Pembina Pipeline Corp (PPL.TO)

Easier geography to understand than TransCanada Pipe (TRP-T). Good yield.

Pipelines in general have not been a bad place to be. The long uptrend seems to be breaking right now. In the short term, you are still getting a couple of higher highs and higher lows so it is attempting a new rally up.

Pipeline returns have never been stronger and there is a more visible earnings growth thesis than any other sector that he has seen. Great combination of growth and dividend. Have expansion projects and pipeline-connections which should boost earnings over 30% over the next 2 years. Have been pinched a little bit by their acquisition of Provident giving them more exposure to commodity-based pricing, frac spreads, which is about 30% of their business now. That will drop to 20% over 2014. Their conventional business is so strong that even frac spread compression, like we’ve seen, will be overpowered.

Likes the pipelines but thinks they are pretty much at the top of the value range. Cash flow was not that great on it. Good yield at 5.9%. Pipelines will definitely provide some yield but doesn’t see the share price moving that much higher. Could see it reaching $30.

They just listed in the US so thinks that US money is going to come in. Great Yield of about 6%. He likes the pipeline because we have this glut of resource and very few pipelines to push it through.

Did a propane takeover at a bad time. Earnings disappointed and there was a sell off. 75% recurrent earnings. Growth prospects in the next few years and when propane recovers this winter, they will recover. He has half position.

Made an interesting acquisition of Provident Energy so there is an earnings catalyst in the bottom line that is coming up in the near-term. Have a good facility at Redwater (?). Feels that the infrastructure build-out for companies like this is going to be critical for the LNG propane movement.

Pipelines hold the whole energy complex together. Investors do well by owning pipelines. Very solid company. Near term there are challenges and are reflected in share price. Low propane prices, lower volumes. Issues are fixable and investors are paid to wait. Longer term the company is significantly undervalued. Significant growth opportunities. Volumes will improve over time. 3-5% dividend increases starting in couple of years and going for many years. Great yield and growth in cash flows.

Made an acquisition earlier in the year and as a result, there was some slippage from an earnings growth perspective as a result of weaker margins in one of the service businesses that they operate in. Unlikely to turn around in the next quarter. There are some great opportunities for them to continue to build the business but there are some challenges in the short-term. Still one more quarter of potential risk. (See Top Picks.)

Missed on the 2^nd quarter, probably due to their acquisition of Provident. This acquisition gave them more exposure to frac spreads. Great midstream operator. They do transport, storage and terminaling for heavy oil out of the oil sands. Cheap. 5.8% distribution.

(Market Call Minute.) Would be comfortable with the stock and this sector.

Looks inexpensive compared to its bigger peers. He has recently started buying this. Can see $28-$29 in 12 months. 6.1% dividend yield.

Recently acquired Provident, a midstream operation so they do have frac spread exposure and is not guaranteed in regards to the return they get.

Just bought. If you are going to go into the yield dance, you are better to go with companies that are going to raise their dividends over time. Not cheap, but has irreplaceable assets.