Investment Q&A

Q: I have been watching KML. My portfolio is a bit mixed up these days, and could probably use a little more diversification within my dividend plays (weighted heavily in Banks at the moment). At 4.5% yield, this looks like a decent play, and it feels like there is upside potential with the share price, with limited downside (assuming the Pembina deal stays on track, as the company has said). I like the stability of their income, and it looks as though they have "taken their lumps". How do you guys feel about KML these days?

Thank you in advance

Don

Q: Hello 5i Team

The market has announced a takeover of Kinder Morgan Canada by Pembina Pipeline. The deal indicates that holders of KML will receive 0.3068 shares of PPL per 1.0 KML shares.
The Pembina news release indicates the value of the KML shares for the deal is $15.02 and the Kinder Morgan Canada news release indicates the value for the KML shares for the deal is $15.12.
The current price for PPL this morning is approximately $49.00 and the current price for KML is approximately $14.77. Therefore KML is trading slightly below the offer price ($49.00 x 0.3068 = $15.03). The deal is not anticipated to close until 1rst quarter of 2020.
I own both PPL and KML, however in separate accounts.
Based on today's prices, PPL is yielding 4.8 % and KML now yields 4.3 % (down from 5.9 % prior to merger announcement).
The deal does not indicate whether KML will continue to pay dividends in Nov 2019 and Feb 2020. Is this correct?
Should I sell my KML today and reinvest in a completely different security (I do not wish to own PPL in the account I held KML in) or wait until the merger occurs and then sell the PPL shares I receive).
Thanks

Q: Apparently investors were looking for a different outcome for the strategic review. Does the drop in share price make it more attractive, or is it still too growth-constrained to be interesting?

Q: What are your thoughts about KML for the dividend and some growth over the next couple of years? Is the dividend relatively safe?

Q: Kindr Morgan is offering a special dividend of $11.40/Share by December 31.
The Motely Fool is recommending buying this stock for this special dividend. What do you think?

Q: Hello. I just want clarification on what KML announced. So after the 3 for 1 stock reverse on Jan 4th, they will pay a special $11.40/sh dividend? So will the new stock price go from $15/sh to about $40-45, and they will be paying out 28% Dividend? What am I missing here or misunderstanding? Thank you!

Q: Good Afternoon: Another question about preferreds. I notice that kml.pr.a, a Kinder Morgan Canada preferred is now trading more than a dollar below its par value of $25. This is a rate reset with a guaranteed minimum of something above 5% yield. My suspicion is that this has something to do with the current deep malaise of anything connected to the energy sector in Western Canada. However, KML surely has a viable ongoing business as long as there is oil and gas to be transported from source to elsewhere. I could see the negativity if the switch away from fossil fuels to renewables was imminent, but this hardly seems the case. Or am I missing some factor that is peculiar to KML and its operations. I actually thought it came out of the deal involving TransMountain pretty well. Your comments please. Don

Q: What is the latest announcement for KML? Is it good for KML shareholders? What do you recommend to do with KML shares - hold for dividend payment and then sell or sell them right away? Thank you.

Q: Why is KML moving up although it is facing problems?

Q: Hi team.
what is the growth outlook for BCE? is it a buy? Bombardier seems to be going up steadily. Is that justified and sustainable? Is it an opportune time to buy Kinder Morgan, given the Government purchase scenario?
Regards, Norman

Q: Why would KML stock price be down today and why would it not reflect the intrinsic value of the purchase? They have just been offered $4.5 billion for its interest in the controversial pipeline which looks like a great deal for the company considering its market cap is only $1.6 billion (103.7 million shares at a price of $16.30 and no debt).

What am I missing?

Q: Good morning. I own some kinder Morgan preferred shares - kml.pr.a specifically - and would appreciate your assessment of how the takeover of the TMP by the Cdn. government might affect the valuation of those shares. I assume that these shares would still be the responsibility of Kinder Morgan and not the government. Also, do you sense any increased risk related to these shares given this development. Thanks.

Q: I listened to Morneau this morning talking about indemnifying Kinder Morgan for any political risks/delays in KM's pipeline project. The mention of the indemnity applying to any other company who may take on the project means to me that this was a topic of conversation. I am thinking that KM may be trying to position this project as one that they could sell and thereby exit Canada. Their name has been tarnished and I would think that their Board and shareholders would prefer to sell the old and new pipelines, exit Canada and invest elsewhere. So, which pipeline companies are most likely to be interested in buying out KM? My first thought would be Enbridge but with their debt I think they'd pass on this. TRP or is there another one?

Q: If Kinder Morgan Pipeline does not get built and our Canadian Cabinet does not step in to have it built what effect will this have on foreign investment coming to Canada. On BNN today it stated that Canadian Stock Market ranks 77th in the World performance. This is due to lack of interest in our Stock Market. Are we getting to a point where we are Closed for Business and we should be 100 % invested outside of Canada in USA, Europe and Emerging Markets until we regain our senses. RAK

Q: What are your thoughts on purchasing KMI?
Especially if you believe the pipeline will go through.
Any other insight is welcomed.
Thank you
Janice

Q: Other than ENB. what other Canadian stocks could be effected by the MLP ruling and to what degree. also if and when would this come into effect.

Q: Kinder Morgan received a favourable ruling yesterday. Yet KMI.PR.H dropped.
Can you explain?

Q: Hi Team,
Is KML only holds Canadian pipe line assets, and that means only holds Trans Mountain pipe line, if the expansion blocked that would be very bad for KML ?
Your comment is highly appreciated.
Thanks as always,
Tak

Q: Analysts seem united in valuing KML in the mid $20 if pipeline is completed. Using comparable metrics( ENB ?, TRP?, Other? ) what would be value of shares if pipeline did not get built?
Thank you.

Q: Hello: what do you think of Canadian pipelines future with the news of Desjardins most likely not to fund them? I am most interested in Kinder Morgan.

Thank you