Pembina Pipeline Corp T.PPL

QUESTION ON CURRENT STOCK PRICE

[Ariahp]

So I checked that in January  2020, the SP was $51.68,

Feb , 2020 it was $48,36.

On the start of the Pandemic March 2020 it Dropped to $26.40



ENB has Recovered its price to pre Pandemic State.

What has held back Pembina to get back to  or close to the $50 Range?

PPL got $350m from IPL

yes the CEO resigned 

but that does not Explain a price differential of $10

I am sure there are bright minds on the board who can educate or rather enlighten me.

TIA

GLTA

[bttmfischer]

We may find out on Feb 24, during the conference call, or we may not.

[Albatross]

I'm just throwing darts... Think it has to do with some lost momentum in the company growth. -Polypropylene plant cancellation? -Jordon Cove Cancellation? & reduction in potential for Ruby pipeline? It is unfortunate they didn't get IPL because that would of continued the growth story immensely.  Still bullish on the stock and I enjoy the dividends. With that said I'm

[Cheadle12]

I believe they need to acquire, likely Keyera.. take advantage of the KAPS project cash flow once it's commissioned next year. M&A is the quickest route for new Cash Flow for Pembina.. projects take a long time + lots of CapEx to get there..  ~TGC.

[autofocus111]

Albatross Yup. Two important projects killed in late stage assessment. IPL bid failed. Replaced by a hopes and wishes in the form of Canadian LNG, CO2 capture, and TMX acquisition doesn't come close to offsetting these very real losses in the project pipeline. PPL stock is lagging as a consequence of these failures.  Loss of CEO was just the icing on the cake. With the oil and gas

[bttmfischer]

Question is is there enough cash flow from earnings to justify increasing the dividend? Again, we will have to wait until February to find out.

[autofocus111]

bttm In the recent investor presentation, they stated they intend to direct discretionary cash flow of $200M to share buybacks in H1/22, but indicated a dividend increase was also an option. $1500M is the current allocation to dividend, so $200M if directed at dividends is a ~13% hike. In 2022 the payout ratio is expected to drop to low 70's from 75% of 2021. So yes there absolutely  is

[bttmfischer]

Yes, the are always options, question is which option is going to be exercised. If the interest rates wil be substantially increased in the near future, then the share buyback might make a more economical sense,(Actually it should IMHO.) I also thoght that the hedging by PPL did not work out all that well, hence my question about the dividend increase.

[SargeX]

Totally disagree with doing a divy increase. The yield is already above 6%.  If PPL has extra cash, then it would be way better to do share buybacks. CIao   Sarge

[Albatross]

Yeah my vote would be for a strategic share buyback.. if share prices linger in the low 40's then any shares the company can buy will decrease the payout ratio while potentially boosting valuation.. with a reduced payout ratio and a higher valuation it may well be more fit to potentially opportunistically take-over a struggling mid-stream peer. If PPL shares were at a strong $48 last year and

[autofocus111]

Albatross, They can afford do a bit of both. The proposed buyback for 1% of the float means nothing to me at least. Same for ENB, but at least they are still hiking the divie. PPL (like ENB, TRP, BTI, MO etc) are all first and foremost dividend income stocks in my view. Real rates of return matter. risk-adjusted returns matter too, and with bond yields headed up, there is increasingly less

[autofocus111]

Sarge PPL has a history of raising the dividend every year. Now that inflation is kicking in, it's even more of a reason to increase the dividend to offset that. Otherwise, rising bond rates diminish the benefit of PPL as an alternative from an income perspective. Big Tobacco has high yields (even higher than PPL), and they continue to steadily increase the dividend (and some are doing