Inter Pipeline (IPL.TO)

$33.65 is his model price, a 17% upside, but there is a ceiling at $33 on this one. They are paying out too much, more than they earn. He does not like those situations. There are cheaper opportunities out there.

Gives a better yield than Pembina (PPL-T), and its multiple is lower. They are still plugged into the oil sands. Each year is going to bring on 200,000 additional barrels that has to be moved. They are going to do just fine. Good management. They have been accretive in their acquisitions. Dividend yield of 5.6%. (Analysts’ price target is $54.82.)

It is a core holding for him, slightly under 6% yield. The oil sands are staying on for 50 to 100 years and this is a money creator. They keep doing incremental things.

Do pipelines get hit if interest rates go up? We now have a scenario where oil prices are rising and there is an issue with infrastructure in Canada and the US. Thinks pipelines are a good investment for a dividend portfolio. Prefers Enbridge (ENB-T), and has recently done a lot of work on Veresen (VSN-T) which offers a much higher dividend yield and are involved in some great projects which will come on stream in the next few quarters. IPL might do fine. You might lose some flows from interest rates. Also if oil does start to rally towards $60 flows might come out of the pipelines and into the ENPs. If looking for a nice dividend in something steady, this would fit that portfolio.

A good company and pays a nice dividend. Also, it is in the right space. He just finds it a little too rich for what they do. There are other alternatives. Dividend yield of 5.48%.

Valuations on the pipeline industry are excessive. There has been good growth in the sector, because they are interest sensitive plays. That is ending as interest rates may potentially go higher. Also there are regulatory risks. Dividend yield of 5.4%.

It is conservatively run and he is looking for continued dividend increases. They have a grant from the Alberta government for a propane polyethylene plant and made two acquisitions that will be accretive in time. (Analysts’ Target: $29.71).

In general, he likes pipelines as they are very reliable. However, this one is at the top end of its valuation now. A better idea would be an Enbridge (ENB-T). He likes the metrics better.

(A Top Pick April 27/15. Up .02%.) He still likes this, but would like to see it pull back a bit before buying any more. They have done some interesting stuff. Bought the Williams Canadian business, which gives them access to some off-gas from both Suncor and CNQ. They strip out liquids and resell them. They also have a propane dehydrogenation facility, which breaks down the off-gas.

This is one of three she owns. It has an attractive yield and it survived the pullback in energy. If we see improvement in energy prices they should do well. She thinks they can grow cash flow and dividends at a modest pace.

They did a secondary offering a month ago. That is usually a headwind for a stock until the market digests it. About $1.1 Billion of $1.7 Billion in revenues comes from transporting crude in Canada. There is not a lot of growth there. It has a great dividend yield and that is why it trades so expensively. If interest rates tick up, this stock will be obliterated.

He really likes this company. Feels the dividend is safe and will continue to grow, although he prefers Enbridge (ENB-T) and TransCanada Pipeline (TRP-T).

Inter-pipeline (IPL-T) or Enbridge (ENB-T)? Given the move that Enbridge has seen in the last week and a half, with their acquisition of Spectra, this is probably a little more attractively priced right now. Dividend yield of 5.9%.

This will be like most utilities, which is good. It has a 6% return on capital which is at the high end. But he can’t justify the price: 46% premium to invested capital.

This follows what happens in the movement of oil and gas. If oil does well, it takes off. He thinks it could go down to the low $20s. Usually tax loss selling kicks in the 2^nd and 3^rd week of December. Sometime in that window, he would be looking to see where the bargains are, and where you should be taking out your Buy tickets again. Dividend yield of 5.5%.