Canadians are thinking more carefully about their money these days. With uncertainty, it’s not surprising that long-term investors are looking for stable dividend payers that can weather economic ups and downs. Pembina Pipeline (TSX:PPL) is one of those steady performers that many turn to for dependable income and modest growth. But where could it be three years from now?
Recent performance
Pembina Pipeline is a major energy infrastructure company with assets across Western Canada. It transports natural gas, natural gas liquids, and oil. It also has processing and storage facilities. What makes Pembina stock different is that it earns most of its revenue through long-term, fee-based contracts. So while commodity prices rise and fall, its cash flow tends to stay stable.
In its first quarter of 2025, Pembina reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.17 billion, up from $1.06 billion in the same quarter last year. Net income hit $502 million, or $0.80 per share. Cash from operating activities reached $840 million. That strong performance allowed the company to increase its dividend by 3%, bringing the annual total to $2.84 per share. At current prices, that gives it a dividend yield around 5.5%, which is well above the TSX average.
The company is also in a strong financial position. Its Common Equity Tier 1 (CET1) ratio sits at comfortable levels, and it reaffirmed full-year earnings before interest, taxes, depreciation and amortization (EBITDA) guidance between $4.2 and $4.5 billion. That shows Pembina stock expects to keep cash flows strong despite broader economic worries.
Future focus
Looking ahead, Pembina has some promising growth plans. It recently acquired full ownership of the Alliance Pipeline and the Aux Sable processing business for $3.1 billion. These assets are expected to generate stable, fee-based earnings over the long term. Pembina also signed a deal with ARC Resources to supply natural gas to the proposed Cedar LNG project, with deliveries starting in 2028. If the project moves forward, it could add $200 to $260 million in annual EBITDA.
Most analysts expect Pembina to grow earnings by around 6% per year over the next few years. Revenue growth will likely remain modest, but with stable pricing, strong demand, and rising volumes, it’s well-positioned to deliver consistent results. Analysts currently have one-year price targets around $59 to $60 per share, which suggests 15% to 18% upside over the short term. Looking out to 2028, assuming earnings grow and valuations stay steady, the stock could rise to the mid-$60s or even $70 range.
Risks still exist. Higher interest rates could increase financing costs for new projects, and regulatory hurdles are always a concern in the pipeline industry. There’s also the broader risk that energy demand slows or shifts faster than expected toward renewables. However, Pembina stock’s balanced business model and high-quality asset base help reduce these risks.
Bottom line
It’s not a stock that will double in a year. But Pembina offers something more valuable in today’s market: consistency. With strong cash flow, reliable dividends, and modest growth, it’s the kind of investment many Canadians want right now. And with rising inflation and economic concerns weighing on households, that steady income stream can make a real difference. In fact, right now a $10,000 investment could bring in $545 in annual passive income!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTED |
|---|---|---|---|---|---|---|
| PPL | $52.05 | 192 | $2.84 | $545.28 | Quarterly | $9,989.60 |
In three years, Pembina is unlikely to surprise investors, but that’s a good thing. If it continues raising dividends, keeps building cash flow, and slowly grows through smart acquisitions, it could quietly deliver total returns in the range of 40% to 50%. That includes dividend income and share price appreciation, all while helping Canadians feel a little more confident about their financial future. In this climate, that’s a win.
