On Aug 13, Zacks Investment Research upgraded
Pembina Pipeline Corp.
) to a Zacks Rank #1 (Strong Buy).
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Why the Upgrade?
This company provides transportation and midstream services to
oil and natural gas operators in North America. The company
delivered positive earnings surprises in two out of the last
three quarters with an average beat of 21.8%.
Pembina Pipeline's earnings per share in the second quarter were
29 cents, 20.1% higher than the Zacks Consensus Estimate and
ahead of the year-ago figure by a penny.
The company continues to make consistent investment to improve
its operations and existing infrastructure. The capital
expenditure of Pembina Pipeline in the first half of 2013 was
$359.8 million, 93.1% higher than the prior-year period. The
expenditure was primarily directed towards its Conventional
Pipelines, Gas Services and Midstream businesses.
Pembina Pipeline recently invested $110 million in a shallow cut
gas plant, Musreau II, near its existing Musreau facility in
central Alberta. Musreau II is expected to be in service in the
first quarter of 2015 and take Pembina Pipeline's daily
processing capacity to approximately 1.2 billion cubic feet.
During the first six months of 2013, Pembina has secured $1.5
billion in capital projects, which will help provide long-term
and sustainable returns to its investors. Pembina Pipeline raised
its current monthly dividend rate to 14 cents, reflecting a 3.7%
sequential increase from 13.5 cents distributed in the previous
The Zacks Consensus Estimate for 2013 is pegged at $1.13 per
share, reflecting year-over-year growth of 5.61%. For 2014, the
Zacks Consensus Estimate of $1.27 per share projects
year-over-year growth of 12.39%.
Besides Pembina Pipeline Corporation, other operators in the
sector having a favorable Zacks Rank are
Magellan Midstream Partners L.P.
Cabot Oil & Gas Corp.
Range Resources Corp.
). All of them presently carry a Zacks Rank #1 (Strong Buy).