Jon Vialoux Pembina Pipeline Corp PPL-T DON'T BUY Mar 09, 2020

He is adding because of the 5 1/2% yield. The toll dispute was resolved on the weekend and it is ready for a new leg higher. Buy and wait for the market to recognize some of its value.

Has a rock-solid dividend. Prefers TC Energy and many Enbridge, partly because of US policy and the changing view in Canada about building pipelines. PPL would benefit less so than these companies. 

Should benefit from the energy boom. Has held for 5 years, last year hasn't been the best. Can't pinpoint why it's down, but looks good fundamentally. Loves the improving ROC; used to be 5-6%, but now up to 9% (pretty good for a utility). Palatable valuation at 11x EV/EBITDA. 

Macro environment is tough for energy and energy infrastructure. 200-day MA starting to trend lower, not a fantastic sign. Regulatory environment isn't that helpful either. Nice yield of 5.8%, which will probably remain steady going forward.

Not sure that government's new openness to exporting energy gives him optimism, as the stock price isn't reflecting that.

The worst-performing infrastructure-pipeline name in the short term. Are some issues with an asset in Canada where the regulated pricing has been set lower. That's holding this stock back. A well-run business with good assets, but has volatility. It has more outlets for growth vs. peers like ENB. Can buy this for the dividend and wait. The PE is low, and will always trade at a discount to peers, because less of its cash flow is regulated.

Surprised by underperformance. If he could pick it as a Top Pick again today, he would. Re-contracting of tolls on Alliance Pipeline bought from ENB was worse than expected. Really well positioned for increase in nat gas production in Western Canada. Continues to buy.

About 70% of the business is take-or-pay -- no volume risk or commodity price risk. Another 20% is on fee-for-service contracts, where there is volume risk but no commodity exposure. Rest has commodity exposure to nat gas and oil. 

Over 10 years, has been competitive with the TSX. Compounding total shareholder returns just over 10%. A bit better than its energy infrastructure peers. Beta is about 0.7, low risk. Trading at low end of the range. Yield ~5.4%, and growing at a 5% pace for foreseeable future. Good sightline to high-single or low-double-digit return.

Head-scratcher as to why it hasn't moved along with TRP and ENB. Perhaps because those 2 names are the biggies where $$ flocks to in the sector. Unparalleled strategic positioning for nat gas and oil infrastructure in Canada. 80% of cashflows are contracted fee-for-service, and this funds the dividend. Good capital appreciation plus dividend growth.


Cloud on new contracted price for Alliance Pipeline was overblown by analysts, impact is minimal going forward. Cedar LNG and other levers for growth. Yield is 5.50%, and growing ~3% a year.

Worries over tolling on one of their pipelines has pressure PPL, but are well-positioned for future growth in energy infrastructure where more spending in pipelines looks likely. The dividend is safe. Has a low valuation and pays a decent dividend, though in the penalty box now. Stick with it. Good to buy now cheap.

Likes the technical picture. Trended up, and has been going sideways. A break above that (expects it later in the fall) is quite positive. Right space, which has been beaten up a bit. Good risk/reward plus a nice dividend. 

If it breaks below the lower channel, then something's wrong with the story and you wouldn't add more. Yield is 5.24%.