Pembina Pipeline Stock Has 40%+ Upside Potential
Just outside of the town where I live, you can see hundreds and hundreds of pumpjacks pepper the land, bringing oil to the surface. What you don’t see, is the underground infrastructure that takes that oil from the wellhead to refineries.
And those pipelines are the overlooked heroes of the energy sector. You can think of them as toll bridges that oil companies need to use to get their product to market. Best of all, with most contracts, oil companies need to pay midstream companies whether they use their pipelines as much as they thought they would or not.
Because pipeline companies earn a fee for each barrel shipped, they’re on the receiving end of reliable cash flow and dividends. And, like all good toll operators, Pembina Pipeline Corp (NYSE:PBA, TSE:PPL) has built in inflation escalators too.
Pembina Pipeline Corp is a Calgary, Alberta-based oil and gas company that provides energy transportation and midstream services across North America. The company operates through four segments: Partnerships, Pipelines, Facilities, and Marketing & New Ventures. (Source: “Operations,” Pembina Pipeline Corporation, last accessed November 5, 2026.)
Through the Partnership segment it has relationships with the Alberta Carbon Grid, Cedar LNG (a floating LNG facility), and Chinook Pathways (formed to pursue ownership in the Trans Mountain Pipeline).
ThePipelinessegment provides customers with pipeline transportation, terminalling, storage and rail services in key market hubs in Canada and the United States for crude oil, condensate, natural gas liquids and natural gas.
The division manages pipeline transportation capacity of 3.0 million barrels of oil equivalent per day (mmboe/d), above ground storage of 10 million barrels of oil (mmbbls) and rail terminalling capacity of approximately 105 thousand barrels of oil equivalent per day (mboe/d).
The Facilities Division, which manages the company’s natural gas processing and natural gas liquids (NGL) fractionation facilities and related infrastructure, includes approximately 410 thousand barrels per day (mbpd) of NGL fractionation, 21 million barrels of oil of cavern storage and associated pipeline and rail terminalling facilities. The company also has a liquefied propane export facility on Canada’s West Coast.
Strong Q3 Earnings Growth
Pembina reported solid financial results for the third quarter ended September 30, 2026. All figures are in Canadian dollars. The company reported third quarter earnings of $570 million, or $0.92 per share, almost double the $286 million, or $0.43 per share recorded in the same prior year period. (Source: “Pembina Pipeline Reports Results for the Third Quarter of 2026,” Pembina Pipeline Corporation, November 5, 2026.)
It reported adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of $1.128 billion, or $1.94 per share, up from $1.03 billion, or $1.78 per share in the third quarter of 2025. Adjusted cash flow from operating activities came in at $751 million, or $1.29 per share, a big improvement over third quarter 2025 adjusted cash flow of $648 million, or $1.12 per share.
Increases 2026 Guidance
Pembina updated its 2026 adjusted EBITDA guidance range to $4.45 billion to $4.55 billion from previous guidance of $4.35 billion to $4.55 billion.
Management noted that it is currently trending to the upper end of the range based on the current commodity price outlook.
PBA Stock Hits Record High
As you can see in the chart below, PBA stock provides shareholders with great long-term gains. It’s stock experiences volatility like the broader market, but, like any great industry leader, rebounds quickly.
In July, PBA stock hit a record high of $51.58 per share. It has experienced a short-term sell-off but continues to have great long-term growth potential too.
Wall Street analyst’s have provided a 12-moth share price target range of $64.00 to $68.00 per share. At current levels, this points to potential upside of approximately 33% to 41%.
Even hitting the lower price target would put PBA in record territory.
Chart courtesy of StockCharts.com
Increases Quarterly Dividend to $0.735/Share
What’s better than a stock that recently hit a record high? One that also increased its dividend payout. In November, Pembina’s board announced a quarterly dividend of $0.735 per share, that’s up from $0.71 per share in November 2025. (Source: “Stock & Dividend,” Pembina Pipeline Corporation, last accessed November 6, 2026.)
This works out to an annual distribution of $2.07 per share, for a forward annual distribution of 4.35%.
The Lowdown on Pembina Pipeline Corp
Pembina Pipeline Corp is a great pipeline stock reporting solid financial results. This helps it provide shareholders with a growing annual distribution. It also provides shareholders with reliable, long-term capital appreciation too.
Over the last five years, with dividends reinvested, PBA stock has provided total returns of 231%. Without reinvesting dividends, the total return slips to 137%; still a great return, but not as good as if you’d reinvested those dividends. This goes to show the power of compounding.
PBA stock is trading near record levels, but Wall Street analyst’s expect PBA stock to hit fresh highs over the coming quarters.
There’s reason to be bullish on PBA stock. Back in April, Pembina provided a business update that included a target to deliver fee-based adjusted EBITDA per share compound annual growth of five to seven percent through 2030.
That’s good news for passive income investors and the 724 institutions that hold 61.9% of all outstanding shares. Three of the biggest holders include Royal Bank of Canada, Bank of Montreal, Vanguard Group Inc., and Goldman Sachs Group Inc. (Source: “Pembina Pipeline Corporation (PBA),” Yahoo! Finance, last accessed November 6, 2026.)
For information and education only; not investment, tax or legal advice. Yields and prices are as of the publication date.
