Pembina Pipeline Corp (NYSE: PBA)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001546066
Market Cap 21.47 Bn
P/B 1.74
P/E 18.18
P/S 3.70
ROIC (Qtr) 9.62
Div Yield % 4.58
Rev 1y % (Qtr) -4.28
Total Debt (Qtr) 9.63 Bn
Debt/Equity (Qtr) 0.78

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 2.42B provides exceptional 87.95x coverage of minority interest expenses 27.54M, showing strong core operations.
  • Tangible assets of 21.05B provide exceptional 152.06x coverage of deferred revenue 138.41M, showing strong service capability backing.
  • Robust free cash flow of 1.85B exceeds capital expenditure of 573.19M by 3.23x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 2.42B provides 7.25x coverage of SG&A expenses 334.06M, showing efficient operational cost management.
  • Operating cash flow of 2.42B provides strong 17.50x coverage of deferred revenue 138.41M, indicating service delivery capability.

Bear case

  • Operating cash flow of 2.42B barely covers its investment activities of (811.59M), with a coverage ratio of -2.98, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.42B provides thin coverage of dividend payments of (1.18B) with a -2.05 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • The company's operating cash flow of 2.42B shows concerning coverage of stock compensation expenses of (16.67M), with a -145.30 ratio indicating potential earnings quality issues.
  • High receivables of 803.62M relative to inventory of 220.29M (3.65 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 1.85B represents just -12.75x of debt issuance (144.93M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments [axis] Breakdown of Revenue (2024)

Segments [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 100.05 Bn 24.60 2.15 75.15 Bn
2 WMB Williams Companies, Inc. 73.60 Bn 31.09 6.40 27.99 Bn
3 EPD Enterprise Products Partners L.P. 69.94 Bn 12.09 1.32 33.58 Bn
4 KMI Kinder Morgan, Inc. 60.62 Bn 22.23 3.69 32.58 Bn
5 ET Energy Transfer LP 58.05 Bn 13.46 0.73 63.97 Bn
6 TRP Tc Energy Corp 55.97 Bn 22.78 5.27 44.47 Bn
7 MPLX Mplx Lp 54.03 Bn 11.23 4.22 25.92 Bn
8 OKE Oneok Inc /New/ 44.55 Bn 13.34 1.41 33.73 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.86 3.39
EV to Cash from Ops. EV/CFO 9.07 7.77
EV to Debt EV to Debt 2.28 -68.56
EV to EBIT EV/EBIT 10.48 12.77
EV to EBITDA EV/EBITDA 7.73 7.47
EV to Free Cash Flow [EV/FCF] EV/FCF 11.88 13.20
EV to Market Cap EV to Market Cap 1.02 2.49
EV to Revenue EV/Rev 3.78 4.48
Price to Book Value [P/B] P/B 1.74 94.01
Price to Earnings [P/E] P/E 18.18 12.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.68 -3.60
Dividend Payout Ratio % Div Payout % (Qtr) 83.40 72.05
Dividend per Basic Share Div per Share (Qtr) 1.69 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 38.56 32.66
Interest Coverage Int. cover (Qtr) 4.69 5.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 12.41 -17.97
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 41.19 16,113.89
Dividend Growth (1y) % Div 1y % (Qtr) -33.32 -1.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -13.95 -5.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 25.18 -4.54
EBIT Growth (1y) % EBIT 1y % (Qtr) 26.10 -11.94
EBT Growth (1y) % EBT 1y % (Qtr) 28.39 -230.00
EPS Growth (1y) % EPS 1y % (Qtr) -16.38 -44.55
FCF Growth (1y) % FCF 1y % (Qtr) 9.21 -0.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.33 -1.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.16 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.40 0.21
Cash Ratio Cash Ratio (Qtr) 0.06 0.81
Current Ratio Curr Ratio (Qtr) 0.54 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 0.78 1.11
Interest Cover Ratio Int Coverage (Qtr) 4.69 5.11
Times Interest Earned Times Interest Earned (Qtr) 4.69 5.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 48.20 35.86
EBIT Margin % EBIT Margin % (Qtr) 49.84 27.76
EBT Margin % EBT Margin % (Qtr) 28.41 17.28
Gross Margin % Gross Margin % (Qtr) 42.30 48.56
Net Profit Margin % Net Margin % (Qtr) 20.30 15.36