Pembina Pipeline Corp (PPL.TO)

Natural gas is a seasonal plan; you can't predict supply/demand year to year. PPL is volatile, between $48-58. He does like the chart, because it reveals $52 as resistance and support. Now, it's bouncing off support, not a bad thing.

META is building a big new data centre near Edmonton which could help Pembina. It has a reasonable P/E and pays a 5% dividend with a 57% payout ratio. Part of the question was on borrowing to invest. He feels that if the borrowed money is used properly then it is good but you need to use common sense. Consider stocks that grow regularly year after year and pay better dividends than the interest on the loans. However the liquidity in the markets can really shake people out.

Really likes it. If you have a bit higher risk tolerance, you get a lot more upside. Yield is similar to that of ENB, but with a lot more growth. LNG project will come online in BC in 3-4 years. Potential META power centre. A play on the still-very-strong outlook of nat gas in Western Canada. Faster dividend and cashflow growth.

He's been adding here in the low $50s. Down in sympathy with rest of energy, but that can reverse any time (as we're seeing today). Very high quality, infrastructure-like assets.

Complementary to ARX -- it's more of a producer with some infrastructure, whereas PPL is almost 100% infrastructure. Temporarily ran up on news about working with META. Now KKR is selling its minority stake in a JV with PPL, but concern is that PPL is the one who's going to buy it (to the tune of $5-7B). 

He doesn't really care. Company's really well positioned for future LNG in 2027, has great amount of gas processing all throughout the Basin. Power demand from nat gas is on the rise. He continues to buy at full weights in all client accounts. Yield is 5.33%.

He's been cautious on the pipes. The pipeline ETF in the US is hitting RSI new lows for the year, as are a lot of the pipes in Canada (including the best-performing one, ENB, which he owns). Fine for yield.

People looking at long-life, more-utility-type assets are focusing more on electrical power generation. In that camp, you might look at CPX.

Likes and owns both. If she had to buy one today, it would be PPL. ENB has already seen growth. PPL lagged for a lot of this year, flat to negative, up until last week with Alberta data centre announcement. Strong management and strong track record.

Owns pipelines and midstream assets (where nat gas goes through, and they clean it up and send it out). Good growth projects on the West Coast with, potentially, Cedar LNG. Likes it a lot. Good dividend, which grows. Good balance sheet. Core holding.

Chart shows an emerging downtrend. Support around $49.50. Hard to say if range-bound between $49.50 and $58.50, though it is creeping up toward the high end. He'd want to see it break out above $56-57, or at least take out the previous high so you're not in the trend of lower highs anymore.

Likes the technical picture. Trended up, and has been going sideways. A break above that (expects it later in the fall) is quite positive. Right space, which has been beaten up a bit. Good risk/reward plus a nice dividend. 

If it breaks below the lower channel, then something's wrong with the story and you wouldn't add more. Yield is 5.24%.

Worries over tolling on one of their pipelines has pressure PPL, but are well-positioned for future growth in energy infrastructure where more spending in pipelines looks likely. The dividend is safe. Has a low valuation and pays a decent dividend, though in the penalty box now. Stick with it. Good to buy now cheap.

Head-scratcher as to why it hasn't moved along with TRP and ENB. Perhaps because those 2 names are the biggies where $$ flocks to in the sector. Unparalleled strategic positioning for nat gas and oil infrastructure in Canada. 80% of cashflows are contracted fee-for-service, and this funds the dividend. Good capital appreciation plus dividend growth.


Cloud on new contracted price for Alliance Pipeline was overblown by analysts, impact is minimal going forward. Cedar LNG and other levers for growth. Yield is 5.50%, and growing ~3% a year.

About 70% of the business is take-or-pay -- no volume risk or commodity price risk. Another 20% is on fee-for-service contracts, where there is volume risk but no commodity exposure. Rest has commodity exposure to nat gas and oil. 

Over 10 years, has been competitive with the TSX. Compounding total shareholder returns just over 10%. A bit better than its energy infrastructure peers. Beta is about 0.7, low risk. Trading at low end of the range. Yield ~5.4%, and growing at a 5% pace for foreseeable future. Good sightline to high-single or low-double-digit return.

Surprised by underperformance. If he could pick it as a Top Pick again today, he would. Re-contracting of tolls on Alliance Pipeline bought from ENB was worse than expected. Really well positioned for increase in nat gas production in Western Canada. Continues to buy.

The worst-performing infrastructure-pipeline name in the short term. Are some issues with an asset in Canada where the regulated pricing has been set lower. That's holding this stock back. A well-run business with good assets, but has volatility. It has more outlets for growth vs. peers like ENB. Can buy this for the dividend and wait. The PE is low, and will always trade at a discount to peers, because less of its cash flow is regulated.

Macro environment is tough for energy and energy infrastructure. 200-day MA starting to trend lower, not a fantastic sign. Regulatory environment isn't that helpful either. Nice yield of 5.8%, which will probably remain steady going forward.

Not sure that government's new openness to exporting energy gives him optimism, as the stock price isn't reflecting that.