Pembina Pipeline Corp (PPL.TO)

Looks pretty good here. It is fine if you are only looking for yield.

Stock chart doesn’t look that great and he has always thought they were a little bit overvalued, particularly where oil prices have come. Have a lot of projects in the pipeline, but he doesn’t think they are all going to come through. He would suggest Enbridge (ENB-T) instead.

Have increased their dividend by 6% this year. He likes their assets. They have a big CapX program of $5.5 billion over the next 3 or 4 years. Most of that is cost of service or fee for service business. This will get down their energy exposure, which is 35% and it will get it down below 20%. Dividend yield of 4.51%.

Just increased their dividend and their ability to pay the dividend is still in good shape. Got stopped out in the fall, but is probably a name he will come back into. He would be looking at this more towards the fall after we get through these macro issues with Greece and the possible rate hike.

A well managed company. On a longer term basis there is some concern that relates to the oil sands, which he is negative on as an economic driver. It pays a good dividend and has projects still under way.

They have the end to end value chain. They have the network advantage. Their earnings are becoming more stable. Very stable contracted revenue streams. They continue to announce new projects and to move them forward. They can continue to grow in this environment.

(Market Call Minute) Buy KEY-T. It is more natural gas focused and is building its cash flow at a faster rate.

Stock vs. Stock. IPL-T vs. PPL-T. Both are excellent companies. The Alberta election has some negative implications for these. PPL-T has the better risk return profile going forward. Both will grow their dividend single digits.

Right now we are moving into the time of year when the energy sector can sort of fall off. However, this would not be a bad position to be in, in the energy sector.

Feels the oil sands pipeline business will keep on going. Long-term demand for oil is up, which will help this pipeline. The difficulty is that they have 33% of their business in commodity sensitive areas. Their goal is to get it down to 17%-18%. If, as and when these liquids recover in price, it will be a very positive leverage for them.

A pipeline. He sold this out of his equity platform. His equity platform objective is to outperform the stock market and he doesn’t think this is going to outperform the stock market. However, he still has it in income oriented accounts, because it pays about a 4% dividend and is a relatively stable stock. A well-run company. Probably doesn’t have a huge downside from current levels.

Very expensive. His bet is that a year from now this will be significantly lower.

This sector as a whole has held in remarkably well, especially given what the producers have done. The smaller companies like this are better positioned. Given what has happened to the oil price and the producers, there is a potential risk that sooner or later is a number of projects these companies go into will grind to a bit of a halt.

At an interesting entry point. If you are looking to build a position over a long time, you might want to get into this a little bit. This is the largest among the Canadian peers. Have about $6 billion of secured CapX program over the next 3 years, which is going to double their EBITDA. Great management team.

It has come down quite a bit, but he likes the assets. They touch more than half the oil moving around Alberta. They have assets where he expects development to continue. They have a decent dividend and decent growth prospects. If we run into more troubled commodity prices for longer there will be pressure on the stock price, but as for the information they have now, it is in the stock price.