Written by SmallCapPower.com

Inter Pipeline Ltd. (TSX:IPL) (IPPLF), based in Calgary, Alberta, is a leading oil sands pipeline operator with combined ultimate capacity of 4.6 million b/d, 3,300 km of pipeline and 3.8 million barrels of storage. With the acquisition of Williams Canada in late 2016, Inter Pipeline has also achieved significant presence in NGL extraction and storage. The Company’s low-risk business model of building infrastructure assets and selling their use to creditworthy customers under long-term contracts ensures stable and consistent revenue and cash-flow generation, which in turn has allowed Inter Pipeline to declare consistent dividend payouts. At the current price, Inter Pipeline stock offers an attractive dividend yield of 6.5%, making it a compelling pick for dividend investors.

Investment thesis

  • Energy infrastructure assets across oil sands, NGL, and conventional
  • Low-risk business model
  • Consistent dividend payout and high dividend yield

    • Diverse and global-scale energy infrastructure assets

    Inter Pipeline operates one of the largest petroleum transportation and bulk liquid storage businesses with assets spread across Western Canada and Europe. The Company boasts of large and continued increase in capacity in each of its four business segments:

  • Oil Sands Transportation, the largest segment, owns three major oil sands pipeline systems (Corridor, Cold Lake, Polaris) with combined ultimate capacity of 4.6 million b/d, 3,300 km of pipeline and 3.8 million barrels of storage.
  • NGL Processing: In the NGL space, Inter Pipeline has large scale infrastructure comprising three straddle plants strategically located on the TransCanada Alberta System, two off-gas plants that have dedicated supply agreements, and Boreal pipeline with low cost expansion up to 125,000 b/d.
  • The Conventional Oil Pipelines segment with 3,900 km of oil pipelines serves over 100 producers on a 100% fee-based model.
  • and the Bulk Liquid Storage segment comprises 16 petroleum and petrochemical storage terminals with ~ 27 million barrels of storage capacity.
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