PEMBINA PIPELINE $40.02 - Toronto symbol PPL

PEMBINA PIPELINE $40.02 (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 December 31, 2014, Pembina’s cash flow per share fell 16.9%, to $0.49 from $0.59. However, that’s mainly because lower oil and gas prices cut volumes and profit margins at its NGL extraction business.

Pembina plans to spend $1.94 billion on capital projects this year, up 36% from 2014. It will mainly invest these funds in projects already in progress, almost all of which have long-term contracts with customers in place. That cuts the company’s risk.

The stock trades at 19.6 times Pembina’s forecast 2015 cash flow of $2.04 a share. It pays a monthly dividend of $0.145, for a 4.4% annualized yield.

Pembina Pipeline is still a buy.

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