Pembina Pipeline (TSX: PPL)(NYSE: PBA) is engaged in the transportation of oil and gas through its pipeline networks. The company has a market cap of $22.568 billion with a current dividend yield of 5.03% and is a constituent of the S&P/TSX Canadian Dividend Aristocrats index. To qualify for inclusion in the Aristocrat index, a company must have raised their dividend payout every year for the past five years. Historically, Aristocrats have fared better in market downturns and recovered quicker.
Adding to its luster, the company was recently added to the prestigious list of “Canada’s Top 100 Employers” for 2019. That kind of thing may not be easy to spot on the balance sheet, but it does bode well for the future. It’s nice to know you are dealing with an ethical company that cares about its people and the community!
Pembina’s stock price has moved up off its October low and is currently posting a 5% gain for November. The stretch from July through November has not been kind to Pembina’s stock price in recent years. Prior to 2018, the stock price posted losses for July in each of the last five years, and four of the last five years for November. With three mediocre months sandwiched in between, Pembina’s performance over that period has been sluggish, but with the recent strong push upward, it looks like Pembina’s slow period may be ending early this year.
Historically, December has been a strong month for Pembina. The stock price has risen in four of the last five years, with the only blemish coming in 2015 when it lost 1.8%. Overall, the stock has gained an average of 5.7% in December since 2013. December also holds the record for Pembina’s highest single monthly gain of 13.4% back in 2014. March had the second-largest monthly gain of 11.1% in 2013 followed by 10.9%, again in December of 2013.
December has traditionally been the best month of the year for the TSX index. In the 10 years from 2003 to 2013, the TSX fell in December only one time, back in 2011. Even in 2008, one of the worst years in financial history, the TSX still managed to post a small gain in December. Finding winners in December used to be easy!
But times have changed. In the last five years the TSX has performed anemically at best in December. The title of “Best Month” now belongs to July, up five of the last six years and posting an average 1.8% gain. When I’d started researching this story, I’d expected to find dozens of candidates with equal or better performances than Pembina to choose from. I did find a few that could match Pembina’s performance, but none that could equal its dividend yield.
One last point of interest to mention: Pembina has outperformed the market in December every year for the last five years. This means that even in the year it lost money, it still fared better than most of the TSX. Pembina Pipeline is simply the best choice you can make right now!
