Plains All American
Units up 40% LTM
November 14, 2012
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Williams
Guiding Higher
September 5, 2012
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TransCanada
North American focus
November 14, 2012
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Enbridge
Price Signals
October 3, 2012
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Plains All American Pipeline LP has a proven business model and a track record of 43 consecutive quarters of meeting or exceeding guidance. It is the 4th largest energy MLP by market cap, behind EPD, KMP and WPZ. Impressively, capital appreciation of its units alone has soared over 40% in the last year! The future remains bright as PAA's assets are well positioned to benefit from increasing oil production (seen in slide above) in virtually all its service areas. PAA currently has a $5 billion plus capital project portfolio through 2015 targeting unlevered returns in the mid-teens. PAA also has significant liquidity and is actively pursuing acquisitions, having closed $3 billion since 2011.
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Williams cites great long-term fundamentals of a low natural gas-to-crude price ratio driving an infrastructure supercycle where it is also well-positioned. In one of its opening slides, Williams states: "Marcellus: Don't worry about rig count, worry about infrastructure." In the Marcellus, fee-based volume growth is significant but production still awaits more infrastructure. WMB is now on track to deliver up to $12.2 billion of new projects by 2014 - almost all fee-based. This portfolio drives strong and clear dividend growth guidance from $1.20 per share in 2012 to $1.75 in 2014. Furthermore, the dividend coverage ratio grows from 1.24X in 2012 to 1.48X in 2014 as cash flow surges.
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TransCanada recently held its Investor Day and disclosed its vision to be the leading North American energy infrastructure company. Key messages include a 12-year track record of a 12.9% annual return, visible growth to $19 billion of secured projects, a current 3.9% yield and a strong financial position to increase dividends. TransCanada has another $7.5 billion remaining on a $13 capital program of projects due online by by 2015. The largest piece is $3.8 billion for the Keystone Marketlink portion. The full Keystone system, when completed, will cost $14 billion, transport 33% of Canadian oil exports to the U.S., and generate annual EBITDA for $1.7 billion.
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Enbridge operates the longest crude oil and liquids transportation system in Canada and the U.S (15,372 miles), moving more than 2.2 MMbpd responsible for 65% of western Canada oil exports and 15% of U.S. imports. ENB stock has performed well, having soared 40% in the last two years on the heels of 15% dividend increase annually in 2010, 2011 and 2012. ENB has $35 billion of visible growth projects through 2016 ($18 billion of which is commercially secured already). The slide above, presented during Investor Day, shows market price signals for midstream development. ENB's Northern Gateway Pipeline project is world class, critically important and scheduled for service in 2018.
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