Q: Hi Peter and team,
Can you please compare Pembina to TC Energy? Pembina seems to have been more conservative in terms of leverage and have a similar yield and a pretty range bound stock versus TRP which just keeps sliding.
Pembina seems to have some good strategic growth ahead of it here and TRP makes me wonder if they are chasing shiny things instead of what works and I wonder if they have the money to fund these projects.
Thoughts?
Can you please compare Pembina to TC Energy? Pembina seems to have been more conservative in terms of leverage and have a similar yield and a pretty range bound stock versus TRP which just keeps sliding.
Pembina seems to have some good strategic growth ahead of it here and TRP makes me wonder if they are chasing shiny things instead of what works and I wonder if they have the money to fund these projects.
Thoughts?
5i Research Answer:
MH Revenue 5-year growth: PPL: 13% vs TRP: 3%
Valuation: PPL: 14.5x Forward P/E vs TRP: 12.5x Forward P/E
Leverage: PPL’s Net debt/EBITDA at 4.1x vs TRP’s Net debt/EBITDA at 6.4x
TRP is heavily reinvesting back into the business to pursue growth while leveraging up the balance sheet and issuing shares (dilution risks) to pay increasing dividends.
On the other hand, PPL’s growth is more solid, and the company also consistently raises dividends which is supported by growing cash flows.
We like PPL better at this point.