James TelfserTC EnergyTRP.TOCOMMENTAug 27, 2013

Classic bond proxy squeeze. Names with really good growth (KEY, ALA) won't do as poorly. High quality, but growing at only 6%. Trades ~20x PE. Executing well. Strong beat last quarter. Another $7.7B in sanctioned projects. Expanded backlog. Guided to upper end of range.

Will start to do well once yields come down. Don't expect anything from it in the next year.

It's so hard to build pipelines in Canada, so it you hold these stocks, you should receive strong returns. He prefers Pembina, and he ranks TC at #3 which faces high yields and slower growth. TRP acts like a bond, which is hitting the share price.

Exposure to natural gas and nuclear, which have brighter futures than oil.

He bought some yesterday. With all the infrastructure spending, there have to be more pipeline expenditures going forward. Valuation has come back, decent dividend yield. Somewhat more defensive.

Its growth is in the 7 to 8% range. It has a huge backlog of projects and is adding more. Has superior management which has started an AI initiative for optimizing its pipeline. His expectation of natural gas prices is that they will go nowhere in North America. Natural gas is above the 5 year storage levels and a milder winter is expected. It needs more liquification facilities in Western Canada.

Another beat. Approved $7B in new projects, and new ones likely to be announced this year. Numerous tailwinds. Increased guidance. Whole space is on fire.

Valuation is 21x PE for 2028, growing only ~6%. Better choices for new $$ include KEY, TA, GEI and AQN.

More of a pullback is probably in the cards. Let's look at the chart. We broke out from strong consolidation in 2025. It tested that somewhere in the low $80s. For new $$, he'd wait for that at a minimum. Risk to the downside right now, and it could even get back into the $70s.

Not a lot of opportunities for growth. A lot of debt, but committed to a big dividend. He prefers TOU.

Pulled down toward the 200-day MA, so an opportunity to pick up shares. RSI is down around 29, indicating it's oversold. Nice, steady name with pretty low beta (half that of the TSX). For the conservative, dividend part of your portfolio. Yield is 4% and safe, expected to increase over coming years.

Pipeline names serve an important need in a portfolio for those who are income-focused. Sector's been hot, valuations have come up dramatically. If you own, continue to hold. Growth outlook quite strong. 

Pipelines will definitely benefit from the need for power for AI. But they can't ship more than is already allocated, so they don't get as much operating leverage as some other companies.

Pipelines are not quite as good as utilities for safety, because they're perceived as being commodity-sensitive (even though they're really not). This name will give you a good dividend and safety. You'll get your dividend, and the safety means you can sleep at night (and that's worth something). You can get diversification via funds and ETFs.

Expensive here. Growth is smaller, more stable and consistent. Good long-term name. Wait for lower valuations to get in.

PPL has a higher yield and more growth projects.

Strong Q1. Expanding project backlog. Thirst for AI data is helping. What's not to like -- the valuation. Really expensive here, ~23x PE for 2028, growing at only 6%. Doesn't mean it can't go higher, but it's always about risk/reward. He'd be selling calls.

Better buys are ALA, KEY, GEI, and TA.

It is one of the most expensive of the midstream companies -he owns other pipelines. It is in a good position with natural gas infrastructure and growth of supply. Hold for the long term - he is not concerned about the short term.

Likes the business of pipelines -- local monopoly, contracted cashflows. Problem today is that their value is not lost on investors. A HALO stock, which AI can't replace. He'd trim, look for a better valuation to enter.