RE:RBOB and rack pricesBanks are more focused on EBIDTA and we shareholders pay more attention to DCF as we want dividend growth.
From 2020 Q1 and Q2, we see EBIDTA growth but DCF doesn't follow. There are three items affecting DCF regarding PGR. 1) Interest payment. $250M * 6% = $15M per year. 2) Lease payment. Pembina west pipeline from Taylor to PGR charges $20M, around CDN $5 per barrel. This cost is not factored into EBIDTA. 3) Maintenance Capex. Annual online maintenance cost $1M and debottlenecking maybe another $1-2M. Therefore PGR should have generated around $75M - 15 - 20 - 5 = $35M per year around 10cent DCF.
The virus is exceptional and once in lifetime thing. RBOB from RBC still estimate 20cents DCF in 2020. Price / DCF is around 4 times. REITs are over 10 times and higher risk of collecting rents.I will stay here for at least 2 more quarters for safe dividends.