Pembina Pipeline Corp (PPL.TO)

His only concern with Interpipeline are rising interest rates that will pressure these pipeline companies. He'd rather buy en energy producer like Pembina which has a comparable yield, but higher dividend growth.

It's been contained in a trading range for the past two years. It's a so-so chart, not bad. Worth holding for the 5.3% dividend yield.

Utilities are more volatile in a rising rate environment. He has TRP-T and ENB-T plus IPL-T, but there is nothing wrong with this one. It could be vulnerable if rates rose sharply.

It is a big company with better growth opportunities. Every time he compares to Inter Pipe, he can’t convince himself to move to Pembina. The fear of higher interest rates is hurting this sector as a whole.

The challenge with the pipes is that they are sensitive to rates and are caught up in transpiration issues.

A great name that is being ignored. They have a really good balance sheet. They don’t have to go to the market to fund growth. They are not exposed to large projects so don’t have the risks. He models an 11% growth rate. It is too cheap. He thinks the asset is being miss-priced.

They have been the best out of the group. The company is doing well. You might get a bit of a better entry point over the next six months but it is one he would look to put away.

Veresen assets are helping. Accretive acquisition in the Duvernay in January. 5% dividend for a name with good visibility. (Analysts’ price target is $50.27)

Pembina Pipeline (PPL-T) or AltaGas (ALA-T)? He doesn't particularly care for one over the other. In terms of safety, he would probably prefer this one, although the yield isn't as good. It’s trading right up at its FMV, and has more or less tended to for some period of time. Altagas would have to fall 23% to get there. The balance sheet has been slipping, and the dividend is far from being covered, which worries him quite a bit.

Acquired Veresen in October. Pipelines/storage is their big game, but the problem is getting pipelines to either coast. It's had a whipsaw action with shares so far this year, but it is a strong company. Their bond rating would be BBB low so they are investment-grade. They are growing.

Sold a July $40 Put for $1, and bought a $46 Call against it with a July expiry. He is a little more sanguine about pipelines than he is with oil companies. This pays a very nice dividend, which is the reason he would own it. You’ve created a synthetic Long position doing this. It's the same as owning the stock outright without the dividend.

Just did another accretive deal in the Duvernay. Has a number of tailwinds happening. Their volumes are ramping. They bought Veresen which is integrating and going to be accretive for them. Strong natural gas liquid pricing should help them. Sees them growing earnings at 24%. Not cheap, but is reasonable given the growth and the quality. Dividend yield of 4.8%. (Analysts' price target is $51.50.)

These are local Alberta pipelines, and not facing the same kind of political headwinds the big pipeline companies seem to be experiencing. Feels the dividend is relatively safe and management is good. Despite problematic oil prices, new capacity continues to come on from the oil sands. If you want to buy for the dividend, it is a good, safe investment. He is not as negative on the oil/gas sector as some people are.

(A Top Pick June 19/17. Up 6%.) He still likes this. It is in a great position. They acquired Veresen which did a lot of things for them. It was a financial accretive deal, and diversified their hydrocarbon mix to more natural gas. It gives them a really good pipeline of growth projects. We should start seeing the benefits of that. It gives you a 5% dividend yield, which will grow at 10% a year.

They just completed the acquisition of VSN-T and it brings them into some interesting new areas. The big benefit was VSN-T’s LNG project. PPL-T also have some approved capital projects that should earn a competitive return on their capital. He owns some others in the space, however.