Topic: How To Invest

Q: Hi. Do you think Pembina Pipelines PPL is a buy? I’m curious as to why its stock price is under pressure. Thanks.

Article Excerpt

A: Pembina Pipeline, $28.44, symbol PPL on Toronto (Shares outstanding: 549.8 million; Market cap: $13.5 billion; www.pembina.com) gives you a stake in pipelines carrying almost all of B.C.’s oil and half of Alberta’s conventional oil. The company’s network also transports 30% of Western Canada’s natural gas liquids (NGLs), while its extensive facilities extract, process and store NGLs. Pembina also operates natural gas-processing plants. The stock is down about 38% since the big market decline began at the start of March 2020. In comparison, the S&P/TSX Composite Index is down around 14%. The stock has dropped along with the market as a whole. Still, some other factors have worsened its decline. The most prominent of those factors is the sharp falloff in oil prices brought about by the COVID-19 economic downturn as well as the Saudi Arabia-Russia oil price war. However, most of Pembina’s pipelines operate under fixed-price contracts. And while the company’s long-term dividend and cash flow outlook will ultimately depend on the severity…

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