Opinions
Mohsin Bashir
Keyera Corp
KEY-T
COMMENT
Jul 18, 2014
Stock price when the opinion was issued
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Owns in his balanced fund for income. Strong long-term performer. Hopefully will benefit from more LNG buildouts. Oil & gas prices are decent. In the face of lower interest rates, offers stable dividend without much regulatory concern.
Hard to tell if it will go higher, as it's not a high-growth company. Perhaps expect 8-10% long-term growth with dividends. One of the best infrastructure names in Canada.
Always felt it didn't get the credit it deserved. Great business. If Canada wants to be able to better defend itself on the global stage, perhaps it should bring more of the value chain within its borders instead of sending every oil and gas molecule south of the border. This company would have billions to deploy on projects if returns met its hurdle rate.
Betwixt and between, which makes it hard to call. Right up against quite strong technical resistance, and right at FMV. Good things have to happen, such as earnings and visibility of earnings. Unless you can see those, be very cautious about taking a position.
If it could bust through $46, that would be good, particularly if the price of energy also moves up to support it.
Last quarter was a nice beat. Asset sales. Sizeable projects seem to be making progress. Low leverage, low payout ratio with nice dividend, lots of volume growth on existing assets. Lots of upside from new project announcements.
Natural gas plus getting it offshore are real tailwinds for Canada. Trading ~16.3x 2027, not cheap, but ~13% growth. Fair value once you tack on the dividend. Play defense with the nice dividend plus good capital appreciation over the next year or two. Yield is 4.91%.
Holds this and is very happy with it. Good management. Has been trimming his holdings at around $79, and moving out of that sector and into mid-cycle names. Feels this particular area is going to have a challenging time should rising interest rates come in. These are effectively fixed income proxies in the utility space. Feels there are headwinds on a go forward basis. If you are an investor that is focused on a consistent and healthy dividend income, he would look at picking up a name like this because the management team is so wonderful. Would prefer in the low $70’s.