Inter Pipeline (IPL.TO)

Pipelines don’t quite have the ROE he is looking for, but has just initiated a dividend growth model for clients. Pipelines are very steady dividend payers. This is one of the better managed pipeline companies.

This has suffered along with the decline in oil price. It is much more directly related to energy prices. Has a good yield, which he thinks is safe and stable. At these prices, this is looking more and more attractive. 6.5% dividend yield.

A strong company and the dividend is very stable and growing, at a slower rate. The company is doing good things. They have a lot of the oil sands growth, but that growth has taken a significant downshift in the current price environment. (See Top Picks.)

This has been a consistent long-term grower. The reason for its recent poor performance is that most of its business comes from transmission to and from the oil sands, which has been in the doldrums. They also have conventional oil and a gas fracing business as well as storage in the UK. There is tremendous potential of long-term leverage in a pickup in the oil sands business, where they have 50% capacity in their pipelines. They are experimenting with looking at propane dehydration, which will eventually lead to the production of plastic, which could be a major growth business. Dividend yield of 6.5%. (Analysts’ price target is $30.)

Historically, this has been one of the best re-investors of capital in the space. He is always drawn to it because of the rate of return. It is long-term contracts. If you are looking for the safest, long term, underlying cash flow of any pipeline company, historically this company has had that. They did the big Marathon acquisition last year, and he is not 100% sure of how that blends in. There is a little more risk to it, but from the debt point of view, having those bonds out, it is still underpinned by the best cash flow in the industry. He likes this in the low $20, and that is where he would add. Dividend yield of 6.25%.

A good pipeline company. Although he doesn’t own this, he owns enough pipes in other companies. It has a good yield and it is a good dividend grower. 6% dividend yield.

The chart shows this has been in a trading range since early 2016. Because this tends to be more of an interest sensitive stock in the summer, you may want to watch for the possibility of the stock moving above the current trading range. Technically, this is okay to own, and looks like it could be an interesting play going forward, for a possible move on a break out to the upside.

A great 5-7 year hold. They have tremendous potential in unused capacity in the oil sands transportation part of the business. Looking at a poly dehydration project, which would give some very substantial growth from here.

Trading at around 20X versus its peers of around 26X. They just won their Q4 numbers, due to their recently acquired Williams assets. He doesn’t see a lot of growth.

These types of stocks have been fantastic buys. This one has sort of based between $26 and $30. You buy it on the low side and sell it on the high side if you are a trader. Pipelines are all pretty decent holds.

He likes this company. The yield is about 6% and they increase their dividend steadily. They own a lot of the pipelines that feed natural gas into the oil sands, and takes products out. A lot of the revenue is contracted, so there is no commodity price risk. Feels confident, both in the 6% yield and that there is strong profitability. This is a company that you can buy and sleep well at night.

All the pipeline multiples look high. What you are really looking for is what is their profile going forward, in terms of the projects they have on hand, and how much is it going to increase. This has a reasonable outlook going forward.

He considers this to be the most entrepreneurial in the pipelines. They are very good at it. The company is still growing and they will continue to do so.

(Market Call Minute) She likes it and it has a nice yield. It just reported a good quarter.

Enbridge Income Fund (ENF-T) or Inter Pipeline (IPL-T)? These are not similar companies, but have similar stories. They are both slower growth companies with a slower dividend growth, but with a higher yield and more stability. This one probably has a little more potential given that it is a bit smaller so incremental projects means more for them. They have a proposal on a propylene plant in Western Canada, which would be very positive longer-term. Ultimately both companies are solid. It just a matter of how much you want to own of them in your portfolio and what your goal is.