Pembina Pipeline Corp (PPL.TO)

Trading at its fair market value, so he doesn’t see any upside potential.

With weak energy prices, it is hard to get excited about anything in energy. Prefers pipelines where the fundamentals don’t really matter that much if oil is $50 or $100, the stuff has to be moved. In the process of acquiring Veresen (VSN-T), and if it goes through, they are promising a dividend hike. Has a great track record of raising dividends. A good business to be in. If interest rates continue to stay low, you can’t do worse than holding a stock that has a 4% plus dividend.

A little less oiler than IPL-T. They are working on the close of the VSN-T acquisition. It will ensure 5 years of growth on existing pipelines. (Analysts’ target: $50.00).

(Top Pick Jun 23/16, Up 8.60%) The dividend will grow over the years. It had an earnings miss, but the acquisition of VET-T will help them. He continues to hold it.

He added to it a couple of months ago. It has come off like the others. He likes it as well as the VSN-T acquisition. They still have a number of projects that are coming through and the expansion to the States so he is sticking with it.

Energy went out of favour in Jan-Feb as prices weakened, so producers and service companies really got a good shellacking. It has become more apparent that the Saudi’s are trying to keep oil prices relatively higher. It is possible we are going to see more weakness in the group. Even though this is volume driven, there is going to be more weakness. On the long-term chart, it still looks okay. For him, he has moved into a bunch of other sectors that are behaving better. If you think prices can hold at these levels, it is an easy way to participate in energy.

This is currently an attractive entry point. The stock held up quite well through the whole energy decline. They are in the process of acquiring Veresen (VSN-T), which will add to their growth outlook going forward. A good income stock. Dividend yield of 5%.

A really quality name and has been for some time. They control many parts of the Western Sedimentary Basin, and are very strong. It is going to swing up and down with the commodity, even though they have no commodity sensitivity to its earnings. Doesn’t think you can go too far wrong with this.

Switch out of Bell Canada (BCE-T) to Pembina Pipeline (PPL-T)? An interesting comparison. He wouldn’t make the switch. They are very different risk profiles. BCE is a very stable business and you can rely on the dividend and not have to worry about it. Yield of about 4.8%.

An Alberta company and quite active in terms of moving oil and gas. It has done well and has a good dividend. One of the advantages of this company is that it is not an international pipeline, so it has a very few political problems. A good, long term investment.

PPL-T vs. ENB-T. In the energy space these have been stronger performers overproducers. With interest rates moving higher it will be a mixed blessing for pipelines. Their dividend does not look as attractive, but as interest rates go up so are their allowed rate of return through the regulator. Look for which one has the most consistent track record of dividend increases and the best record of dividend coverage. If it is the same stock for each factor, go with it and if not go with the latter factor.

VSN-T was a natural one to get acquired. He is going to hang on to the stock he gets in the deal.

Thinks energy infrastructure as a theme is now under some pressure with this new leg down in energy prices. Infrastructure tends to hold up better than the producers, but if it gets bad enough, they get impacted. This is one of the 2 strongest names in the Canadian universe, but if energy gets much worse, he is likely to reduce his weighting.

He thinks the transaction with VSN-T is fantastic. Cash flow per share will go up and it diversifies their hydrocarbon mix. It replenishes the pipeline of growth projects for PPL-T. Now they have over $20 billion in growth projects ahead of them. (Analysts’ target: $50.00).

They bought VSN-T. She owns PPL-T. She likes the acquisition as it gets them additional growth. Keep the PPL-T shares after the acquisitions. They offer an attractive dividend yield also.