Pat McKeough responds to many personal questions on specific stocks and other investing topics from the members of his Inner Circle. Every week, his comments and recommendations on a selection of the most intriguing questions of the past week go out to all Inner Circle members. And every Friday, we offer you one of the highlights from these Q&A sessions.
This week, one Inner Circle member asked for an update on a pipeline firm that sometimes appears to be overshadowed by the most prominent names in the industry like TransCanada and Enbridge. Here is Pat’s reply.
Q: Hi Pat: Can you give me a report on Inter Pipeline Fund? Thank you for your good advice.
A: Inter Pipeline Fund, (symbol IPL.UN on Toronto; www.interpipelinefund.com), transports, stores, markets and processes oil and natural gas.
The fund has three divisions: pipelines transports 35% of Canadian oil sands production and 15% of western Canadian conventional crude oil; extraction processes 40% of Alberta’s exported natural gas into natural gas liquids; and the storage division, which operates under the Simon Storage and TLG banners.
In the three months ended September 30, 2011, this income stock’s revenue rose 30.4%, to $302.1 million from $231.7 million a year earlier. Cash flow per unit jumped 43.3%, to $0.43 from $0.30. That’s mainly because the company’s pipelines shipped 993,300 barrels a day in the quarter, up 24.6% from 797,300 barrels a year earlier. The increased volumes came mostly from a $1.8-billion expansion of the fund’s Corridor pipeline, which was completed in January 2011.
As a member of my Inner Circle, you will get individual answers to your personal investment questions. And you will see my answers to questions other investors like you are asking. In fact, you will get virtually all the investment advice I have to give. You will have access to all of our advisories – The Successful Investor, Wall Street Stock Forecaster, Stock Pickers Digest and Canadian Wealth Advisor – and full access to the members-only, password-protected Inner Circle section of The Successful Investor Network website.
Although my team carefully researches all the stocks that members ask about, I personally review each and every recommendation. To ensure this close personal attention, only a limited number of members can be admitted to our Inner Circle. Under the pressure of world events, even more investors are asking for my personal investment advice. We are nearing our membership limit already. Click here to secure your membership in the Inner Circle right away.
Income stocks: Inter Pipeline raises its dividend payout
The fund is taking steps to diversify its operations. Earlier this year, it announced that it will buy four petroleum-storage terminals in Denmark from a subsidiary of Dong Energy A/S for $500 million. The purchase will increase Inter Pipeline’s petroleum capacity by 10.7 million barrels, to a total of 19 million barrels.
Inter Pipeline is raising its monthly cash payout by 9.4%, to $0.0875 per unit from $0.08 per unit with the December 2011 payment. That gives the units a 5.6% yield.
In his analysis of this income stock’s prospects in the Inner Circle Q&A, Pat assesses the effect of oil price fluctuations on Inter Pipeline’s revenues and whether or not the company can sustain its high dividend yield. He also looks at the risks of the company’s new overseas venture, as well as the potential rewards. He concludes with his clear buy-hold-sell advice.
Inner Circle members see Pat’s analysis and recommendations on the stocks other members have asked about in each week’s Inner Circle Q&A. You can view it immediately when you become a member of this special investment group. You will get Pat McKeough’s answers to your personal investment questions, full access to our members-only Inner Circle website, and many other membership privileges. Click here to get started right away.
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