Enbridge (TSX:ENB), Pembina (TSX:PPL) & Keyera: 3 Dividend Stocks from Energy Sector

Summary

  • Income-loving investors have shown interest in dividend-paying TSX stocks such as Enbridge Inc, Pembina Pipeline and Keyera Corp.
  • All the three stocks are from energy sector and have attractive dividend yields.
  • Although the Canadian energy industry has taken quite a beating amid the COVID-19 pandemic, some energy stocks recovered well since the March lows.

In times of coronavirus-inflicted economic morass, investors often look for dividend-paying stocks that come with a high dividend yield. The Toronto Stock Exchange (TSX) has listed three Canadian energy companies – Enbridge Inc (TSX: ENB), Pembina Pipeline Corporation (TSX: PPL) and Keyera Corp (TSX: KEY) – in its ‘Top Dividend’ chart, which ranks stocks and ETFs with high dividend yields.

Although the oil and gas industry has been in a state of flux amid the COVID-19 pandemic due to fluctuating prices and low demand, some energy stocks registered a notable growth since the March lows. At the same time, investors have also turned to dividend-paying energy stocks of Enbridge Inc, Pembina Pipeline and Keyera Corp as they are now available at a discounted price. Here’s a closer look at the three stocks.

Enbridge Inc (TSX: ENB)
Current Stock Price: C$ 38.8
Quarterly Dividend: C$ 0.81

Enbridge Inc operates the largest energy pipeline system across North America, catering to millions of residential, business and industrial customers. The Canadian energy distributor supplies a quarter of the crude oil used in North America and about one-fifth of the natural gas in the US.

Most of the energy industry suffered massively during the pandemic due to price fluctuation and operational disruptions. Enbridge, however, saw a steady flow of cash from its ongoing operations of energy distribution. The company even expanded its pipeline network during the pandemic.

Enbridge reported that it has cash, cash equivalents and restricted cash of about C$ 497 million as of June 2020.

The Calgary-based company posted a noticeable year-over-year drop in its operating revenue of C$ 7.9 billion in the second quarter ending 30 June 2020. Its earnings were down to C$ 1.7 billion in Q2 2020 from Q2 2019’s C$ 1.8 billion, and its EBITDA in the latest quarter stood at C$ 2.3 billion.

But despite its quarterly earnings, Enbridge Inc continues to pay a quarterly dividend of C$ 0.81. With a current dividend yield of 8.35 per cent (as per the TSX data), Enbridge Inc ranks high among trending TSX stocks with high dividend yield.

Enbridge shares are also among the most active stocks on the TSX. Though far from their pre-pandemic levels, its scrips made a slow recovery since their March lows of C$ 34.09 (March 19) and gained nearly 14 per cent in seven months’ time.

Pembina Pipeline Corporation (TSX: PPL)
Current Stock Price: C$ 28.36
Monthly Dividend: C$ 0.21

Shares of Pembina Pipeline Corporation record a 41 per cent year-to-date (YTD) decline, but remain quite popular among investors. In the last 10 days, it has accumulated an average trading volume of 1.8 million. But Pembina stocks aren’t only trending on the TSX due to their heavy trading volume actives. It is also ranked high among stocks with high dividend yield.

The Calgary-based company churns out a monthly dividend of C$ 0.21 and currently yields 8.88 per cent, as per the TSX data.

Pembina Pipeline Corporation is a midstream energy storage and transportation company operating primarily in western Canada. Its business took a major hit amid the COVID-19 outbreak, which reflected in its performance in the second quarter of 2020.

Pembina’s revenue stood at C$ 1.2 billion in its Q2 ending 30 June 2020, down from C$ 1.8 billion in Q2 2019. Its earnings saw a 62 per cent YoY decrease, amounting to C$ 253 million in Q2 2020. Its EBITDA of C$ 789 million, however, was up three per cent YoY. As of June 2020, Pembina has a cash and borrowing capacity of C$ 2.8 billion.

The company is expected to release its third quarter results of 2020 on November 6.

Pembina’s stock price tumbled to a record low of C$ 16.56 during the March market crash, its lowest level in a decade. Since then, however, it has rebounded by about 71 per cent in seven months’ time.

Keyera Corp (TSX: KEY)
Current Stock Price: C$ 20.85
Monthly Dividend: C$ 0.16

Shares of Keyera Corp, which has a history of distributing dividends for 10 years, have been quite popular among investors amid the pandemic. In September, it announced a cash dividend C$ 0.16, which will be payable on October 15, 2020. Its current dividend yield is 9.02 per cent, informs TSX data.

Keyera Corp operates an integrated energy infrastructure business in western Canada, primarily focusing on gathering, processing and fractionation of natural gas. It stores and transports crude oil and natural gas byproducts, and markets natural gas liquids. Keyera Corp has a wide pipeline network of over 5,000 kilometers and 15 natural gas processing plants. One of Canada’s largest midstream energy operators, it was formerly known as Keyera Facilities Income Fund.

The Calgary-based company recorded lowered net earnings of C$ 17.7 million in its second quarter ending 30 June 2020, down from C$ 224.5 million in Q2 2019. Its net earnings in the latest quarter includes unrealized non-cash losses related to risk management contracts, severance costs and low-income tax recovery.

Keyera Corps’s adjusted EBITDA stood at C$ 182 million in Q2 2020, down from C$ 249 million Q2 2019. Its distributable cash flow, however, saw a YoY increase C$ 158 million in the latest quarter, up from C$ 144 million in Q2 2019.

The company is set to release its third quarter results of 2020 on November 3, 2020.

Keyera stocks nose-dived by nearly 71 per cent in a month’s time when the markets tanked amid the coronavirus pandemic back in March. Its scrips have made a steady rebound since, gaining nearly 41 per cent in the last six months.

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