TC Pipelines LP (symbol: TCLP) is a rare breed in today's market: an undervalued oil stock.
The company owns and operates pipelines and owns stakes in a multitude of other pipeline companies. The company has a forward P/E of 12 and a secure yield of 7%. The stock has a payout ratio of 81% but still has a large amount of income because depreciation is a major expense but is only a paper loss and since the company is a partnership it pays no taxes (the investors pay the taxes based on how large their stake is). It has a confusing tax code but TCLP is a good oil investment for the play it safe investor.
disclosure: the author owns stock in TCLP
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