Pembina yields a high 6.5%

Article Excerpt

PEMBINA PIPELINE, $41.10, is a buy. The company (Toronto symbol PPL; Shares outstanding: 550.3 million; Market cap: $22.9 billion; TSINetwork Rating: Average; Dividend yield: 6.4%; www.pembina.com) last increased its dividend by 3.6% with the October 2022 payment. Pembina now pays a quarterly dividend of $0.6525 a share. The new annual rate of $2.61 yields a high 6.5%. Pembina also plans to buy back up to 5% of its outstanding shares over the next year. Buybacks reduce the number of shares outstanding and give remaining shareholders a greater stake in the company. In August 2022, Pembina formed a joint venture with private equity investor KKR & Co. The deal saw the two firms combine their Western Canadian natural gas processing assets. Meanwhile, the partners are now selling their 50% stake in the Key Access Pipeline System in Alberta for $662.5 million (Pembina’s share is $397.5 million). That cash will help cover the $730 million Pembina expects to spend on capital projects and upgrades in 2023. Pembina Pipeline is…