Want To Invest In Pembina Pipeline Corporation (TSE:PPL)? Here's How It Performed Lately

After reading Pembina Pipeline Corporation's (TSX:PPL) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Pembina Pipeline's performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for Pembina Pipeline

Were PPL's earnings stronger than its past performances and the industry?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend enables me to examine many different companies on a more comparable basis, using the most relevant data points. For Pembina Pipeline, its latest trailing-twelve-month earnings is CA$891.00M, which, in comparison to the previous year's figure, has risen by more than double. Given that these figures are relatively myopic, I’ve created an annualized five-year figure for Pembina Pipeline's net income, which stands at CA$334.59M This means that, generally, Pembina Pipeline has been able to consistently improve its bottom line over the last few years as well.

What's the driver of this growth? Let's see if it is merely owing to an industry uplift, or if Pembina Pipeline has experienced some company-specific growth. Over the past couple of years, Pembina Pipeline expanded its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Viewing growth from a sector-level, the Canadian oil and gas industry has been growing its average earnings by double-digit 12.20% in the past year, and a flatter -0.67% over the previous five years. This means that, in the recent industry expansion, Pembina Pipeline is capable of amplifying this to its advantage.

What does this mean?

Pembina Pipeline's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Pembina Pipeline to get a more holistic view of the stock by looking at the areas below. Just a heads up - to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.

• 1. Future Outlook: What are well-informed industry analysts predicting for PPL’s future growth? Take a look at this free research report of analyst consensus for PPL’s outlook.
• 2. Financial Health: Is PPL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
• 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.