PBA

We rate PEMBINA PIPELINE CORP (PBA) as a Hold with a composite score of 56.9/100 at a current price of $44.27. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (98th percentile) and value (64th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (34th percentile) and investment (36th percentile) tempers our overall conviction. We assign a No Moat rating (31/100), Low uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

PEMBINA PIPELINE CORP holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 56.9/100 places it at rank #1041 in our full 7,333-stock universe. With a $20.3B market capitalization, PEMBINA PIPELINE CORP operates at meaningful scale within the Mining sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 7%, though momentum at the 34th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 45% (+1.7pp vs sector) narrow to operating margins of 35% (+22.6pp vs sector) and net margins of 25.4%, yielding a gross-to-net conversion rate of 57%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $44.27, PEMBINA PIPELINE CORP is trading near fair value based on current fundamentals. Our value factor score of 64/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at EV/EBITDA of 4.3x (near the sector median), P/S of 1.2x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Low uncertainty rating to PEMBINA PIPELINE CORP. The company exhibits strong financial stability with a beta of 0.33, and a stability factor in the 98th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.33 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 98th percentile and quality factor at the 63th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 45% provide a buffer against cost pressures; above-average stability (98th percentile) suggests predictable business dynamics; a 5.85% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate PEMBINA PIPELINE CORP's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 10.4%, and the balance sheet is managed within acceptable parameters (D/E: N/A). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; PEMBINA PIPELINE CORP falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 5.85% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, PEMBINA PIPELINE CORP receives a Hold rating with a composite score of 56.9/100 (rank #1041 of 7,333). Our quantitative framework assigns a No Moat (31/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 59/100.

Our analysis supports a neutral stance on PEMBINA PIPELINE CORP. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.