If ET and PAA are so close, why not split the baby and own both? I did this with CVE and CNQ and haven’t felt remorse yet. The effort required to squeeze the last bit of performance just wasn’t worth the time, when the final result could be determined by an unknown unknown..
Great article as always. I was looking forward to that one. Unfortunately your conclusion was the same as the one I already had, that PAA was rather comparable to ET. Was hoping you would convince me otherwise and one or the other was superior value! 😅 Sticking with my EPD, MPLX, WES and ET for now, but it is worthwhile to monitor the ET vs PAA trend, they sometimes diverge a bit
I bought PAA at $8.50. The distributions and price increase the last 2 or 3 years has more than tripled my investment. This year alone I should get distributions equaling 25% of my initial investment. I think PAA has resolved their 2015 lawsuit and tax issues. They are reducing preferred stock and their higher dividend payments, and are making good M&A deals. I agree that your analysis of distribution cuts in the last 20 years without explaining why they happened and why they are in great shape now is a bit silly. I’m actually okay with lower stock price for now since it increases my total stock amount each quarter. Later at a much higher price this will be a great retirement or inheritance stock.
Thanks for the comment, Tommy. Certainly that first story was a bit silly, as intended. I hope you found insight in the rest of the article. Best of luck with this one.
I own PAGP because I'm Canadian and owning PAA would be insane.
Let's just say I could not have timed my entry into this one better. Curiously, when I was doing my research back then, analysts mentioned past misadventures but nothing of the Kelcy Warren flavour. That would have kept me away. To be fair, I'm a bit of a fan of KW's damn the torpedoes approach, particularly with law suits. Most companies would pause construction of whatever they were building when faced with a law suit, KW seems to assume he'll win in court anyway, and just keeps on building. Admire the chutzpah, just don't want it in my portfolio.
On the mistakes side, mine are legion, but I've learned from them. So what I'm always looking for when interviewing a prospective employee is not if they've made mistakes, but if they've learned from them. I'm also 65 and single, so dating is a perilous endeavour, but its the same process. There's people who learned from their mistakes and there's people determined to repeat history. The latter need to be eliminated from the dating pool.
So your analogy here struck a chord. Its a large position for me. Up 70% (yaay!) plus the dividend at 7% and growing is attractive. Sounds to me like the management team has learned from their mistakes. But its the same as dating. Once you find out about some bit of crazy you didn't know about at first, you keep an eagle out for it going forward. Excellent article as always, I will keep an eagle eye on this one for a while.
Debt was big issue 5 years ago.. I believe the PAA debt I own has been upgraded twice since I bought it. I did not know any of the history you described above. Simple 5yr price chart on PAA is remarkable. Sold units twice and bought it back again both times at higher price during that time. I wouldn't hate buying it here but have enough for now. TY Paul
If ET and PAA are so close, why not split the baby and own both? I did this with CVE and CNQ and haven’t felt remorse yet. The effort required to squeeze the last bit of performance just wasn’t worth the time, when the final result could be determined by an unknown unknown..
My preference is to own fewer positions, so I can focus fully on each.
Mine too but something has to give.. And I get diversification as a bonus😎
By the way, I own both
Great article as always. I was looking forward to that one. Unfortunately your conclusion was the same as the one I already had, that PAA was rather comparable to ET. Was hoping you would convince me otherwise and one or the other was superior value! 😅 Sticking with my EPD, MPLX, WES and ET for now, but it is worthwhile to monitor the ET vs PAA trend, they sometimes diverge a bit
Alas, there we are.
I bought PAA at $8.50. The distributions and price increase the last 2 or 3 years has more than tripled my investment. This year alone I should get distributions equaling 25% of my initial investment. I think PAA has resolved their 2015 lawsuit and tax issues. They are reducing preferred stock and their higher dividend payments, and are making good M&A deals. I agree that your analysis of distribution cuts in the last 20 years without explaining why they happened and why they are in great shape now is a bit silly. I’m actually okay with lower stock price for now since it increases my total stock amount each quarter. Later at a much higher price this will be a great retirement or inheritance stock.
Thanks for the comment, Tommy. Certainly that first story was a bit silly, as intended. I hope you found insight in the rest of the article. Best of luck with this one.
I own PAGP because I'm Canadian and owning PAA would be insane.
Let's just say I could not have timed my entry into this one better. Curiously, when I was doing my research back then, analysts mentioned past misadventures but nothing of the Kelcy Warren flavour. That would have kept me away. To be fair, I'm a bit of a fan of KW's damn the torpedoes approach, particularly with law suits. Most companies would pause construction of whatever they were building when faced with a law suit, KW seems to assume he'll win in court anyway, and just keeps on building. Admire the chutzpah, just don't want it in my portfolio.
On the mistakes side, mine are legion, but I've learned from them. So what I'm always looking for when interviewing a prospective employee is not if they've made mistakes, but if they've learned from them. I'm also 65 and single, so dating is a perilous endeavour, but its the same process. There's people who learned from their mistakes and there's people determined to repeat history. The latter need to be eliminated from the dating pool.
So your analogy here struck a chord. Its a large position for me. Up 70% (yaay!) plus the dividend at 7% and growing is attractive. Sounds to me like the management team has learned from their mistakes. But its the same as dating. Once you find out about some bit of crazy you didn't know about at first, you keep an eagle out for it going forward. Excellent article as always, I will keep an eagle eye on this one for a while.
🦅
thanks
Debt was big issue 5 years ago.. I believe the PAA debt I own has been upgraded twice since I bought it. I did not know any of the history you described above. Simple 5yr price chart on PAA is remarkable. Sold units twice and bought it back again both times at higher price during that time. I wouldn't hate buying it here but have enough for now. TY Paul
You are welcome.
Western looks attractive superficially. Have you looked into this one?
I own WES so there is some belief. I wrote them up here: https://focusedinvesting.substack.com/p/western-midstream-a-better-future?r=3haij3
There are also uncertainties about what the new CEO will do. He seems better suited to some financial deal than to operating the business long term.