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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hi Peter and Team. Great site. BTW I just renewed my subscription and gave a gift subscription to my Father for Christmas. My question is which out of the following energy infrastructure companies do you think is the best value and would recommend buying/adding to at this point in time. IPL, KEY, ALA, PPL or VSN. Also are there any things that make you concerned about any of these companies. Thanks Scott
Read Answer Asked by Scott on March 17, 2014
Q: Good day! I have owned PPL (Pembina Pipeline) for a few years, having bought in when he dividend rate was much higher. As a dividend investor (usually targeting a minimum of 5% or more dividend returns) I subscribe to the theory that capital appreciation runs hand-in-hand with “somewhat” higher dividends – and yes I am aware of a whole mess of caveats with that statement, which hopefully I take fully into consideration. I do consider beta, historical performance of dividends in a “crash” (i.e 2008), and also look for the “moat” or recession proof aspect – amongst other things such as ROE, payout ratios, cash balances, and such. I do look at growth, but a sustainable dividend stream is the primary focus.
That being said as a background, I can see PPL has grown, and projects on the go indicate future increased cash flow, and then assumedly higher dividends. My question pertains to how long I should wait for the dividend rate to go back to the 5 or 6 percent payout. I am unable to get a clear picture from their documentation as to the timeframe of the increased cash flow. Are you able to discern when we should expect the increased cash flow - and matching dividend adjustments - and can you suggest at what point I might consider moving my cash elsewhere (i.e another payer in the 6% - 7% range - i.e such as RSI, STB, MRG.UN, HLP.UN - just for some examples)?
Thanks!
Read Answer Asked by Paul on February 05, 2014
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