Inter Pipeline (IPL.TO) Buy, Sell or Hold

Inter Pipeline (IPL.TO)

19.12

+0.28 (1.49%)

as of Nov 1, 2021, 8:00:00 pm Market Open.

777 watching

BUY

Like the dividend, which is safe. IPL is going ahead with a major chemical processing plant that will process Alberta oil and gas that that government loves. IPL should do well. As long as they pay a dividend, he'll hold this. Good cash flow.

COMMENT

He has a big position in pipelines. When the globe goes into recession, oil prices will fall. He prefers ZWU-T in the meantime.

WATCH

It has not yet participated in the recovery this year. Backed up volumes in Canada may be hurting their operations. The first polypropylene venture is a little risky. He thinks the yield is well covered. He is watching it, but does not own it yet. Yield 8.1% (Analysts’ price target is $25.00)

PAST TOP PICK

(A Top Pick Feb 22/18, Up 1%) He just sold it last week. All of his returns came from the dividend. They're building a giant petrochemical plant in Alberta, which is a big capital expenditure. To pay for this in part, IPL is deferring dividend payments. Also, a new competitor in Alberta and Saskatchewan is taking on their oil pipeline business, which triggered his sell. Also, their storage business in Europe is struggling with storage capacity. The dividend is safe, but he doesn't see growth in the business.

WATCH

Pays a safe 8% yield. He's taking a hard look at this. They're impacted by oil production and Alberta's isn't growing as expected. IPL is building a large propane facility for $3.5 billion that'll come onstream at end-2021. IPL will come down to project execution.

PARTIAL BUY

Pays an fairly safe 8% yield, though the stock hasn't done much recently. It will do okay in a dividend portfolio.

HOLD

They just missed on their earnings from their conventional pipelines. Trades at a premium. Their payout ratio is going higher even as still safe-ish. You can have it for a yield proxy.

HOLD

She thinks the yield is safe. She holds two other pipelines instead. Yield 8.1%.

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WEAK BUY

It is yielding 8.2%. What bothers him is that the $1.71 dividend is well above earnings of $1.54 currently. Why are they paying more than the earnings? This creates negative compounding returns. He sees 35% upside on the stock and would consider a buy at $18. There are a lot of warts that gives him some pause.

SELL

It is a bit of a poor cousin to ENB-T. Despite the fact that defensives sectors did well through the fall, it is still at a 52 week low relative to the market so its been signifncantly under performing. He would stay in ENB-T, but look even more for dividend growth. He suggests looking more to dividend growth like financials vs the big pipes.

BUY

IPL vs. Pembina IPL is sitting in a great area with support around $19, since 2012. Definitely a buy. Pembina is a lot more toppy, way past its support level and trying to break through upper resistance. He'd sell Pembina.

BUY

Pipeline assets and they are building a PDH plant in Alberta. It is a big capital project. He would buy it here. They may do a preferred or equity issue later in the year. The yield is a reflection of what happened in December. There is not a lot of international investors buying energy names. He thinks they will continue to pay the dividend.

HOLD

An $8.5 billion company that ranks well for the dividend. He expects negative earnings growth in 2019 so he is not a buyer today. They will be spending a ton of money on expansion. He prefers other in the space currently.

BUY

Has a $28 target. Likes it. Guidance was higher than expected. A steady pipeline. Good cash flow and worth holding onto. Not worried about the dividend.

HOLD

IPL vs. ALA? Had an unfairly rough 2018. Dividend increased. (ALA is a utility now whereas IPL is a midstream/pipeline.) They're building a big petrochem plant in Edmonton--a big unknown they're developing themselves. Good managers, but there's execution risk with that plant. He's resisted buying this, holding onto Enbridge instead. That said, you can hold IPL and that's fine. But keep it small in your portfolio.

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