Inter Pipeline (IPL.TO)

They did an equity issue this morning of $200 million to pay for an acquisition, but the price struggled which indicates a muted upside in the short term. He prefers Enbridge and Transcanada. 69% payout ratio is okay, not super-high. The dividend is safe.

The pipelines have all been hit, because of problems in building them in Canada. These companies are also highly levered, thus sensitive to interest rate hikes. IPL's dividend is safe. They have other assets they are building and so these will add more revenues. This is one of the few pipelines he owns. Hold onto this and reap the dividend. This is a long-term prospect.

ENB-T vs. IPL-T. He owned ENB-T for a while. The payout was 48%. Their earnings have picked up considerably. They are reasonably profitable. They will have -5% earnings growth next year. You are secure in the yield. IPL-T is higher than ENB-T at a sustainable 60% with earnings pulling back 7% next year. He thinks both will trade sideways for a while.

(Past Top Pick Sept. 22, 2017, Down 3%) These stocks have struggled as interest rates have risen. Still likes it. Canada may build another pipeline, but what's more important are the assets the company holds--that's why you own such stocks. Assets. They can sustain their yield.

Building a chemical facility that will come online in a few years. She took money out of pipelines and put it into electric utilities and renewable energies, because the future is good in this space.

If you want a company with the most stable contracts in the sector, this is one of the key players, with great connections to Fort McMurray. A great company with great returns. The stock has been sliding as interest rates have gone up and the company has no major growth plans outside of the major polypropylene project. They are spending $3.5 billion on the project and he believes they are on budget and on time. Yield 6%.

This company has been hit disproportionately hard by the Trans Mountain pipeline delay as a trans-regional shipper of crude. Their big petrochemical project is a big risk for them, but could be very profitable as well. The company is well-managed and raised their dividend consistently. He is watching it now because of the yield. Yield 7%.

He owns other pipelines. It's trading at near lows. If you're longterm on pipelines, it's a decent time to enter this, but Transcanada and Pembina offer better dividend growth.

(Past Top Pick, Nov. 30, 2017, Down 10%) A steady business, but was sold off as interest rates rose. Also, investors misunderstood their major growth project, which he thinks is sound. IPL is building a plant to process and move rich natural gas out of Alberta which will finish in 2021 and produce good profits. Investors are taking a wait and see approach, though. Pays a 7% dividend yield. He's happy to hold it.

This has a flatter revenue profile than other pipelines, like Pembina. The dividend is safe and the debt is not uncomfortably high.

This is not his favorite pipeline, because today with exposure to heavy oil, Alberta and only into the US Midwest it is limiting growth. He is okay on the space, but would look to another company.