TSX:PPL

Stock Analysis Report

Pembina Pipeline

Executive Summary

Pembina Pipeline Corporation provides transportation and midstream services for the energy industry in North America.

Rewards

Trading at 69.2% below its fair value

Earnings are forecast to grow 5.09% per year

Earnings grew by 18% over the past year

Pays a high and reliable dividend of 10.24%

Risk Analysis

Has a high level of debt

Dividend of 10.24% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Pembina Pipeline's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PPL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.0%

PPL

12.8%

CA Oil and Gas

3.0%

CA Market


1 Year Return

-51.0%

PPL

-41.0%

CA Oil and Gas

-24.5%

CA Market

Return vs Industry: PPL underperformed the Canadian Oil and Gas industry which returned -41% over the past year.

Return vs Market: PPL underperformed the Canadian Market which returned -24.5% over the past year.


Shareholder returns

PPLIndustryMarket
7 Day2.0%12.8%3.0%
30 Day-48.5%-32.6%-21.2%
90 Day-48.1%-40.1%-24.4%
1 Year-48.2%-51.0%-37.9%-41.0%-22.0%-24.5%
3 Year-34.2%-43.6%-42.1%-48.8%-13.9%-21.9%
5 Year-22.4%-39.9%-44.1%-53.6%-2.0%-16.6%

Price Volatility Vs. Market

How volatile is Pembina Pipeline's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Pembina Pipeline undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PPL (CA$24.62) is trading below our estimate of fair value (CA$80)

Significantly Below Fair Value: PPL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PPL is poor value based on its PE Ratio (9.3x) compared to the Oil and Gas industry average (6.3x).

PE vs Market: PPL is good value based on its PE Ratio (9.3x) compared to the Canadian market (10.6x).


Price to Earnings Growth Ratio

PEG Ratio: PPL is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: PPL is overvalued based on its PB Ratio (1x) compared to the CA Oil and Gas industry average (0.4x).


Next Steps

Future Growth

How is Pembina Pipeline forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

5.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PPL's forecast earnings growth (5.1% per year) is above the savings rate (1.4%).

Earnings vs Market: PPL's earnings (5.1% per year) are forecast to grow slower than the Canadian market (5.1% per year).

High Growth Earnings: PPL's earnings are forecast to grow, but not significantly.

Revenue vs Market: PPL's revenue (4.2% per year) is forecast to grow faster than the Canadian market (3.4% per year).

High Growth Revenue: PPL's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PPL's Return on Equity is forecast to be low in 3 years time (9.9%).


Next Steps

Past Performance

How has Pembina Pipeline performed over the past 5 years?

36.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PPL has high quality earnings.

Growing Profit Margin: PPL's current net profit margins (18.8%) are higher than last year (15.7%).


Past Earnings Growth Analysis

Earnings Trend: PPL's earnings have grown significantly by 36.6% per year over the past 5 years.

Accelerating Growth: PPL's earnings growth over the past year (18%) is below its 5-year average (36.6% per year).

Earnings vs Industry: PPL earnings growth over the past year (18%) exceeded the Oil and Gas industry -2.5%.


Return on Equity

High ROE: PPL's Return on Equity (8.9%) is considered low.


Next Steps

Financial Health

How is Pembina Pipeline's financial position?


Financial Position Analysis

Short Term Liabilities: PPL's short term assets (CA$987.0M) do not cover its short term liabilities (CA$1.5B).

Long Term Liabilities: PPL's short term assets (CA$987.0M) do not cover its long term liabilities (CA$14.9B).


Debt to Equity History and Analysis

Debt Level: PPL's debt to equity ratio (60.5%) is considered high.

Reducing Debt: PPL's debt to equity ratio has increased from 45.3% to 60.5% over the past 5 years.

Debt Coverage: PPL's debt is well covered by operating cash flow (24.9%).

Interest Coverage: PPL's interest payments on its debt are well covered by EBIT (5.7x coverage).


Balance Sheet

Inventory Level: PPL has a high level of physical assets or inventory.

Debt Coverage by Assets: PPL's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

What is Pembina Pipeline's current dividend yield, its reliability and sustainability?

10.24%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PPL's dividend (10.24%) is higher than the bottom 25% of dividend payers in the Canadian market (2.69%).

High Dividend: PPL's dividend (10.24%) is in the top 25% of dividend payers in the Canadian market (8.7%)


Stability and Growth of Payments

Stable Dividend: PPL's dividends per share have been stable in the past 10 years.

Growing Dividend: PPL's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (88.8%), PPL's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PPL's dividends in 3 years are not forecast to be well covered by earnings (101.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure


CEO

Mick Dilger (56yo)

6.25s

Tenure

CA$7,131,203

Compensation

Mr. Michael H. Dilger, also known as Mick, has been the Chief Executive Officer and President of Pembina NGL Corporation since January 2014 and serves as its President since February 15, 2012. Mr. Dilger h ...


CEO Compensation Analysis

Compensation vs Market: Mick's total compensation ($USD5.05M) is above average for companies of similar size in the Canadian market ($USD3.30M).

Compensation vs Earnings: Mick's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Dilger
President6.25yrsCA$7.13m0.036% CA$4.9m
J. Burrows
Senior VP & CFO5.25yrsCA$2.32m0.0022% CA$303.2k
Harold Andersen
Senior VP of External Affairs & Chief Legal Officer7yrsCA$1.65m0.0017% CA$230.1k
Stuart Taylor
Senior VP of Marketing & New Ventures and Corporate Development Officer2.25yrsCA$2.39m0.0040% CA$546.8k
Paul Murphy
Senior VP & Corporate Services Officer6.58yrsCA$2.27m0.0035% CA$477.8k
Allan Charlesworth
Vice President of Technical Servicesno datano data0.0014% CA$186.8k
Ian McAvity
Investor Relations Analystno datano datano data
Claudia D'Orazio
Vice President of Human Resourcesno datano data0.0013% CA$173.3k
Jason Wiun
Senior VP & COO of Pipelines2.25yrsno data0.0027% CA$372.2k
Jaret Sprott
Senior VP & COO of Facilities2.25yrsno data0.0017% CA$224.7k

5.3yrs

Average Tenure

Experienced Management: PPL's management team is seasoned and experienced (5.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Dilger
President6.25yrsCA$7.13m0.036% CA$4.9m
Leslie O'Donoghue
Independent Director11.33yrsCA$215.01k0.0055% CA$747.1k
Randall Findlay
Independent Chairman of the Board6yrsCA$372.51k0.026% CA$3.5m
Gordon Kerr
Independent Director5.25yrsCA$230.99k0.0019% CA$255.8k
Jeffrey Smith
Independent Director8yrsCA$220.00k0.0026% CA$345.1k
David Malcolm LeGresley
Independent Director9.67yrsCA$227.49k0.011% CA$1.5m
Robert Michaleski
Independent Director20.25yrsCA$211.27k0.081% CA$11.0m
Bruce Rubin
Independent Director2.92yrsCA$284.76k0.0036% CA$492.7k
Maureen Howe
Independent Director2.5yrsCA$207.50k0.0023% CA$310.0k
Anne-Marie Ainsworth
Independent Director5.5yrsCA$291.71k0.0036% CA$488.6k

6.1yrs

Average Tenure

62.5yo

Average Age

Experienced Board: PPL's board of directors are considered experienced (6.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PPL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Pembina Pipeline Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Pembina Pipeline Corporation
  • Ticker: PPL
  • Exchange: TSX
  • Founded: 1997
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: CA$13.535b
  • Shares outstanding: 549.77m
  • Website: https://www.pembina.com

Number of Employees


Location

  • Pembina Pipeline Corporation
  • 585 - 8th Avenue South West
  • Suite 4000
  • Calgary
  • Alberta
  • T2P 1G1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PPLTSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 1998
P5PDB (Deutsche Boerse AG)YesCommon SharesDEEUROct 1998
PBANYSE (New York Stock Exchange)YesCommon SharesUSUSDOct 1998
PPL.PRATSX (The Toronto Stock Exchange)PFD 5 YR CL A 1CACADJul 2013
PBNA.FOTCPK (Pink Sheets LLC)PFD 5 YR CL A 1USUSDJul 2013
PPL.PRCTSX (The Toronto Stock Exchange)PFD CL A SER 3CACADOct 2013
PPL.PRETSX (The Toronto Stock Exchange)CUM RE CL A PFD5CACADJan 2014
PPL.PRGTSX (The Toronto Stock Exchange)PFD CL A SER 7CACADSep 2014
PPL.PRITSX (The Toronto Stock Exchange)PFD CL A SER 9CACADApr 2015
PPL.PRKTSX (The Toronto Stock Exchange)PFD CL A SER 11CACADJan 2016
PPL.PRMTSX (The Toronto Stock Exchange)CUM REDM PFD ACACADApr 2016
PPL.PROTSX (The Toronto Stock Exchange)PFD CL A SER 15CACADOct 2017
PPL.PRSTSX (The Toronto Stock Exchange)PFD CL A SER 19CACADOct 2017
PPL.PRQTSX (The Toronto Stock Exchange)PFD CL A SER 17CACADOct 2017
PPL.PF.ETSX (The Toronto Stock Exchange)PFD CL A SER 25CACADDec 2019
PPL.PF.CTSX (The Toronto Stock Exchange)PFD CL A SER 23CACADDec 2019

Biography

Pembina Pipeline Corporation provides transportation and midstream services for the energy industry in North America. It operates through three segments: Pipelines, Facilities, and Marketing & New Ventures. The Pipelines segment operates conventional, transmission, and oil sands and heavy oil pipeline assets with a transportation capacity of 3.1 million barrels of oil, ground storage of 11 millions of barrels, and rail terminalling capacity of approximately 145 thousands of barrels of oil equivalent serving markets and basins across North America. The Facilities segment offers processing and fraction facilities, and other infrastructure related services to provide customers with natural gas and natural gas liquid services, as well as 326 thousands of barrels per day of natural gas liquids fractionation, 21 millions of barrels of cavern storage, and associated pipeline and rail terminalling facilities. The Marketing & New Ventures segment buys and sells hydrocarbon liquids and natural gas originating in the Western Canadian sedimentary basin and other basins. Pembina Pipeline Corporation was founded in 1997 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 05:38
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.