The pipeline/energy infrastructure sector is one of my favorite places to look for income opportunities. As a conservative long-term investor, these companies provide the appropriate risk-reward relationship that fits my personal investing mandate. They also provide a high level of dividend income, making these companies great picks for retirement portfolios, in my view.
One of my top picks in this space for dividend income specifically has to be Pembina Pipeline (TSX:PPL). Pembina is one of the best-run pipeline operators in North America, and in Canada, is one of the best value picks at this point in time, in my view.
The company's largely blue-chip, large-cap customer base provides lower levels of counterparty risk than other smaller pipelines. The company's high level of cashflow stability provides security with respect to the company's dividend distribution.
Pembina currently pays a dividend yield in the 7.5% range, which is among the juiciest in the sector. The company’s dividend is substantially higher than other large cap Canadian companies with relatively safe dividends such as the big six banks.
Pipelines should be full for a long time, as Canada's oil patch generally has had issues getting its oil and gas to tidewater. This makes companies with extensive existing pipeline capacity such as Pembina even more attractive today.
Invest wisely, my friends.
