Oil and gas stocks are starting to heat up. The price for oil hasn't been this high in years and that can make now an opportune time to load up on related stocks in the sector, especially ones that also pay a dividend. Pembina Pipeline (TSX:PPL)(NYSE:PBA) currently yields more than 6% and could be an ideal option for income investors. Its yield is high even though Pembina's shares have risen by more than 36% thus far in 2021.
Over the trailing 12 months, the company has generated an operating profit of more than 23%. And in four of the past five quarters, it has reported a positive net income number as well. Now, with the demand for oil looking strong, the transportation and midstream services companies is in great shape and could deliver even better quarters ahead.
In an update from Aug. 5, the company raised the low end of its adjusted EBITDA guidance while also noting that volume across its pipelines was increasing. Through the first six months of 2021, the company's revenue of $4 billion was 36% higher than it was a year ago.
Although shares of Pembina are trading near their 52-week highs, the stock is still nowhere near the more than $50 per share it traded at in early 2020, before the pandemic began. As vaccination rates rise and things return to normal, demand for oil could continue to remain high for the foreseeable future. That means that not only do investors who buy Pembina get a great dividend, there's potential here to also net a solid return.
