Pembina ups your dividend

Article Excerpt

PEMBINA PIPELINE, $48.13, is a buy. The company (Toronto symbol PPL; Shares o/s: 502.4 million; Market cap: $25.2 billion; TSINetwork Rating: Average; Divd. yield: 5.0%; www.pembina.com) has now completed the acquisition of Kinder Morgan Canada for $2.3 billion. That firm owns crude oil storage and terminal businesses at Edmonton and Vancouver wharves. It also operates a Vancouver port terminal for grains and other bulk commodities. In addition, investors note that Pembina paid the U.S. parent of Kinder Morgan $1.6 billion for the U.S. portion of the Cochin pipeline. That gives it 100% ownership of Cochin, which pumps NGLs between Alberta and Chicago. The new operations help strengthen investor value: they should add $350 million to Pembina’s expected 2020 gross earnings of between $3.25 billion and $3.55 billion. The company also expects it can increase that annual contribution by $100 million over the next few years. Thanks to those higher earnings, Pembina plans to reward investors by raising its monthly dividend by 5.0%. The shares now…

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