Plains All-American Pipeline LP (PAA & PAGP) Update - Mar 28

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Plains All-American Pipeline LP (PAA & PAGP) Update - Mar 28

Post by dan_s »

I just finished my review of our updated profile on PAA/PAGP. It will be posted to the EPG website this afternoon and sent to all members via email tomorrow morning.

PAA is an MLP and PAGP is a C-Corp, in our High Yield Income Portfolio. They pay identical quarterly dividends which were recently increased to $0.2675/quarter for annualized yield of ~8.5%.

PAA has publicly stated that they will be increasing dividends after 2023 until they reach 160% Distributable Cash Flow (DCF) coverage.
DCF
> 2021 Actual = $2.06 per unit of PAA
> 2022 Actual = $2.26 per unit
> 2023 Forecast = $2.50 per unit
> 2024 Forecast = $3.00 per unit

Conclusion: Based on my forecast model (which is very close to the consensus forecast on TipRanks) there is a lot of upside for PAA and PAGP dividends. My current valuation of PAGP is $18.00/share. It is trading today at $12.85 and TipRanks price target is $17.00.

You pay Big Bucks for your EPG membership, so I can find opportunities like this.
Dan Steffens
Energy Prospectus Group
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