Inter Pipeline (IPL.TO)

Inter Pipeline (IPL-T) or Pembina Pipeline (PPL-T)? Local carriers in Alberta, Saskatchewan and BC. They take oil from various oil sands, do some treating, with some storage. They are local utility providers on the pipeline side. Don’t have the political problems of getting through province to province to province. He likes the business they are in. The reason he likes this one is that it yields 7%. Either one is a good investment.

Lots of conventional as well as oil sands pipelines. They may invest in a plant in the West and that might require some raising of capital. Their part of the logistics chain is vital to move products to market.

Technically, this is a bit on the weak side. However, around $23, it is probably not bad. However, if it fails to hold there, beware. The stock will be going to $18-$19.

He likes this company. A lot of people are incorrectly lumping it in with oil. It is not a producer, but a transporter. They also have the midstream fractionation asset. They have a $3 billion capital spend decision which they expected to make by the 2^nd quarter. Management is now saying that should fall into the 3^rd quarter. This is to build an ethylene/polyethylene plant in Alberta. The province is awash in natural gas which is a feed stock for petrochemicals. Green lighting this project should put a lift to the stock price.

He prefers other pipelines. This one is oilier than he would like. He prefers ENB-T because you get oil and gas and US exposure. It’s a fine enough hold and is not going to cut the dividend.

This is a typical utility stock which does well in the summer time from May to October. We got a little last year, but not this year. There is some downward support and you get a nice dividend so it is okay to hold it.

He has lots of pipeline and mid-stream companies. They all are challenged with where they get the next growth. They are all buying other businesses. If IPL-T’s acquisition works it will be a good business to be in.

You have to go back a couple of years to look for support. The lows in the low $20s should be good long term support. We could get down there. Don’t buy a stock just for the yield. There are risks like the IPL-T spill that come along. He would add to it here. Resistance would be about $30.

It is being driven down by interest sensitivity in some of these stocks. It is deriving its value from what interest rates are doing. You would want to be increasing your holdings in these stocks, but because it has been dropping off, you have to watch.

Average Down? He owns others. It is oily and Canadian and that is why it is down. He prefers something more US and more geographically diverse, he would not average down.

(A Top Pick Aug 12/16. Down 9.73%.) This was really bought for the dividend. He considers this as a utility. It’s in Alberta and doesn’t have the political problems that TransCanada (TRP-T) or Enbridge (ENB-T) has of an out of province pipeline. He is still buying this. Dividend yield of 6.8%.

This has a 73% payout ratio. This is actually getting a little bit cheap. You are getting into a level that is pretty interesting. They don’t have a lot of growth over the next little while, but they have a nice payout ratio and a good distribution, along with growth longer-term.

This is Calgary based and are into oil and natural gas liquids. They have storage. Dividend yield of 6.5%. This got sold down with the rest of the energy market. It is a good, base income producing stock and doesn’t have the political problems that the big national pipelines have. (Analysts’ price target is $30.)

He likes this company, but does not like the stock. It has a decent return on capital, but it always trades expensively. He just can’t buy it due to the valuation.

He likes this company. It has struggled in the last couple of months. The approximate cause for weakness in the stock is that they are coming up to an important decision point about significant capital expenditure that they may or may not undertake. They acquired some US assets that were in Western Canada, and there was some optionality around the assets to spend $3 billion to build a big PDH petrochemical plant. This could be a good positive catalyst going forward in a couple of years.