Inter Pipeline (IPL.TO)

Now cheaper at around 16.6 P/E. 7% distribution which is good. They have a flat growth over forecast horizon though. He prefers Pembina Pipeline Corp (PPL-T).

IPL-T or ENF–T. As a long term hold they are okay. He would prefer that rather than a single company he would like ZWU-T because you get all the pipelines and telecoms and a covered call overly. You are very diversified within Canada. North of a 6% yield. This is nice as a long term hold.

It's having a nice bounce because of the oil price rise. Reduce your stake a little. This will grow over time. But it depends on the oil sands. Price could be sluggish. A great yield of nearly 7%.

He owns a number of pipelines but has been reducing exposure to dividend stocks. As interest rates rise, competition for investor dollars takes money away from dividend stocks. It is okay to hold for a very long period of time but the next two to three years may see the dividend eaten up by the stock falling.

Pipeline companies are not great growers and do poorly when rates rise. Investors buy them for the dividends. Like all utilities, rates are set and don't move according to supply and emand, so earnings are limited.

13 times cash flow, okay return on equity. Not a ton of free cash flow. High cash to book. Payout ratio is above 100%. Price momentum is the problem here.

He likes this stock and thinks it is great value at these levels. The P/E at 15 is well below their long term average. The market is somewhat concerned about the heavy capital spending program over the next four years. This will fund the propane to polypropylene project, which should generate $600 million of annual operating profit once built. This pullback is a good entry point. Yield 7.6%.

They have an interesting project in a propane dehydration plant converting excess propane into plastic pellets for export to the US gulf coast petrochemical complex. This plant will cost $3.5 billion, but will not need new capital for this right away. Yield 7.6%. (Analysts’ price target is $28.73 )

They owned it for a couple of years but sold it a few months ago just to readjust their portfolios. Trimmed their exposure to pipeline in general. The construction of a new facility has created some uncertainty as they didn’t sign enough contracts for it. It has an attractive yield.

You are banking on growth in the oil sands, he thinks. There is a risk of contraction and so the ability to see growth in multiplies is decline. Pipelines are seen as a bond proxy, since bond prices are viewed as low, so too is this segment being impacted by bearish sentiment. He would not own this.

A good, mistream company. Dividend safe and will increase. Earnings and cash flow are increasing at an okay pace. Good growth. Stick with it or buy a little.

It has come under pressure from the rise in dividend rates. The chart doesn’t look great. From the business perspective, they don’t have a ton of debt, their capacity is contracted with long term contracts, they have another project on polypropylene so they have other opportunities to grow, they have a strong 7% dividend.

Pipeline operator. Moves 2.3 million barrels a day. Yield of 7.4% Very cheap and good stable dividend. (Analysts’ price target is $28.5)

The payout ratio is not bad at 71%. Probably tick up to 85% in 2020. Not a lot of growth in in the next couple of years. A yield proxy. More exciting names in the group.

He does not believe in adding to a position just because it goes down. Technically we are down to the lows of 2016. It is difficult to say if it will continue up at this point. He would prefer others. Don’t add to it.