Updating our High-Growth payers: Pembina Pipeline

Article Excerpt

PEMBINA PIPELINE CORP. $38 is a buy. The company (Toronto symbol PPL; High-Growth Dividend Payer Portfolio; Utilities sector; Shares o/s: 550.0 million; Market cap: $20.9 billion; Divd. yield: 6.6%; Divd. Sustainability Rating: Above Average; www.pembina.com) operates pipelines that carry half of Alberta’s conventional oil and almost all of B.C.’s oil. Investors also gain exposure to Pembina facilities that extract, process and store natural gas. Most of Pembina’s pipelines operate under fixed-price contracts, which cuts your risk. The company has paid dividends since 1998. It last increased your monthly payment by 5.0% with the January 2020 payment, to $0.21 a share from $0.20. The new annual rate of $2.52 yields a high 6.6%. In December 2019, Pembina acquired pipeline operator Kinder Morgan Canada for $2.3 billion. In addition, it paid the U.S. parent of Kinder Morgan $1.6 billion for the U.S. portion of the Cochin pipeline. In the fourth quarter of 2020, its revenue increased 14.0% to $954 million from $837 million a year earlier. Cash flow also improved…

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