Wednesday, October 8, 2008

Pembina Pipelines 2

As I said yesterday, I first brought this stock (TSX-PIF.UN) in December 2001 and I have made an annual rate of return of 15% on this stock. Even though this stock has fallen a lot with the current bear market, any analyst I can find has a hold rating on this stock. I think that is because people see a big risk in the construction of the proposed Nipisi and Mitsue Pipelines. And, also Pembina ships oil from the Canadian Oil Sands. Lets face it, a big chuck of the TSX is resource stocks. Canada is heavy in resources. I invest in such thinks pipelines as a way of investing in our oil, without buying taking on a big risk. This stock is considered a low risk stock compared to oil stocks, which are considered high risk stocks.

Generally, this stock does better than the TSX Utility Index and worse than the TSX index. However, do not forget that the charts only track stock prices. The TSX index does not include dividends. For this stock, for the 5 years ending December 2007, the stock price return was 10%, but the stock price plus dividend return was 18.5%.

Not much has changed since I wrote about this stock yesterday. I have updated my spreadsheet re the 2nd quarterly report of June 2008. The positive things are that the stock price of $12.86 is now below the Graham Price of $13.67, Pembina just upped their dividend payout by 8.3% and there is insider buying.

This is the biggest Pipeline Income Fund in Canada. It is a utility. It is engaged in the transportation of light conventional and synthetic crude oil, condensate and natural gas liquids in Western Canada. Its web site is See my spreadsheet on this company at I have reloaded my spreadsheet with the second quarter report of June 2008.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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