Pembina Pipeline Corp (PPL.TO)

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.

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.