Pipeline & Utility Income Trusts & LPs
Recommendation: REDUCE
Unchanged
Risk: MEDIUM
12-Month Target Price: C$17.50↑
Prior: C$15.50
12-Month Total Return: -13.6%
Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
TDWH has PPL as 'Reduce' this morning, with a target price of $17.50 and a predicted drop of 13.6% for the forthcoming year:
Exit, pursued by a bear.
William Shakespeare, Stage direction in "The Winter's Tale"
William Shakespeare, Stage direction in "The Winter's Tale"
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
Nemo2 wrote:TDWH has PPL as 'Reduce' this morning, with a target price of $17.50 and a predicted drop of 13.6% for the forthcoming year:Pipeline & Utility Income Trusts & LPs
Recommendation: REDUCE
Unchanged
Risk: MEDIUM
12-Month Target Price: C$17.50↑
Prior: C$15.50
12-Month Total Return: -13.6%
Any reasons given for the expected drop?
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
One factor that appears evident is that the stock had already considerably surpassed their earlier forecast, and their 'increased' forecast is still way below the current price.GWN789K wrote:Nemo2 wrote:TDWH has PPL as 'Reduce' this morning, with a target price of $17.50 and a predicted drop of 13.6% for the forthcoming year:Pipeline & Utility Income Trusts & LPs
Recommendation: REDUCE
Unchanged
Risk: MEDIUM
12-Month Target Price: C$17.50↑
Prior: C$15.50
12-Month Total Return: -13.6%
Any reasons given for the expected drop?
And:Pembina Pipeline Corp.
(PPL-T) C$22.05
Strong Conventional Pipelines Offset Weak Midstream Margins
Event
Pembina reported Q3/10 free-cash-flow per share (AFFO/Shr) of $0.36,
which was above our $0.33 estimate, but below Q3/09 AFFO/Shr of $0.42.
Impact
MILDLY POSITIVE.
We have made numerous changes to our financial model the net result being
that our estimates increase slightly.
Our target price increases two dollars to $17.50 primarily because we have
lowered our discount rate by 50 bps to 8.75% to reflect a lower government
bond yield outlook, as well as to reflect increased growth opportunities related
to the Cardium oil formation.
Details
Conventional Pipelines EBITDA of $39.8 million during the quarter
increased $4.3 million versus Q3/09 (Exhibit 1). The increase was a result of
1) higher revenue due to changes in receipt point dynamics as well as toll
adjustments, and 2) cost management to reduce maintenance and labour
expenditures. Average throughput during the quarter declined to 361.4 kbpd
from 389.3 kbpd in Q3/09 primarily as a result of wet weather that reduced oil
production in addition to pipeline apportionments that restricted transported
volumes.
Oil Sands & Heavy Oil EBITDA of $19.0 million was comparable yearover-
year. It appears that lower Syncrude operating income, as a result of a
lower rate base from the sale of line fill, was partially offset by connection
fees charged to various oil sands customers on the Horizon Pipeline on a feefor-
service basis.
Midstream & Marketing EBITDA of $11.4 million decreased 48% yearover-
year mainly as a result of tight margins experienced in the quarter.
During Q3/10 the equalization scales were at levels that had not been seen in
years. In addition, the apportionment on Enbridge’s pipelines produced large
swings in the heavy/light differential that Pembina was unable to take advantage of.
Nipisi & Mitsue Expansion Possible: During the conference call Management commented that the Nipisi &
Mitsue project could be expanded at a cost of approximately $350 million. The expansion would more than
double the project’s capacity and could generate $35 – 45 million of net operating income. For the expansion
to move forward the company would look to have third-party contracts for at least 90% of the expansion’s
volumes.
2010 Capital Expenditures Outlook Increased: Pembina now expects 2010 capital expenditures of $272
million, versus $240 million previously. Management also commented that 2011 capital expenditures would
likely be higher than 2010 expenditures.
Cardium Development a Positive: Pembina intends to spend approximately $40 million on projects to service
the Cardium oil formation over the next 18 months. Management sees long-term opportunities associated with
the Cardium and believes it is an area that Pembina will see increased demand for its services. Given the
company’s existing infrastructure in the region, Management believes it will be able to cost effectively
transport new volumes with only modest investments.
Q4/10 Preview: We are forecasting a Q4/10 AFFO/Shr of $0.39, which is $0.03 higher than Q4/09 AFFO/Shr
of $0.36. The increase is expected to be mainly due to higher Conventional and Gas Services EBITDA
partially offset by continued tight margins negatively affecting the Midstream & Marketing business
Exit, pursued by a bear.
William Shakespeare, Stage direction in "The Winter's Tale"
William Shakespeare, Stage direction in "The Winter's Tale"
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
PPL down quite a bit Thursday down 1.22 . Down about 6% for the week. If you had bought it for the dividend (like me) that represents allmost one years dividends gone.
I sold my shares earlier in the week. Had held 1500 shares since June 2009. Don't know if selling was the right move or not.
The price had gone up so much lately and its payout ratio was very high. I looked at the company reports and news releases but could not get into my head how much their future projects were going to add to their cash flow and earnings. Someone else who is better at analyzing could probably figure it out but I could not.
I sold my shares earlier in the week. Had held 1500 shares since June 2009. Don't know if selling was the right move or not.
The price had gone up so much lately and its payout ratio was very high. I looked at the company reports and news releases but could not get into my head how much their future projects were going to add to their cash flow and earnings. Someone else who is better at analyzing could probably figure it out but I could not.
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
After PPL's 1Q2010 report in March, TDWH had Reduce rating and a target price of $14.50.Nemo2 wrote:TDWH has PPL as 'Reduce' this morning, with a target price of $17.50 and a predicted drop of 13.6% for the forthcoming year
After PPL's 2Q2010 report in August, TDWH had Reduce rating and a target price of $15.50.
After the 3Q2010 report, TDWH had a Reduce rating and a target price of $17.50.
That's why I don't pay much attention to TDWH's or any other broker's target price.
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
The reason for the expected drop is that TDWH (and also CIBC) believe PPL is significantly overvalued when compared to other pipeline companies, based on valuations such as AFFO/unit and EV/EBITDA. Basically you're paying a lot more for a dollar of cash flow with PLL as compared to its peers. If investors decide that PPL should trade at a similar valuation as it's peers, then PPL's price will have to drop. PPL's high dividend is keeping the stock price high, but PPL has a much higher payout ratio than most of it's peers, so there's very little chance to increase dividends, and more risk of a cut if they run into unforeseen problems.GWN789K wrote:Any reasons given for the expected drop?
I decided to sell PPL after holding it for many years. I think there is better value with other pipeline companies. I used the proceeds of the sale to buy AltaGas and Fort Chicago.
Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
Good assessment of Pembina in my opinion. Off topic for this thread, and without looking at the financials of your 2 buys, do you believe the high spreads in the midstream business are sustainable? Perhaps move any discussion of this over to AltaGas et al.Arby wrote:I decided to sell PPL after holding it for many years. I think there is better value with other pipeline companies. I used the proceeds of the sale to buy AltaGas and Fort Chicago.
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- Shakespeare
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Re: Pembina Pipeline Income Fund (Symbol-PIF.UN)
Note to mods - please change the symbol in the thread title.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
- ThinkDividends
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
At $21.50, Pembina currently yields 7.2%. Of the 10 analysts that follow the stock, 50% rate it a hold and 50% rate it a sell (and sell ratings are rare on Bay Street). The median analyst price target is $18.60. The range in price targets is actually quite large ($17.00 on the low end and $20.50 from the most bullish analyst). While the 7.2% yield is enticing, the stock is rich in terms of other valuation metrics.
It is interesting to note that Pembina was trading below the consensus price target in the first half of 2009.
It is interesting to note that Pembina was trading below the consensus price target in the first half of 2009.
Patiently building wealth one dividend increase at a time…
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
Think, interesting post. Does any of this matter if one is holding for income only?
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
PPL has really performed well for the past few years, but it's price chart looks pretty scary - like falling off a cliff ....
Standard & Poor's Ratings Services today said it revised its outlook on Alberta-based Pembina Pipeline Corp. to negative from stable
http://www.xe.com/news/2011/12/20/23599 ... s_RSS_Art2
Standard & Poor's Ratings Services today said it revised its outlook on Alberta-based Pembina Pipeline Corp. to negative from stable
http://www.xe.com/news/2011/12/20/23599 ... s_RSS_Art2
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
I bought this back when it was about $17. Factor in its dividends and I've almost doubled my money. It seems to have totally outperformed TransCanada this year, and is comparable to Enbridge. They stopped their DRIP back in 2010, but according to their website they will be starting it up again in 2012. Not sure what will happen in the future, but I think it is time for me to sell some of my shares and lock in some profit and invest that in something a little more beaten down.
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
An excellent Canadian company. Have owned for a few years and have no intention of selling. Juicy dividend, too. Currently 4% of my portfolio.
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
First bought in, in Dec 2001 @ $10.58......have bought more, and taken profits on some, and now have an ACB of $11.38...which, discounting divs, is now up 167.05%.......ISTM that TDWH has, for quite some time on their 'Action Notes', recommended reducing one's holdings......we continue to keep them however.MALDI_ToF wrote:I bought this back when it was about $17.
Exit, pursued by a bear.
William Shakespeare, Stage direction in "The Winter's Tale"
William Shakespeare, Stage direction in "The Winter's Tale"
- westinvest
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
I have held this for 9-10 years as well, bought most of my shares at $11.23 in 2002. Have held to sell chunks over the years, including this year, to try and keep this below 5% of portfolio. Now that distributions are pure dividends this is a great income investment, hope they don't mess things up!
- ThinkDividends
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
kjmcrae wrote:Pembina to buy Provident for $3.2-billion
The acquisition complements Pembina's gas processing and pipeline network by adding Provident's natural gas liquids (NGL) extraction, fractionation, storage and terminalling assets. In particular, the acquisition accelerates Pembina's strategy of owning fractionation, storage and terminalling assets in the Edmonton/Fort Saskatchewan area.
The deal takes advantage of Pembina's premium multiple... Pembina is paying roughly 12.5x 2012E EBITDA, which is still below Pembina's current multiple of closer to 14x 2012E EBITDA.
Source: RBC
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
Market doesn't like it so far today, down 5%. Thoughts?
- ThinkDividends
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
A big negative is that this deal increases Pembina's frac spread exposure... (Pembina becomes more risky)2yen wrote:Market doesn't like it so far today, down 5%. Thoughts?
- Shakespeare
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
Doesn't it make PPL more like Veresen (former FCE.UN) in giving direct NGL pricing exposure?
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
I see it at 'buying' time. Don't think this company has made many mistakes in the past and I've held 'em since September 2000. "When all the world is selling ...... "
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
Pembina-Provident deal about growth, not costs
“Pembina’s going to have the ability now to compete for projects that are literally world scale,” Doug Haughey, Provident’s chief executive officer, said on a conference call Monday. “I wouldn’t look at this in terms of cost reduction synergies.”
The two companies also have complementary businesses. Mr. Haughey has stated the importance of touching every aspect of the value chain for some time, and on Monday said “that’s more true now than ever.” While Pembina had been doing well on its own because it has more liquids to transport, it was missing the ability to fractionate, something Provident is good at.
Plus, now the two companies benefit from being bulky. The combined firm’s debt to earnings before interest, taxes, depreciation and amortization sits at 2.4 times, which Pembina thinks is quite low. Historically, Provident hasn’t been able to put much leverage on its assets, but Pembina thinks that will change now that they have a broader cash flow base behind them.
"A dividend is a dictate of management. A capital gain is a whim of the market."
- ThinkDividends
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Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
Shakespeare wrote:Doesn't it make PPL more like Veresen (former FCE.UN) in giving direct NGL pricing exposure?
Yes - And Veresen trades at a lower valuation than Pembina and Inter Pipeline for that reason...
Re: Pembina Pipeline Corp (Symbol PPL-T) (formerly PIF.UN)
I've added some at 26.78 for about a 6% yield. Stock has now dropped 14% from it's 31.15 high, the payout ratio is lowered with it's latest acquisition even with the dividend increase. Does anyone have any more info on the credit review set for this July
Re: What did you buy? What might you buy? (2014)
Do you know how much of their 3Q14 midstream revenue is associated with the frac spread of NGLs and of that, how much is hedged and for how long? Almost 40% of their 3Q revenue was from the midstream. [moved from "What did you buy?" thread to put useful information in the right place - Moderator M]Spidey wrote:Added more PPL today at $36.57 for a long-term hold. I figure pipelines will be a solid business for income for years to come.
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