Keyera Corp (KEY.TO)

Management is exceptional. It is a natural gas and processing company. Take or pay contracts, with storage. Dividend yield is 4.13%, low payout ratio. (Analysts’ Target: $44.43)

Long-term hold of 10 years? A good company. It is more in the midstream space like Inter-Pipe or Pembina. It has had nice appreciation over the course of the last 6 months, but to him it is fully valued. If you own it, you could probably hold it for 10 years and you would be okay. There are better opportunities to make money in the short term.

Keyera (KEY-T) or Vermilion Energy (VET-T)? He doesn’t own either, but would probably prefer this one, because in this kind of a market they are acquiring a lot of assets at a good price. Vermilion has more of a commodity play in it, and probably has more zip as the commodity patch comes back.

Have done a very, very good job. They have excellent infrastructure assets, and are able to take advantage of arbitrage opportunities. Very opportunistic and, most importantly, they are very, very focused on getting the best bang for their buck. Believes this is one of these plays in “energy land” that you can own over the long-term. The trick is just to know when to own a lot of it.

Great management team. Their business is conservative and their payout ratio is around 50%. They’ve consistently grown the dividend, 15 times since they started as a public company. They grow by taking smaller positions in plants and facilities, adding to those and eventually owning them outright. This allows them to get the experience in owning and running them. Their cost of financing is really low. Dividend yield of 3.9%.

(Market Call Minute.) A good pipeline business, and has proved to be resilient in the face of falling oil prices. A good defensive way to get exposure.

One of the larger midstream businesses. Their specialty is natural gas processing and gathering. On the liquids side they do storage. Management team has been in place for ever. Top, top, top quality. A very conservative team. The payout ratio is 60%. Their latest partnership is with a large producer on building a sour gas processing plant. Dividend yield of 4.01%.

Don’t buy the laggards. It is going to be okay, like a bond proxy. It is not likely to go back to the highs any time soon. Slower dividend growth. Does not expect it to be a strong performer.

An energy service company. They get the natural gas when it comes out of the well. The gas has all kinds of guck in it and has to be cleaned before it can go down the pipeline. It is basically a tolling operation. It doesn’t matter what the price of gas is, it still has to be treated and people still have to heat their homes. They recently upped their dividend. Dividend yield of 3.77%.

Natural gas processor. Has traded down quite a bit, where she thinks there is an opportunity. A very strong company and is in a good environment for picking up assets from some of the struggling oil/gas companies that own riskier assets. This is definitely worth a second look, particularly when you see where the stock is trading. A good dividend which she thinks is safe.

Really likes this company. A diversified company within the energy industry. With natural gas midstream processing, natural gas liquid extraction, logistics, marketing, etc. they pick up some profitability at various points within the value chain. Extremely well-managed and a good balance sheet. His only problem over the years is that it has been more expensive than what he has wanted to pay. Currently trading at 23X forward earnings and 11 or 12 times cash flow. A client brought some into his firm, but has never bought this himself.

(A Top Pick Dec 8/14. Up 4.96%.) Gas gathering and processing. Doesn’t have a lot of direct commodity risks, but it does have throughput risks. Its assets are in the right area, and he thinks they come out of this downturn better. Still likes it.

(A Top Pick Dec 1/14. Up 1.79%.) Had been recommended when oil was at $90 a barrel. This is not an oil producer; it is a midstream pipeline, natural gas gathering company. For the most part they don’t care what the price of oil is. They have contracts and they care more about volume. In the meantime, they have had a record year. Raised their dividend twice this year. 3.9% dividend yield.

He ranks this as #1 in mid-streamers. Third-quarter report showed great growth with a variety of different things that took place, and all showed how management has been able to add value in a variety of different ways. They will be spending $700 million in CapX this year, so they are investing into what is a cyclical low. The types of projects they are getting are terrific having long-term contracts with AAA type of credits. Have been steadily increasing dividends from 2008. Great conservative balance sheet. Dividend yield of over 4.5%.

(Top Pick Nov 7/14, Down 9.21%) It is not so bad compared to the rest of the energy infrastructure sector. He still likes it. They did at least one acquisition of mid stream gathering systems. At this point in the cycle when banks squeeze credit, mid stream gather systems are one of the first things sold off. This is a sweet spot for them. He thinks they are in a very good place in terms of buying them. They have big prospects ahead of them. They are more affected by propane than gas prices. It is probably finding a base here. There is not much down side and lot of upside.