Keyera Corp (KEY.TO)

Put in a TFSA? A top pick. You can put it in a TFSA as long as you're diversified across sectors, like real estate and industrials. He likes the nat gas business in western Canada and KEY should do relatively well; nat gas is key for Keyera. Doesn't expect this company to do anything exciting, just maintain its business. This will be a $30 stock, but KEY suspended a billion-dollar infrastructure project and are competing in this area with Pembina. With the new CEO, what is the strategy? A question mark. The stock now is still cheap enough given all that.

Keyera vs. Pembina He owns both. Keyera: pays a slightly higher dividend, but also slightly riskier, due to its mix of liquids and gas processing, so probably more earnings volatility short-term. Pembina is a pipeline play with operating cash flow around 9-10x. They were resilient in the downturn. What's good about both is that they are sensitive to volumes, not the oil price, especially Pembina. The dividends are safe and earnings resilient. If the stocks do nothing, at least both pay more than 8% in dividend yields.

Historically these have been great assets to own. They will follow energy stocks in general too. He prefers to own KEY over PPL. There have been concerns about insolvencies with producers in the energy space with low oil prices. He has added more to their KEY holdings, thinking the natural gas space is safer than oil right now. He would own a couple of holdings in a diversified way.

This is a midstream company that takes natural gas and extracts liquids for octane enhancers and other valuable liquids, while taking a toll from the energy producers. He thinks 30% of their total decline is their association to the energy sector. The other portion of the share decline is related to perceived counter-party credit risk -- will their customers be able to pay them. They have strategic assets in Alberta and we know it is harder to do business in energy in Canada. He is still holding this for now, just be careful of how much exposure you have with the mid-stream companies these days. They do not have a debt problem, so the dividend looks safe for this year he thinks. Yield 9.6%

It's about balance sheet and fear of loss of clients. It's more at risk in an environment like this. This one will struggle. The ones that are safe would be ENB, TRP, PPL, GEI.