Sound bite for Twitter is: Dividend Growth Utility. Results of stock price testing is that the stock price is showing this stock as relatively expensive. Debt Ratios are fine, but it would be nice to have a better Liquidity Ratio. The Dividend Payout Ratios (DPR) are fine based on AFFO and CFPS. The current dividend yield is moderate with dividend growth low. See my spreadsheet on Pembina Pipelines Corp.
Is it a good company at a reasonable price? I still like this stock and I plan to continue to hold the shares that I have. I know analysts are giving it a strong buy but I wonder about that as they do not expect it to go much higher over the next year. If you buy stocks, you should always buy them over time (over a few years) and in different months. The TSX chart shows that this stock is at an all-time peak. My testing is suggesting that the stock price is relatively expensive.
I own this stock of Pembina Pipelines Corp (TSX-PPL, NYSE-PBA). In December 2001 I thought it would be a good time to purchase this stock as the market was relatively low. Pipeline stocks are conservative and the return on this one was good at 9.7%. When I purchased this stock, it was an Income Trust company.
When I was updating my spreadsheet, I noticed I have had this stock for 24 years and I have made purchases over the years of 2004 to 2020 and I have a total return of 15.88% with 7.87% from capital gains and 8.01% from dividends. Not much happen in 2025, but so far this year the stock is up 21%. I noticed that all the officers I am following bought shares over the past year. None of the directors I am following bought any.
The company did not have a particularly good year. Revenue was up 5%, but EPS was down 11%, AEPS down 11%, AFFO down 14%, FFO down 1%, but Cash Flow up 3%. Next year expectations are Revenue was up 2%, with EPS was up 8%, AEPS up 3%, AFFO up 0.4%, but FFO down 8%, and Cash Flow down 7%.
If you had invested in this company in December 2015, for $1,0025.10 you would have bought 34 shares at $30.15 per share. In December 2025, after 10 years you would have received $825.61 in dividends. The stock would be worth $1,1777.86. Your total return would have been $2,603.47. This would be a total return of 11.95% per year with 5.66% from capital gain and 6.29% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $30.15 | $1,025.10 | 34 | 10 | $825.61 | $1,777.86 | $2,603.47 |
The current dividend yield is moderate with dividend growth low. The current dividend yield is moderate (2% to 4% ranges) at 4.50%. The 5, 10 and historical median dividend yields are good (5% to 6%) at 5.57%, 5.33%, and 6.86%. The dividend growth is low (below 8% per year) at 2.4% per year. The last dividend increase was in 2025 and it was for 2.9%.
The Dividend Payout Ratios (DPR) are fine based on AFFO and CFPS. The DPR for 2025 for Earnings per Share (EPS) is too high at 106% with 5 year coverage at 84%. Analysts expect the DPR to be 99% in 2026 and fall to 85% in 2027. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is too high at 96% with 5 year coverage at 98%. Analysts expect the DPR to be 94% in 2026 and fall to 90% in 2027. The DPR for 2025 for Adjusted Funds from Operations (AFFO) is fine at 57% with 5 year coverage at 53%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 41% with 5 year coverage at 39%. The DPR for 2025 for Free Cash Flow (FCF) is too high at 71% with 5 year coverage at 68%. FCF varies from $2,300M to $2,517M and I am using $2,300M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 106.02% | 84.28% |
| AEPS | 96.89% | 97.91% |
| AFFO | 57.43% | 53.05% |
| CFPS | 40.63% | 39.72% |
| FCF | 71.22% | 68.38% |
Debt Ratios are fine, but it would be nice to have a better Liquidity Ratio. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.40 and currently at 0.34. The Liquidity Ratio for 2025 is far too low at 0.61 and 0.61 currently. If you added in Cash Flow after dividends, the ratios are still low at 1.41 and currently at 1.29. I prefer this ratio to be at 1.50 or higher. The Debt Ratio for 2025 is good at 1.89 and 1.89 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.12 and 1.12 and currently at 2.12 and 1.12.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.40 | 0.34 |
| Intang/GW | 0.21 | 0.17 |
| Liquidity | 0.61 | 0.61 |
| Liq. + CF | 1.41 | 1.29 |
| Debt Ratio | 1.89 | 1.89 |
| Leverage | 2.12 | 2.12 |
| D/E Ratio | 1.12 | 1.12 |
The Total Return per year is shown below for years of 5 to 28 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 2.36% | 18.87% | 11.68% | 7.19% |
| 2015 | 10 | 4.64% | 11.95% | 5.66% | 6.29% |
| 2010 | 15 | 3.89% | 12.71% | 6.07% | 6.64% |
| 2005 | 20 | 5.00% | 13.25% | 6.12% | 7.13% |
| 2000 | 25 | 4.40% | 16.95% | 7.49% | 9.46% |
| 1997 | 28 | 5.94% | 19.97% | 8.07% | 11.90% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 15.01, 17.56 and 20.10. The corresponding 10 year ratios are 15.32, 18.01 and 20.47. The corresponding historical ratios are 18.38, 20.36 and 23.05. The current ratio is 22.08 based on a stock price of $63.16 and EPS estimate for 2026 of $2.86. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) Data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 15.36, 18.45, 20.19. The corresponding 10 year ratios are 16.08, 18.48 and 20.52. The corresponding historical ratios are 16.80, 18.50 and 20.84. The current ratio is 21.05 based on a stock price of $63.16 and AEPS estimate for 2026 of $3.00. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Funds from Operations (AFFO) Data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 7.99, 9.24 and 10.58. The corresponding 10 year ratios are 9.51, 9.79 and 11.35. The corresponding historical ratios are 7.99, 924 and 10.58. The current ratio is 12.81 based on a stock price of $63.16 and AFFO estimate for 2026 of $4.93. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Funds from Operations (AFFO) Data. The 5-year low, median, and high median Price/Funds from Operations Ratios are 8.03, 9.17 and 10.14. The corresponding 10 year ratios are 8.20, 9.30 and 10.49. The corresponding historical ratios are 9.20, 10.84 and 12.99. The current ratio is 12.15 based on a stock price of $63.16 and FFO estimate for 2026 of $5.20. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $41.80. The 10-year low, median, and high median Price/Graham Price Ratios are 1.07, 1.22 and 1.41. The current ratio is 1.51 based on a stock price of $63.16. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.68. The current ratio is 2.44 based on a stock price of $63.16, Book Value of $15,042M, and Book Value per share of $25.89. The current ratio is 45% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share Ratio for 2026 of $25.75. This analyst calculates the Book Value differently than I do and, in this case, the 10 year P/B Ratio is 1.54. The ratio for a Book Value per Share of $25.75 is 2.45 with a stock price of $63.16 and Book Value of $14,961M. This ratio is 59% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 9.49. The current P/CF Ratio is 12.01 based on Cash Flow per Share estimate for 2026 of $5.26, Cash Flow of $3,056M and a stock price of $63.16. The current ratio is 27% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 6.86%. The current ratio is 4.50% based on a stock price of $63.16 and dividends of $2.84. The current dividend is 34% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. However, this stock used to be an income trust with a high dividend yield because income trust can pay higher dividends than corporations.
I get a 10 year median dividend yield of 5.33%. The current ratio is 4.50% based on a stock price of $63.16 and dividends of $2.84. The current dividend is 16% below the 10 yar median dividend yield. This stock price testing suggests that the stock price is relatively expensive. This stock became a corporation in 2009, more than 10 years ago.
The 10-year median Price/Sales (Revenue) Ratio is 3.17. The current ratio is 4.61 based on Revenue estimate for 2026 of $7,967M, Revenue per Share of $13.71 and a stock price of $63.16. The current P/S Ratio is 45% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is showing this stock as relatively expensive. The 10 year dividend yield testing is saying that the stock price is relatively expensive. The P/S Ratio test confirms this. All the rest of my testing is saying the same thing.
When I look at analysts’ recommendations, I find Strong Buy (5), Buy (6), Hold (6) and Sell (1). The consensus is a Strong Buy. The 12 months stock price consensus is $62.94 with a high of $69.00 and low of $52.00. The 12 month stock price consensus of $62.94 implies a total return of 4.15% with a 0.35% capital loss and 4.15% from dividends based on a current stock price of $63.16. A strong buy does not really go with a lower stock price in 12 months’ time.
The are two Buys, a Top Pick and Partial Buy on Stock chase for 2026. The analysts like this stock and one calls it a pure-play pipeline infrastructure stock. Jitendra Parashar on Motley Fool says this stock has a strong dividend and solid fundamentals. Robin Brown on Motley Fool says to buy this stock because of Canada’s infrastructure spending boom.. The company put out an Press Release about their fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and thinks it is undervalued. Simply Wall Street has two warnings of Has a high level of debt; and dividend of 4.6% is not well covered by earnings.
Pembina Pipeline is a midstream company serving the Canadian and North American (primarily Bakken) markets with an integrated product portfolio. Its operations include transmission pipelines, oil and gas gathering, fractionation, storage, and natural gas liquid exports. It also has a joint venture through the Cedar LNG export terminal. Its web site is here Pembina Pipelines Corp.
The last stock I wrote about was about was Barrick Mining Corp (TSX-ABX, NYSE-B) ... learn more. The next stock I will write about will be South Bow Corp (TSX-SOBO, NYSE-SOBO) ... learn more on Monday, May 4, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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