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Discussion Starter · #1 ·
Hello all, im new to the forum, have recently looked at a lot of past threads and have found it to be very informative. There is alot of great feedback on here as well as some entertaining comments and posts I am enjoying it!

Anyways, Im wondering what your individual thoughts and opinions are on Pempina Pipeline. I love the fact that it has a consistent and generous dividend and a prudent management team. PPL just laid out there 2012 capital spending plan and things in the future look promising. They are also bringing back their DRIP in the new year.

The only concern I have is their dividend payout ratio (over 100%) is this something that you turn a blind eye to in a company that has such a strong history of paying dividends and also growing their stock?

Looking forward to your feedback.
 

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Anyways, Im wondering what your individual thoughts and opinions are on Pempina Pipeline. I love the fact that it has a consistent and generous dividend and a prudent management team. PPL just laid out there 2012 capital spending plan and things in the future look promising. They are also bringing back their DRIP in the new year.

The only concern I have is their dividend payout ratio (over 100%) is this something that you turn a blind eye to in a company that has such a strong history of paying dividends and also growing their stock?

Looking forward to your feedback.
The stock has performed great but I personally pay a huge attention to payout ratio, share dilution and some basic valuations, for me payout of over 100%, p/e of 28 and annual share dilution of about 10% (look at the increased number of shares between 2008 and 2010) are enough to take a pass, with that said I realize that there is more to it and like CPG other measures should be applied, however I have done well for myself sticking to my rules therefore at this point of time I wouldn't be interested.
 

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Discussion Starter · #3 ·
thx HomerHomer, Im intrigued by the energy transportation sector and how stable it seems to be in terms of growth and dividends and Im looking at buying stocks like Pembina, Inter Pipeline, etc as I find them very attractive.

The title of my post should read PPL not PLL sorry guys!
 

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I personally think all the pipelines are overvalued right now. I would love to add ppl to my stable but as many are seeking "safe" yield the prices for these and similar stocks are too high. As a result I have been forced to seek bargains with smaller or mid cap stocks VNR, VSN and AQN are on my watchlist currently. I do have a small position in AQN at the moment. I also hold IPL. I wish I had purchased more IPL so I could take some profits and buy back in when valuations revert back to a normal range.

I also pay attention to payout ratio, EPS, forward p/e (compared to ave p/e) and share dilution. Share dilution can be tricky for me to monitor, but it is important as it is a way for a company to create capital without some investors being aware that their slice of the pie is shrinking. This is one reason why companies love DRIPs. More importantly the reason for dilution can be a factor in my decision. If it is for executive/employee compensation or for raising capital to pay down debt are two entirely different motives for dilution.

Cheers!
 

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Piplelines being overvalued is an understatement. It seems not everyone was happy with their 2012 capital spending budget. The other day S&P revised Pembina Pipeline's outlook to negative from stable ..... I would wait until these pipelines go on sale later in the year maybe
 

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Discussion Starter · #6 ·
I agree with you guys that the pipelines seem overvalued, everytime I look the stocks seem to be going up, Pembina went from $20 to almost $30 in no time...
 

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Discussion Starter · #7 ·
I find it very interesting that many of you find these pipelines to be overvalued. I too hope that with perhaps their prices will retreat but I just don't see it happening, I hope I am wrong!
What do you guys think will cause these stocks to pullback? Higher interest rates, etc, ??
 

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Higher interest rates or an expanding economy would torpedo them. However, a long term investor will be fine. Dividends will keep coming.
 

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A press release today saying they're holding dividends at current levels and they're down 5.9% so far today.

wtf
 

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I guess we now know the reasons for last week slide, funny enough I just put provident on my watch list to analyze, guess don't have to do it anymore ;-)
 

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I have a question regarding Pembina buying out PVE. I wonder if I should start my own topic but I'll ask anyways.

Can someone clarify what exactly will take place to the existing PVE shares I own right now?

I understand there will be some sort of share exchange:

"Pembina will exchange 0.425 of its own stock for each Provident share, a premium of 24.7 per cent over Friday’s closing price of $9.51." (CBC)
 

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"Pembina will exchange 0.425 of its own stock for each Provident share, a premium of 24.7 per cent over Friday’s closing price of $9.51." (CBC)
Your shares will turn into Pembina shares.

If you have 100 shares of Provident, you now have 42.5 shares of Pembina.

You may in fact only receive 42 Pembina shares, plus Cash for the 0.5 share.
 

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Shucks. PVE was on my watch/buy list for this year, as it was likely they would be increasing earnings and dividends over the next few years. Will keep watching Pembina, this may boost their earnings 2-3 years down the road once the dust settles and efficiencies get realized.
 

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hmmm- I think pipeline is worthy- I bought Atlas at $10 and it's still rising after 1.5 years; 370% gain in less than 2 years
 

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I sold TRP in Nov before the KXL decision & having been waiting to buy ENB - or any other pipeline co - to diversify my holdings - But...ENB remains very expensive. I'd consider starting a position at a 10-15 % reduction right now. Most people are buying them for yield, and as long as growth stays neglible & rates low, pipelines will stay expensive.
 
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