Pembina Pipeline Corp (PPL.TO)

Pembina Pipeline (PPL-T) or Inter Pipeline (IPL-T)? Payout ratios are creeping up on both. Also, they are not as tied to commodity exposure as some of the other pipelines. However, it ultimately comes down to how good their counterparties are, or how good the shipping contracts are. They are getting expensive again. Probably got too cheap. At these levels he would probably be looking to taking off exposure.

Pipelines are the price makers, but they may have to give some price concessions in this current environment. They continue to show excellent results. They just raised their dividend and he expects more dividend increases.

(Market Call Minute.) Has recovered from the bottom.

(A Top Pick Feb 23/15. Down 10.82%.) Still likes this. Got up to about a 33% exposure to commodity prices, but by 2017-2018, they are going to be back to about a 15% exposure. That will be great, and given the pipeline contracts that they have, it is a good story.

The pipeline companies have held up better than some of the oil and gas producers. They have hard-to-replace assets. They pay a dividend and are dependent on the need to move oil rather than the exact price.

(A Top Pick Dec 12/14. Down 13.06%.) Sold this in the fall. He likes it fundamentally on a long-term basis. Pipelines are monopolies as we are not building any. Also, likes the dividend they pay.

(A Top Pick Feb 26/15. Down 28.27%.) Like all pipelines, it got painted with the same brush as energy companies, even though they don’t own energy. Has a good yield and they increased their dividend last year by about 5%, and he expects the same kind of increase this year.

Likes the midsize pipelines. This company has seen its share price really falter, but that is just in line with pretty much what the sector is doing. Has no problem with an investor owning this. The yield is pretty hefty at about 6.5%.

(A Top Pick Dec 29/14. Down 29.02%.) Suffered because of the collapse of the midstream product prices, etc. They know that, so are back to “take and pay” or “cost of service” up to 82% versus the 70% it was before. Stay away from this until there is firmer pricing action in energy.

(A Top Pick Dec 12^th/14. Down 19.68%.) Got stopped out in July. He is just waiting to get back in. A great company. All of the pipelines are monopolies.

Has not owned this, but would probably look at owning it. Selling off in a lot of sympathy with what is going on in the US, where some of the names dropped drastically and where they have cut some of their dividends. Looking interesting for the first time in a long time. It certainly looks like it is near the bottom.

This has been under a lot of pressure, as has most Canadian energy companies. His favourite is Suncor (SU-T), but this one might be a good trade here. They were oversubscribed on the new issue. You’re going to see a lot of investors coming in and looking for trading opportunities and to do some bottom fishing. This is a midstream company that does a lot of processing as well as pipeline aspects. The dividend has been secure so far, but it could be in question. He would wait and see.

(A Top Pick Dec 5/14. Down 11.44%.) Pipelines have held up reasonably well, but even they have not been performing that well recently. He has slimmed down his positions in the pipelines. There is a general feeling that the oil industry in Western Canada is in for an extended period of contraction. Dividend yield of 5.4%.

P/E ratios are high on the pipes. He has been adding to it over the last couple of months. The dividend is increasing at 5-10% per year. They have a good book of construction projects coming on.

People buying this are looking for a dividend yield. It is less sensitive to oil prices than interest rate increases. They are paying out what they are earning.