Pembina Pipeline Corp (PPL.TO)

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.

PPL-T vs. ENB-T. He prefers TRP-T or ENF-T. ENF-T yields almost 7% and has higher growth expectations than the parent, ENB-T. It is down at the moment. TRP-T is natural gas weighted and he believes it has a brighter future than oil.

An extremely well-run company. They are working so many projects, plus they just acquired Veresen, which they have to digest. If you are going to play energy, this is an interesting way to play it, because about 70% of it is contract based. They just boosted their dividend again.

Chart shows an old top in 2014 which was violated, and it managed to go higher and higher. If your original buy was based on the 10-day moving average breaking the 21 day, use that as a Sell discipline. If it goes below the 21 day, then you Sell. Other than that, just ride it. Dividend yield of 4.85%.

Just had their quarter recently, and beat by 8%. Their commodity exposed businesses were weak, but should really be good in Q4. Their Veresen assets were performing very well. He is modelling very brisk growth of 18% over the next few years. 60% payout ratio. Likes this name.

They have closed the VSN-T acquisition. It is another leg up in growth. He would love to buy it at $40 to $41 but this is a decent place and stock to own.

Pipelines have been a weird place to be, but this is one of the strong ones. From 2014 to 2016, it had a big downtrend, but was followed by a nice upswing. The trend had a bit of a break a few months back, where the market was wondering if the value had been fully realized. For the next 6 months if we have a pro-growth rally going in other areas, it doesn't mean you are not going to find valuations that are out of whack. Prefers Inter Pipeline (IPL-T), which has been beaten up a little more and has a higher yield. He would like to see this one hold just below the $40 range. Below that, we are actually looking at capital erosion.

One of the local companies in Alberts that gathers oil from the bigger guys. He likes this as well as Inter Pipeline (IPL-T). A utility that’s in a non-political situation in Alberta, and they don’t have to worry about building a pipeline. Good dividend. Has some growth potential.

In the midstream gas space. Recently completed an acquisition of Veresen which has increased their capacity and increased their potential for future growth. Most of the pipelines have come down in the last couple of weeks. Expects there will be growth opportunities over the next few years. Dividend yield of over 5%. (Analysts’ price target is $50.)

He sees their acquisition of Veresen very favorably and thinks that it really extends their base to grow earnings. He would consider taking a closer look, but still thinks none of the pipeline companies are cheap right now.

He does not own pipes right now. This is a good one and if he had to own one it would be in the top group. The risk is simply that the energy markets are not attracting any cash flows. You are fine to collect the dividend of 5.2%.