Q: Pembina is lagging other pipeline companies this year yet some analysts continue to recommend it. What do you think of the company and do you see any catalysts that could help its profitability in 2026? Would you buy it at this level?
5i Research Answer:
We would be comfortable buying. It has been 'quiet' but we do not see anything wrong here. It has not raised its dividend since February, but we would expect a hike perhaps early in 2026. It did narrow its EBITDA guidance with its Q3 report, and this took some of the glow off of the stock. But at 19X earnings with a secure 5.36% yield, it would remain one of our preferred income names within the sector. We do not see any major short term catalysts, but lower rates should help, and small deals are always a possibility.