Opinions
Brian Acker, CA
Kinder Morgan Canada
KML-T
COMMENT
Mar 14, 2018
$18.560
Stock price when the opinion was issued
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DON'T BUY
The expectation was that the parent company would take what was left over after the sale of Trans Mountain. That has not yet happened, so the stock has dropped in value and returned capital back to investors. There has been no discussion on future plans, so there is nothing to get excited about here. No reason to own it.
DON'T BUY
The payout ratio on PPL is about 98%, so there is not a lot of wiggle room. He does not own this one. The company is looking to buy KML. He has a short on this simply because they are already long KML. The balance sheet is better than most pipelines out there. However, it does not score cheaply enough on valuations for him to want to buy today. Yield 5.2%
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PAST TOP PICK
(A Top Pick Feb 14/19, Up 5%) Kinder Morgan Canada was purchased by Pembina Pipeline. This was the TMX project. He was hoping for a better price in the acquisition, so the return was muted.
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Kinder Morgan Canada (KML-T) vs Kinder Morgan (KMI-N). He is luke-warm on both of these. Higher interest rates will put downward pressure on these pipeline/utility sector stocks. KML is trading above fair value he thinks and does not have the earnings to support these prices.