Inter Pipeline Fund

I did a spreadsheet on this pipeline stock (TSX-IPL.UN) because I was asked about it, but had no information on it. The Earnings per Share (EPS) have grown strongly on this stock until this year when they had a net income loss. My current spreadsheet covers this stock until the last annual statement, which was December 2007.

First, I will talk about the good things about this stock. For the 5 and 10 years to December 2007, the revenues increased 30% and 46% per year respectively. For the last 5 and 10 years, the Dividend was increased 4.3% and 11.6% per year respectively. For any unit trust, a good increase is a rate above background inflation, which runs about 3 %. The closing price for the last 5 and 10 years has increased by 19.4% and 6.8% per year respectively. The cash flow for the last 5 and 10 years has increased by 8% and 28% per year respectively. These are all respectable figures.

Now for the negatives things I find on this stock. Last year they had income loss. However, everyone expects this company will earn money in 2009. The book value of this stock has negative growth of -6.14% and -6.44% for the last 5 and 10 years respectively. Being a unit trust, which payouts most of the money they earn, you do not expect much book value growth, but you expect some. The Accrual Ratio, without the Financial Cash Flow is high at 9.5%, but it is a negative 2.2%, when you include in the Financial Cash Flow. Also, the Return on Equity (ROE) has never been good, except for 2006, when it was 10.9%. Otherwise, it has been very low.

I will look at what stock analysts are saying about this stock tomorrow.

This fund has four lines of business: conventional oil pipelines, oil sands transportation, NGL extraction and bulk liquid storage. Inter Pipelines have four petroleum pipeline systems in Alberta and Saskatchewan, transporting approximately 20% of western Canada’s conventional oil production. They have Canada’s largest oil sands gathering business. They are Canada’s largest ethane production business, processing over 40% of all natural gas exported from the province of Alberta. They do bulk liquid storage of petroleum and petrochemical in Europe and they are the largest independent storage provider in the United Kingdom. Its web site is www.interpipelinefund.com. See my spreadsheet at www.spbrunner.com/stocks/ipl.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.