Definitive Analysis
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Definitive Analysis

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Pembina Pipeline Corporation (PBA)

Company Dividend Discount ModelIndustry: Oil & Gas MidstreamSector: Energy

Valuation Snapshot

Stable Growth$41.68 - $74.04$55.34
Multi-Stage$60.97 - $66.72$63.80
Blended Fair Value$59.57
Current Price$56.32
Upside5.77%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.47%19.29%2.702.512.622.382.372.272.141.340.600.51
YoY Growth--7.54%-4.33%10.03%0.43%4.31%6.09%59.67%122.51%19.39%9.29%
Dividend Yield--4.68%5.23%5.98%5.07%6.54%8.60%4.31%3.33%1.43%1.44%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,777.00
(-) Cash Dividends Paid (M)1,536.63
(=) Cash Retained (M)240.37
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)355.40222.13133.28
Cash Retained (M)240.37240.37240.37
(-) Cash Required (M)-355.40-222.13-133.28
(=) Excess Retained (M)-115.0318.24107.09
(/) Shares Outstanding (M)582.00582.00582.00
(=) Excess Retained per Share-0.200.030.18
LTM Dividend per Share2.642.642.64
(+) Excess Retained per Share-0.200.030.18
(=) Adjusted Dividend2.442.672.82
WACC / Discount Rate7.42%7.42%7.42%
Growth Rate1.47%2.47%3.47%
Fair Value$41.68$55.34$74.04
Upside / Downside-26.00%-1.74%31.47%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,777.001,820.881,865.851,911.931,959.152,007.532,067.76
Payout Ratio86.47%87.18%87.88%88.59%89.29%90.00%92.50%
Projected Dividends (M)1,536.631,587.421,639.791,693.771,749.411,806.781,912.67

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate7.42%7.42%7.42%
Growth Rate1.47%2.47%3.47%
Year 1 PV (M)1,463.401,477.821,492.25
Year 2 PV (M)1,393.571,421.171,449.05
Year 3 PV (M)1,326.991,366.611,407.01
Year 4 PV (M)1,263.501,314.051,366.10
Year 5 PV (M)1,202.981,263.441,326.30
PV of Terminal Value (M)28,836.5630,285.7931,792.71
Equity Value (M)35,487.0037,128.8838,833.42
Shares Outstanding (M)582.00582.00582.00
Fair Value$60.97$63.80$66.72
Upside / Downside8.26%13.27%18.47%

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