PEMBINA PIPELINE $39.55 - Toronto symbol PPL

PEMBINA PIPELINE $39.55 (Toronto symbol PPL; Shares outstanding: 336.0 million; Market cap: $13.5 billion; TSINetwork Rating: Average; Dividend yield: 4.4%; www.pembina.com) owns pipelines that carry half of Alberta’s conventional oil, 30% of Western Canada’s natural gas liquids (NGLs) and almost all of B.C.’s conventional oil.

Pembina also owns extensive facilities to extract, process and store NGLs.

In the quarter ended September 30, 2014, Pembina’s cash flow per share fell 6.2%, to $0.61 from $0.65. But that’s mainly because the company hired new employees and more consultants to support its continued rapid growth.

Pembina recently approved a capital spending program of $1.94 billion for 2015, up 36% from 2014. The company will mainly invest these funds in projects already in progress, almost all of which have long-term contracts with customers already in place. That cuts Pembina’s risk.

The stock trades at 16.3 times the company’s forecast 2015 cash flow of $2.42 a share. Pembina raised its monthly dividend by 3.6% in May 2014, to $0.145 from $0.14. The stock yields 4.4%.

Pembina Pipeline Corporation is still a buy.

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