory outcomes as per the master report's watch items. No material delta is warranted, but investors should note that positive results reduce near-term uncertainty while not eliminating longer-term risks.