Pembina Pipeline Corp (PPL.TO)

He sold out a while ago on valuation. It is experiencing contracted earnings. It will be fine over time, however. There may be more pressure on it in the near term.

Some of the servicing agencies have taken quite a beating. He can see people hitting the fracers and the drillers, etc., but the pipelines are gatherers, and transport both oil and gas liquids. They have an essential part in that whole transportation system, mainly in Alberta and Saskatchewan. This company has long-term contracts with big names. They have built up a backlog of projects that are coming on stream. Forecasts for EBITDA next year is up 19%. Dividend yield of 4.35%.

A midstream operator and is an energy investment. Had a nice run over the course of the last 12 months. Pays a good dividend and should increase it nicely. Lots of growth projects. Good balance sheet.

We are going through some unusually large price changes now. Longer term, these types of companies are mid streamers, so the way basins have been reconfigured for new technology, means we have to rebuild many parts of the infrastructure in North America. This company is participating in this huge build out in infrastructure. It will last for many years to come.

This has recently been one of the weaker performers in the group. Because of this, he has reduced his position substantially. In the long run, this is a great industry, because they are long life assets, with long contracts and very little commodity exposure. In the short term they can be impacted psychologically. If you own, consider trimming this or selling it.

They have more exposure to commodity prices than IPL-T. He likes it and adds it for new clients coming in. 4% dividend.

Pembina (PPL-T) or Inter Pipeline (IPL-T)? Every investor in this country has to own one or the other. Charts are looking really good. This one has outperformed IPL year to date.

As we are entering all this volatility, you have to have a strategy of stop losses. The only issue here is that the yield is fairly low now. This is a good time to trim some back. He would rather be looking at other sectors where you get a little bit higher yield. Utility would be a better place to be. He would also rather be holding cash for now. (See Top Picks.)

Not sensitive to the price of oil, it is more of a volume game. They have booked a lot of new projects which all depend on energy prices. He can sleep a night owning a company like this or a Keyera (KEY-T), given their irreplaceable assets and their good growth. Valuations were a little high, and maybe that is why it has pulled back.

Which pipelines should he buy? His favourites have been in the juniors, Pembina (PPL-T) and Inter Pipeline (IPL-T). Likes these because they operate virtually all in Alberta and somewhat in Saskatchewan and BC. They don’t face the kind of political problems that the larger ones do. Will probably show better growth in a reasonable market and he would say either of these 2. They give reasonable dividends and good growth potential.

Upward trend is still there. Technicals are mixed, below its 20 day moving average and performing as is the market. Seasonally it is strong January to May of each year. It is okay. Hold and there should be another opportunity for it to move early next year.

(Top Pick Oct 2/13, Up 11.94%) He thought pipelines were getting a little ahead of themselves. This one is still on the trend line. The longer term picture on this one is good.

Another company pulled out of the area and an analyst thought it would affect PPL-T. Great balance sheet and management. It is worth holding right here for the yield. Thinks the worst is over.

Is a core holding. Don’t sell it here. It is going to get harder and harder to move the dial relative to the others. They have very stable assets. Dividend growth has not been as fast as the others. She prefers the smaller mid-streams. She owns all of them.

(Top Pick Sep 16/13, Up 69.97%) They have a lot of committed capital in terms of expansion. It has gone pretty far, pretty fast so don’t put any new money into it. They will continue to increase the dividend if you hold on to it.