5. Plains All American Pipeline (PAA) is engaged in the transport and marketing of crude oil and petroleum products. It is also develops and operates natural gas storage facilities.
For the third quarter of 2011, PAA reported net income of $281 million, compared to $81 million in the year-ago quarter. EBITDA stood at $421 million, up 205%. The Supply & Logistics division registered 235% increase in profits, year over year. PAA declared quarterly distribution of $0.995 per unit, about 4.7% higher than the year-ago payout and 1.3% from the second quarter.
The company has increased the mid-point of 2011 adjusted EBITDA guidance by 26% to $1.5 billion from the initial guidance of $1.2 billion, an increase of 40% from fiscal year 2010. PAA is increasing its 2012 distribution growth target 8% to 9% over the current annualized distribution of $3.98 per common unit.The company plans to convert an existing Oklahoma liquefied petroleum gas pipeline into a crude oil service, which, in turn, would provide the desired capacity for growing crude oil production in the region. This new service will provide initial crude oil throughput capacity of 12,000 barrels per day by January 2012 and increase to 25,000 barrels per day by Jul. 2012. Earlier this month, PAA announced that Plains Midstream Canada ULC, a wholly owned subsidiary, has entered into a definitive agreement with BP to acquire its Canadian natural gas liquids and liquefied petroleum gas business for $1.67 billion. The company is a rare combination of both value and income. It is trading with a P/E of 13.9, yet has a dividend yielding 6.2%. It is currently trading at $68.24 and has a 52-week high of $68.73. Of the 15 analysts covering the stock, 80% recommend a buy and the rest suggest a hold. Analysts' average 12-month price target for the stock is $72.09, about 5.6% higher than the current price, according to Bloomberg.
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