Opinions Stockchase Insights
Pembina Pipeline CorpPPL.TOBUY ON WEAKNESSNov 06, 2024
Stockchase InsightsStock price when the opinion was issued
As of Jun 30, 2026. Market Open.
You might be interested:
Western Canada has many opportunities for more production and PPL is in the middle of that. Is a decent long-term gold with a good dividend.
Bruce MurrayBoth benefit from AI centre demand. Pembina is building a 1.8 gigawatt natural gas plant in Alberta. Half of ALA's business is in the US, regulated utilities, in Virginia--the world capital of data centre traffic. ALA also has activity in Western Canada. ALA's growth rate is higher than Pembina. ALA gets the slight edge.
All energy stocks have come off because we've had (cynically) a "peace scare" in the Middle East. Energy sector will continue to be robust.
Also likes, and owns, TOU.
Brendan CaldwellA defensive holding. Surprised by how well the pipeline stocks have done. War has definitely had an impact on energy infrastructure. Still a standout to grow, with lower valuation and excess capital.
John ZechnerPipelines and utilities have soared, because of energy demand from data centres. PPL is quality with a healthy balance sheet and growth outlook. Most of their projects are already sanctioned.
Teal LindeTheir PE is lower than TC and ENB. Better scale and diversification from all peers.
Teal Linde
Is bullish in gas with LNG exports, which PPL is exposed to. PPL's contracts are long-term which pays the stable, growing dividend.
Rebecca TeltscherAPO has pretty smart people, and they're seeing an opportunity here. Purchase was from KKR, so nothing much changes.
As for PPL itself, trading a bit expensive with growth catalysts of 5-7%. Nice, visible project backlog. Nice dividend. Wouldn't add here, but you'll do OK if you own it.
Still thinks KEY is the better buy.
PPL is more pure-play pipeline infrastructure. Better dividend yield. Contracted cashflow gives you earnings and revenue visibility. This would be his preference.
ALA gives you a mix of energy infrastructure (~45%) with regulated utilities (~55%). Utility component gives more stability, but lower dividend. He's not a huge fan of utilities unless they're tied to AI infrastructure buildout.
(Note the shortish timeframe.) Delivering what he wanted. Gives the portfolio some ballast and generates some income.
John ZechnerGreat operator. Might need to raise some equity fairly soon, as its recent acquisition will need to be financed. Recent downgrades. Good dividend yield. Good for a long-term investment.
Note: Owned by his colleague, Christine Poole.
John O'Connell, CFA
EPS of 60c did miss estimates of 75c; revenue of $1.84B also missed estimates ($2.11B). EBITDA of $1.01B missed estimates by 4%. Pembina's 4Q Ebitda may expand by high-single digits, assuming it reaches the midpoint of narrowed guidance of C4.23-$4.33 billion. Contributions from increased stakes in Alliance Pipeline and Aux Sable will likely be the primary drivers, outweighing pressure on lower re-contracted tolls on the Cochin pipeline system. The narrower differential between US Gulf Coast and western Canadian condensate could continue to limit interruptible volume on Cochin. The Marketing segment may be little changed again as the fully consolidated Aux Sable asset and improved NGL margin -- partly due to weak natural gas prices -- buoy Ebitda. Capital spending in 4Q could be similar to 3Q's $262 million, supporting free-cash-flow generation to cover the dividend. It is up 24% this year, but could continue to benefit from lower interest rates. The quarter was clearly not perfect, but with its valuation and 4.9% dividend we would not necessarily see it as a sell if one wants sector exposure.
Unlock Premium - Try 5i Free