Stockchase Opinions

Rebecca Teltscher Pembina Pipeline Corp PPL-T TOP PICK May 15, 2025

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. 

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.

(Analysts’ price target is $60.58)
$52.420

Stock price when the opinion was issued

pipelines
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BUY

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.

BUY

Good run second half last year. Then a deeper correction, but it's broken out of the downtrend. Established pretty nice support ~$50. Technically encouraging, looks to be back under accumulation.

BUY
Retiree wants income and less volatility.

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%.

BUY

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.

BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

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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BUY

She owns it for the dividend of 5 1/2% and cash flow. Has a 90% payout ratio. It has renewed it's share buyback and increases its dividend. Pipelines are cash flow machines. She sees 15% per share growth in 2025. Fundamentally it scores 8 out of 10 and valuation 9 out of 10.

BUY

Loves it. Income name mainly, with some earnings growth. Probably the worst performer of the group over the last year. Does have midstream infrastructure, so assets aren't as bulletproof as those of an ENB. ENB is always his first choice, though PPL has better long-term growth outlook. He'd buy here.

BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

PPL is up 4% this year and 25% over 52 weeks. It's 18X earnings with a 3.23% dividend that has shown decent recent growth. Debt is high as is common in the sector, but OK earnings growth is expected over the next two years. Cash flow is high and stable, though we would like to see higher free cash flow conversion. The share count has declined over the past six years with buybacks. All in, we would consider it OK. Fundamentals and sector outlook are fine. It is priced well. We would not expect huge growth here, but we would consider it decent for income and potential growth over time.
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TOP PICK

It is the third largest mid-streamer in Canada. He owns all three but considers this one the most attractive of them. Has the largest infrastructure in the Montney region. It is positioned to participate in the increase of LNG exports from the BC coast. Its dividend is 5 1/2% with a payout ratio that is more conservative as well as having a healthier balance sheet than the other two. It is the same price as a year ago.           Buy 13  Hold 6  Sell 0

(Analysts’ price target is $60.01)