Thursday, March 5, 2009

Pembina Pipelines

I was asked to take another look at this stock (TSX-PIF.UN). As for Inter Pipeline, the financials for December 2008 has just been published. This is a stock that I own. I bought this stock 2001 and to date I have made a return of 13.7%. This return includes dividends. Today I will review how this stock has done in the past. Tomorrow I will look at it now and for the future.

All my following figures are for the year ending at the last annual statement of December 2008. The revenue growth for the last 5 and 10 years was 23% and 20% per year. The 5 and 10 years growth for Earnings per Share (EPS) was 19% and 14 % per year. The dividend or distribution growth for the last 5 and 10 years was 7% and 5% per year. The closing price growth for the last 5 and 10 years was 12% and 17% per year. This growth in closing price is not bad considering that this stock has gone down about 24% over the last 2 years.

The 5 and 10 years growth for Cash Flow was 12% and 5 % per year. The book value growth for the last 5 and 10 years was 4% and -2% per year. Book Value growth does not tend to be good on Income Trust stocks as they pay out a high percentage of their earnings in distributions. The Return on Equity (ROE) is very good for 2009 at 18% and the 5 year average is not bad either at 13%.

What I do not like is that the Liquidity (Current Asset/Current Liability Ratio) is only .48. This value has been declining over the last 5 years and I would prefer, especially since we are in a bear market, that this ratio be higher. The Asset/Liability is much better at 1.72. This ratio has also fallen a bit as it has a 5 year average of 1.85. The other thing I do not like is that the Accrual Ratio is rather high at 5.7% where any ratio above 5% is high.

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 also updated my index spreadsheet at for the stocks on my web site.

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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