TransCanada (NYSE:TRP) is having a strong year all things considered. The Canadian pipeline giant's expansion efforts have been paying dividends by driving earnings and cash flow up at a healthy pace through the first half of 2018. Investors should expect that trend to continue when the company reports its third-quarter results later this week, which is one of a few things they should keep their eye on when reviewing that report.

Did the company's growth engine continue humming along?

TransCanada is in the midst of a major expansion phase. Overall, the pipeline giant has 28 billion Canadian dollars' ($21.3 billion) worth of growth projects under way, which should fuel 10% annual earnings growth through at least 2020. Of that amount, CA$10 billion ($7.6 billion) of expansions should enter service by the end of this year.

A pipeline with snow covered mountains in the background.

Image source: Getty Images.

Several of those projects have already started, which should provide a boost to the company's third-quarter results. Ideally, the company will report strong earnings and cash flow growth for the third quarter as well as noting that it remains on track to complete this year's expansions both on time and on budget.

Did the company add any more expansion projects?

In addition to the expansions the company has under way, it has another CA$20 billion ($15.2 billion) in development, which are crucial to driving growth beyond 2020. TransCanada recently gave the green light to one of those projects, the CA$6.2 billion ($4.7 billion) Coastal GasLink pipeline, which will supply natural gas to Royal Dutch Shell's (NYSE:RDS-A)(NYSE:RDS-B) LNG Canada facility. TransCanada expects to start construction on the 420-mile pipeline next year, which puts it on pace to complete the project by 2023, coinciding with the estimated in-service date of Shell's LNG Canada project. Given the size of the project, it should supply needle-moving cash flow growth when it comes online, potentially giving TransCanada more fuel to increase its dividend.

Expansion projects are vital to TransCanada's ability to continue growing, which is why investors should see if the company has any more new additions to its backlog beyond Coastal GasLink. One area to watch is its U.S. natural gas pipeline business. The company noted that it's reviewing several opportunities to expand that platform, including moving more gas toward the Gulf Coast. Future project additions across that system as well as the rest of its footprint could enable TransCanada to continue growing its dividend at around a double-digit annual pace well beyond its current 2021 forecast.

Pipelines laid out for construction.

Image source: Getty Images.

Check for an update on its funding strategy

While TransCanada is growing fast, those expansions cost lots of money, which has started concerning investors since the company doesn't generate enough cash flow after paying its dividend to fully fund its capital needs. Because of that, it has had to be creative to get the finances it needs to continue growing.

One of the funding vehicles it had used was its MLP TC Pipelines (NYSE:TCP). However, a regulatory policy revision has deeply impacted TC Pipeline's ability to fund drop-down acquisitions from its parent. Because of that, it's unclear what the future holds for this relationship. TransCanada could look to acquire its MLP, which is what rival Enbridge did with its MLPs, or it could wait and see if the market recovers. Either way, investors would like to know the company's plans for this entity.

Because its MLP is no longer a near-term funding option, TransCanada needs to reassure investors that it can finance its expansion projects. That's why they should keep a close eye on its progress in obtaining the funds it needs to keep growing. If the company clearly outlines how it will bridge its funding gap, that could help remove some of the weight of uncertainty that has caused TransCanada's stock to drop 20% this year.

Expect continued growth

With several expansion projects recently entering service, TransCanada's third-quarter results should show continued growth. In addition to that, investors will want to see if the company was able to secure any more expansion projects as well as the necessary funding to keep its growth engine humming. If it can deliver on all three, then shares could begin bouncing back.

Matthew DiLallo owns shares of Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.