Pembina Pipeline Corp. Ordinary Shares (Canada) (PBA) Company Bio
Pembina Pipeline Corporation provides transportation and midstream services for the energy industry in North America. It operates through four businesses: Conventional Pipelines, Oil Sands & Heavy Oil, Gas Services, and Midstream. The company was founded in 1997 and is based in Calgary, Canada.
PBA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for PBA, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Pembina Pipeline Corp ranked in the 27th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Pembina Pipeline Corp, consider:
Its compound free cash flow growth rate, as measured over the past 1.02 years, is -0.14% -- higher than just 12.28% of stocks in our DCF forecasting set.
Pembina Pipeline Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 3.39% of tickers in our DCF set.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than just 10.93% of stocks in its sector (Energy).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Energy that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as PBA, try GBR, PARR, EXTN, SM, and AROC.
Given its stable cash flows and healthy liquidity position, Enbridge looks a better buy. The post Enbridge (TSX:ENB) or Pembina Pipeline (TSX:PPL): Which Is a Better Dividend Stock? appeared first on The Motley Fool Canada .
This article was coproduced with Dividend Sensei and edited by Brad Thomas. As I explained in an article a few weeks ago, "whenever I include the word "retire" – or retiree, retirement, or some other derivation – in an article, I'm reminded it must pass my mother's sleep well at...
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