PEMBINA PIPELINE CORP. $27.59 (Toronto symbol PPL; Shares outstanding: 167.3 million; Market cap: $4.6 billion; TSI Network Rating: Average; Yield: 5.7%; www.pembina.com) is buying rival Provident Energy for $3.2 billion.
The Provident purchase diversifies Pembina’s operations and should immediately add to its cash flow. As a result, the company is raising its monthly dividend by 3.8%, to $0.135 from $0.13. The shares now yield 5.7%.
We’re raising Pembina’s TSINetwork Rating to Average from Extra Risk.
Pembina Pipeline Corp. is still a buy.