Inter Pipeline Ltd. (TSX:IPL), one of largest providers of petroleum transportation, bulk liquid storage, and natural gas liquids extraction services in western Canada and northern Europe, announced record second-quarter earnings results on August 6, and its stock responded by rising over 1% in the day’s trading session. The company’s stock still sits about 30% below its 52-week high of $38.95 reached in September 2014, so let’s take a closer look at the results to determine if this could be the start of a sustained rally higher.

The record-setting results that sent its shares higher

Here’s a summary of Inter Pipeline’s second-quarter earnings results compared with its results in the same period a year ago.

Metric Q2 2015 Q2 2014
Earnings Per Share $0.19 $0.25
Total Revenue $390.6 million $375.9 million

Source: Inter Pipeline Ltd.

Inter Pipeline’s earnings per share decreased 24% and its revenue increased 3.9% compared with the second quarter of fiscal 2014. The company’s double-digit percentage decline in earnings per share can be attributed to its net income attributable to shareholders decreasing 20% to $65.3 million, which was primarily due the corporate tax rate in Alberta being increased from 10% to 12%, as well as higher depreciation and amortization expenses.

Its slight increase in revenue can be attributed to its revenues increasing 77.6% to $182.7 million in its oil sands transportation segment, primarily due to increased fee revenue as a result of its Cold Lake mainline expansion, which entered into commercial service in January.

Here’s a quick breakdown of 10 other notable statistics from the report compared with the year-ago period:

  1. Total pipeline throughput volumes increased 0.3% to 1,062,400 barrels per day
  2. Total extraction production decreased 6.6% to 90,400 barrels per day
  3. Revenue decreased 22.2% to $74.7 million in its conventional oil pipelines segment
  4. Revenue decreased 35.2% to $88.8 million in its NGL extraction segment
  5. Revenue increased 11% to $44.4 million in its bulk liquid storage segment
  6. Funds from operations increased 37.5% to a record $181 million
  7. Declared record cash dividends of $123 million, or $0.3675 per share, compared with dividends totaling $103.9 million, or $0.3225 per share, in the year-ago period
  8. Cash provided by operating activities increased 10.9% to $163.3 million
  9. Total capital expenditures decreased 69.4% to $77.8 million
  10. Ended the quarter with $73.08 million in cash and cash equivalents, an increase of 16.1% from the beginning of the quarter

Could Inter Pipeline’s stock head higher from here?

Inter Pipeline posted a very strong performance in the second quarter, so I think its stock responded correctly by rising. I also think the stock could head much higher from here because it trades at inexpensive forward valuations and because it has a dividend yield over 5%, which will continue to attract income investors.

First, Inter Pipeline’s stock trades at just 19.7 times fiscal 2015’s estimated earnings per share of $1.38 and only 18.4 times fiscal 2016’s estimated earnings per share of $1.48, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 19.9 and very inexpensive compared with its long-term growth potential.

Second, Inter Pipeline pays a monthly dividend of $0.1225 per share, or $1.47 per share annually, which gives its stock a 5.4% yield at today’s levels. The company has also increased its annual dividend payment for six consecutive years, and its 14% increase in November 2014 puts it on pace for 2015 to mark the seventh consecutive year with an increase, and its increased amount of funds from operations could allow this streak to continue for another seven years.

With all of the information provided above in mind, I think Inter Pipeline represents one of the best value and dividend plays in the energy sector. All Foolish investors should take a closer look and strongly consider establishing long-term positions today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.