PEMBINA PIPELINE $32.36 - Toronto symbol PPL

PEMBINA PIPELINE $32.36 (Toronto symbol PPL; Shares outstanding: 310.3 million; Market cap: $10.1 billion; TSINetwork Rating: Average; Div. yield: 5.2%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil output, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil production.

In the quarter ended June 30, 2013, Pembina’s revenue rose 34.9%, to $1.2 billion from $870.9 million a year earlier. In April 2012, the company paid $3.2 billion for rival Provident Energy, which extracts, transports and stores NGLs. Provident was the main reason for the higher revenue.

Cash flow rose 60.9%, to $144.0 million from $89.5 million. Cash flow per share gained 51.6%, to $0.47 from $0.31, because Pembina issued more shares to pay for Provident.

Pembina raised $345.2 million in a share issue in March 2013. The company is using the proceeds to help fund an expansion that could cost up to $1.3 billion by 2015.

The stock trades at 15.1 times Pembina’s forecast 2013 cash flow of $2.15 a share. The company has just raised its monthly dividend by 3.7%, to $0.14 from $0.135. The shares now yield 5.2%.

Pembina Pipeline Corporation is still a buy.

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