Pembina Pipelines

I first brought this stock (TSX-PIF.UN) in December 2001. I have made an annual rate of return of 15% on this stock. The yield is usually around 7% on this stock. I looked at it today and it is 10.6%. Of course, the market is way down on everything. If I look at my year to day earnings on this stock, I have lost 3%. This loss is because of the price of the stock. It is still producing strong dividends. In fact, for the September distribution they have increased their dividend.

The dividends (or distributions) for this stock has been increased by almost 14% this year. This is a type of stock where the dividends are good, but the dividend increases are sporadic. However, the dividend increases tend to be greater than inflation.

The best place I know to get good information on Income Trust stocks to buy is the Money Reporter produced by MPL Communications. They have a site called http://www.adviceforinvestors.com/ and if you click on the “About and Contact” button (top right of web page), you will be offered this newsletter for an introductory price of $38 for the first year. I do not tend to get such publications regularly, but every once in a while I sign up again for 6 months or a year to find new stocks to invest in.

For the 5 years ending at December 2007, this stock’s revenue has gone up 17.6% per year, Earnings per Share (EPS) has gone up 14% per year, dividends have gone up 5.5%, closing price has gone up 10% per year, with the price plus dividend giving a total return of 18.5% per year. During this period the Operational Cash Flow has only gone up 6.3% per year.

The negatives are that the Graham Price is only $12.79 at the December 2007 year end against the Closing Price of $17.54. The Accrual Ratio is very high at 12%.

The Current Asset /Current Liability ratio is low at .89, but the Asset/Liability Ratio is much better at 1.86. The Return on Equity (ROE) has been improving and this is good. The Book Value per share is not improving; however, this is to be expected because of high payouts under this income trust.

This has been a good stock for me, as it has delivered good dividends and some growth.

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 www.pembina.com. See my spreadsheet on this company at www.spbrunner.com/stocks/pif.htm.

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 www./spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on my web site.