Opinions
Rebecca Teltscher
Pembina Pipeline Corp
PPL-T
TOP PICK
May 15, 2025
Stock price when the opinion was issued
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In mid-December, PPL provided a business outlook, which we think was decent, but did result in a bit of a downward move in the stock and also saw it get a broker downgrade. The sector has also been a bit weaker with general inflation, rate and economic concerns. But, it is still up 15% in the past year, offers a solid, growing dividend, and consensus calls for low, but steady, growth, in the 3% to 5% range. At 16X earnings, we think it looks good for income primarily, but with at least some growth potential.
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Growth estimates of pipelines have really gone up in past few months with nat gas prices going higher. More throughput looking likely on Trans Mountain. More incentive in Canada to talk about moving oil East-West and North-South.
Perhaps #4 or 5 on his list of which pipes to buy first. Solid company, valuation more attractive than previously. You won't get hurt with this one.
Great operator over time, nice dividend yield. All pipelines have had a rough patch -- markets correcting plus cloud over tariffs. Tariffs don't really impact it, as it's just a toll road. With Canada's interest rates going lower, and demand generally going up over time, this name should be OK.
Looking at how the chart's acting, you may want to wait for more of a correction to buy. If you're a long-term investor, sit tight, collect the dividend, and you'll be OK.
It was a top pick last month and he still likes the valuation. There is lots of growth ahead for natural gas since the demand for natural gas is expected to increase in North America in the next 10 years. This is due to the switch from coal to gas, LNG, on-shoring, and the needs of data centres. PPL is well diversified, has good supplies, a healthy balance sheet and good growth. There was a draw-down early in 2025 but he is not sure why.
Canadian infrastructure name. She owns for income in client portfolios. Robust business model. Often has long-term, take-or-pay contracts; visible cashflow stream. Guided that it can grow EBITDA (cashflows) by single digits over next few years. She'd expect dividend increases to reflect that.
Stock's pulled back with underlying commodity prices. Should have lower volatility than energy producers. Yield is 5.3%.
It holds a dominant position in the natural gas and LNG market. It has less leverage than some other pipelines and is self-funding from free cash flow. It has entered into a joint venture for a data base to be built on their land. Has a good dividend of 5 to 5 1/2% and the risk/reward is quite attractive. A comment was made that the telecoms are lagging even with falling interest rates.
PPL fell recently on news of lower tolls, but this of course comes with the territory of a regulated business. Considering its valuation, stability, cash flow and dividends, we would be comfortable buying a full position for income primarily and some long term growth potential.
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Integrated across the entire value chain, from well head to end user. Earns revenue every step of the way for gas and oil molecules. 80-90% of earnings are contracted, and that's what the dividend is based on. Working on really big (for them) LNG export facility off coast of BC.
(Analysts’ price target is $60.58)Likes growth. Good operator, very little commodity price exposure, consistent earnings, very safe dividend. Long-term buy and hold. Yield is 5.4%, and the dividend continues to rise.