r to rivals such as Sempra Energy or Kinder Morgan, and respective numbers of -10% and -8.50% will show up. Clearly there is a difference in demand and pricing between these companies. However, the question to now ask is if these numbers are sustainable. Probably the two most important statistics to look at when determining to purchase stocks are in favor of TransCanada are operating margins and gross margins. As a five year average, according to Reuters, TransCanada sees its gross margins to increase by 75.14% and operating margins to increase by 35.52%. Looking at the industry's respective averages of 33.53% and 14.64%, TransCanada has phenomenal numbers. Even compared to some of the aforementioned rivals, this company performed much better. National Grid only sawThe utilities sector has had a very productive run the past year, and many investors now feel that all companies in this area are overvalued. While this empirical judgment is true to an extent, it does not mean that companies across these industries are not growing and helping to improve their financial figures to benefit shareholders. The gas utility industry, with market-cap leaders such as National Grid, Sempra Energy, and Kinder Morgan, can be argued to be one of these mounting industries, because there is strong potential for growth in each of these companies. However, one company in particular, TransCanada (TRP), a 19.6 billion dollar large-cap stock, not only has a potential for strong financial expansion, but because of its business strategy, TransCanada has an escalated potential for strong financial expansion.

Looking at this business plan TransCanada will use to boost its revenue, according to Reuters, the company, "is a North American energy infrastructure company focused on pipelines and energy." Located in Calgary, Alberta approximately 50% of its revenue comes from energy, and 50% of sales come from pipelines. The pipelines section of this business model distributes the commodity natural gas across multiple regions of Canada and the United States. Since natural gas futures, according to the NYMEX Henry Hub 12 Month Future Price Strip Average, have risen over 30% since the beginning of 2007 and there is a strong potential for an active hurricane season, according to NOAA, which may further escalate the price, companies like TransCanada will ultimately benefit from this unfortunate consumer news. The other section TransCanada deals with, energy, may also benefit from higher electricity prices. According to the PJM Western Electricity, prices since the beginning of 2007 have risen over 50%. And typically, during the months up to August, especially if there is an active hurricane season, electricity rates can skyrocket like illustrated in 2005 and again be the beneficiary to companies that deal specifically with electricity such as TransCanada. But regardless if there actually is an active hurricane season or not, relative to share price, this company has performed very well in all scenarios. In each of the past four years, TransCanada has finished positive from the beginning of the year to the end with many of these years producing capital gains in excess of 20%. Therefore, because of the solid business plan and because of the inevitable rise in commodities in the coming months and years, the potential for a company like TransCanada to perform financially at high levels is strong.

Nevertheless, while location may differ, many of the companies in the gas utility industry have similar business models when compared to TransCanada. However, what differentiates this company from the rest of the industry is strong historical and predicted fundamentals. Starting from the top line, over a trailing twelve month basis, TransCanada, according to Capital IQ, has seen year over year quarterly revenue growth exceed 27%. Comparing this number to rivals such as Sempra Energy or Kinder Morgan, and respective numbers of -10% and -8.50% will show up. Clearly there is a difference in demand and pricing between these companies. However, the question to now ask is if these numbers are sustainable. Probably the two most important statistics to look at when determining to purchase stocks are in favor of TransCanada are operating margins and gross margins. As a five year average, according to Reuters, TransCanada sees its gross margins to increase by 75.14% and operating margins to increase by 35.52%. Looking at the industry's respective averages of 33.53% and 14.64%, TransCanada has phenomenal numbers. Even compared to some of the aforementioned rivals, this company performed much better. National Grid only saw

an escalated potential for strong financial expansion.

Looking at this business plan TransCanada will use to boost its revenue, according to Reuters, the company, "is a North American energy infrastructure company focused on pipelines and energy." Located in Calgary, Alberta approximately 50% of its revenue comes from energy, and 50% of sales come from pipelines. The pipelines section of this business model distributes the commodity natural gas across multiple regions of Canada and the United States. Since natural gas futures, according to the NYMEX Henry Hub 12 Month Future Price Strip Average, have risen over 30% since the beginning of 2007 and there is a strong potential for an active hurricane season, according to NOAA, which may further escalate the price, companies like TransCanada will ultimately benefit from this unfortunate consumer news. The other section TransCanada deals with, energy, may also benefit from higher electricity prices. According to the PJM Western Electricity, prices since the beginning of 2007 have risen over 50%. And typically, during the months up to August, especially if there is an active hurricane season, electricity rates can skyrocket like illustrated in 2005 and again be the beneficiary to companies that deal specifically with electricity such as TransCanada. But regardless if there actually is an active hurricane season or not, relative to share price, this company has performed very well in all scenarios. In each of the past four years, TransCanada has finished positive from the beginning of the year to the end with many of these years producing capital gains in excess of 20%. Therefore, because of the solid business plan and because of the inevitable rise in commodities in the coming months and years, the potential for a company like TransCanada to perform financially at high levels is strong.

Nevertheless, while location may differ, many of the companies in the gas utility industry have similar business models when compared to TransCanada. However, what differentiates this company from the rest of the industry is strong historical and predicted fundamentals. Starting from the top line, over a trailing twelve month basis, TransCanada, according to Capital IQ, has seen year over year quarterly revenue growth exceed 27%. Comparing this number to rivals such as Sempra Energy or Kinder Morgan, and respective numbers of -10% and -8.50% will show up. Clearly there is a difference in demand and pricing between these companies. However, the question to now ask is if these numbers are sustainable. Probably the two most important statistics to look at when determining to purchase stocks are in favor of TransCanada are operating margins and gross margins. As a five year average, according to Reuters, TransCanada sees its gross margins to increase by 75.14% and operating margins to increase by 35.52%. Looking at the industry's respective averages of 33.53% and 14.64%, TransCanada has phenomenal numbers. Even compared to some of the aforementioned rivals, this company performed much better. National Grid only saw

, companies like TransCanada will ultimately benefit from this unfortunate consumer news. The other section TransCanada deals with, energy, may also benefit from higher electricity prices. According to the PJM Western Electricity, prices since the beginning of 2007 have risen over 50%. And typically, during the months up to August, especially if there is an active hurricane season, electricity rates can skyrocket like illustrated in 2005 and again be the beneficiary to companies that deal specifically with electricity such as TransCanada. But regardless if there actually is an active hurricane season or not, relative to share price, this company has performed very well in all scenarios. In each of the past four years, TransCanada has finished positive from the beginning of the year to the end with many of these years producing capital gains in excess of 20%. Therefore, because of the solid business plan and because of the inevitable rise in commodities in the coming months and years, the potential for a company like TransCanada to perform financially at high levels is strong.

Nevertheless, while location may differ, many of the companies in the gas utility industry have similar business models when compared to TransCanada. However, what differentiates this company from the rest of the industry is strong historical and predicted fundamentals. Starting from the top line, over a trailing twelve month basis, TransCanada, according to Capital IQ, has seen year over year quarterly revenue growth exceed 27%. Comparing this number to rivals such as Sempra Energy or Kinder Morgan, and respective numbers of -10% and -8.50% will show up. Clearly there is a difference in demand and pricing between these companies. However, the question to now ask is if these numbers are sustainable. Probably the two most important statistics to look at when determining to purchase stocks are in favor of TransCanada are operating margins and gross margins. As a five year average, according to Reuters, TransCanada sees its gross margins to increase by 75.14% and operating margins to increase by 35.52%. Looking at the industry's respective averages of 33.53% and 14.64%, TransCanada has phenomenal numbers. Even compared to some of the aforementioned rivals, this company performed much better. National Grid only saw

ning of the year to the end with many of these years producing capital gains in excess of 20%. Therefore, because of the solid business plan and because of the inevitable rise in commodities in the coming months and years, the potential for a company like TransCanada to perform financially at high levels is strong.

Nevertheless, while location may differ, many of the companies in the gas utility industry have similar business models when compared to TransCanada. However, what differentiates this company from the rest of the industry is strong historical and predicted fundamentals. Starting from the top line, over a trailing twelve month basis, TransCanada, according to Capital IQ, has seen year over year quarterly revenue growth exceed 27%. Comparing this number to rivals such as Sempra Energy or Kinder Morgan, and respective numbers of -10% and -8.50% will show up. Clearly there is a difference in demand and pricing between these companies. However, the question to now ask is if these numbers are sustainable. Probably the two most important statistics to look at when determining to purchase stocks are in favor of TransCanada are operating margins and gross margins. As a five year average, according to Reuters, TransCanada sees its gross margins to increase by 75.14% and operating margins to increase by 35.52%. Looking at the industry's respective averages of 33.53% and 14.64%, TransCanada has phenomenal numbers. Even compared to some of the aforementioned rivals, this company performed much better. National Grid only saw

r to rivals such as Sempra Energy or Kinder Morgan, and respective numbers of -10% and -8.50% will show up. Clearly there is a difference in demand and pricing between these companies. However, the question to now ask is if these numbers are sustainable. Probably the two most important statistics to look at when determining to purchase stocks are in favor of TransCanada are operating margins and gross margins. As a five year average, according to Reuters, TransCanada sees its gross margins to increase by 75.14% and operating margins to increase by 35.52%. Looking at the industry's respective averages of 33.53% and 14.64%, TransCanada has phenomenal numbers. Even compared to some of the aforementioned rivals, this company performed much better. National Grid only saw a 23.74% increase in operating margins, while Sempra Energy only saw a 13.12% increase for that same statistic. And drilling down these numbers past more interest, tax, and other costs will still show that net income remains strong for this company.

As a five year average, TransCanada saw a net profit margin of about 17.18%. This number is above the industry average of 9.11% and respective numbers from National Grid, Sempra Energy, and Kinder Morgan. However, many investors may wonder if much of this growth transcends to an undervalued status for this equity. Looking at the forward P/E ratio for TransCanada, while the number is below the trailing multiple and the industry average of about 29.47, the multiple is still a bit higher than companies like National Grid or Sempra. In addition, TransCanada's other multiples such as price to sales (2.64), enterprise value to revenue (4.24), and enterprise value to EBITDA (9.836) are all either above or very similar to the aforementioned companies. Thus, I unfortunately cannot label TransCanada as a value stock. However, it is important to realize that this company has amazing historical growth and predicted growth. If these numbers are sustainable and nothing serious happens to the company legally or naturally, the company will continue to see higher EPS estimates. Then as more investors see the benefits of owning this company, the share price of TransCanada will continue to escalate with a strong positive correlation like it has seen over the past four years.

What TransCanada has that will help contribute to this higher share price is a strong management team. Led by CEO Harold Kvisle, this company with its 2,350 employees has seen strong management ratios in the past and should continue to do so. The company has had ROE numbers above both industry and competitor average at 12.84% last year. ROA and ROI at 4.17% and 4.82% have also been strong, either near or above industry average. TransCanada also continues to invest highly in new capital, as its five year average growth rate at 26.15% for these types of expenditures is well above the industry average at 18.50%. And overall nothing terrible in terms of fundamentals stands out for this company, and it should continue to do fine in terms of performance in the coming months and years.

Therefore, after reviewing the strategy and fundamentals for TransCanada, there should be multiple reasons to at least consider purchasing shares of this company. The dividend yield of 3.48% is above industry average and should be another benefit to investors considering this company. Once again, there is strong potential for growth for this company, especially since it is so dependent on commodities that will increase over the next few months. High commodity prices means high fundamental numbers and strong capital gains for investors of this company.