PEMBINA PIPELINE $39.96 - Toronto symbol PPL

PEMBINA PIPELINE $39.96 (Toronto symbol PPL; Shares outstanding: 320.0 million; Market cap: $12.8 billion; TSINetwork Rating: Average; Div. yield: 4.2%; 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 bought rival Provident Energy in 2012 for $3.2 billion, and that’s now paying off. Provident extracts, transports and stores natural gas liquids (NGLs).

In the quarter ended December 31, 2013, Pembina’s cash flow jumped 39.6%, to $194.0 million from $139.0 million a year earlier. Cash flow per share gained 29.2%, to $0.62 from $0.48, on more shares outstanding.

The gains came from strong profit margins at Provident Energy, as well as pipeline expansions.

Pembina plans $1.5 billion of capital spending in 2014, up 56% from 2013. It will invest 60% of these funds in NGL-related projects and the other 40% in oil-pipeline expansions.

The stock trades at 16.0 times Pembina’s forecast 2014 cash flow of $2.50 a share. It yields 4.2%.

Pembina Pipeline Corporation is still a buy.

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