Irrespective of the uncertainty, investors can make a steady passive income through dividend stocks with monthly payouts. Among the ones that pay monthly dividends, investors could consider investing in Pembina Pipeline (NYSE:PBA)(TSE:PPL) stock. Its stock has outpaced the benchmark index in 2022. Meanwhile, it sports an Outperform Smart Score on TipRanks.
Here’s Why Pembina is an Attractive Passive Income Stock
Pembina Pipeline is a Canadian energy infrastructure company with a market cap of $18.05 billion. It has a solid track record of dividend payments and growth. Pembina has paid over C$11.6 billion in dividends since 1997. Moreover, in the past decade, Pembina’s dividends have grown at a CAGR of 5%.
Pembina’s dividends are backed by its fee-based cash flows. It is worth highlighting that Pembina’s assets are mostly contracted, implying they generate solid earnings to cover its payouts. Pembina’s 88% of adjusted EBITDA comes from this fee-based arrangement. Moreover, its adjusted EBITDA has grown at a CAGR of 11% in the last decade, supporting its cash flows and dividend payments.
While its dividends benefit from its resilient business model, Pembina stock offers an attractive dividend yield of 6.2%.
Is PBA a Good Stock to Buy?
On TipRanks, Pembina Pipeline stock has received five Buy and four Hold recommendations, which translates into a Moderate Buy consensus rating. Meanwhile, the analysts’ average price target of $37.12 indicates 14.2% upside potential.
TipRanks’ data shows insiders bought $324.4K worth of PBA stock last quarter. Further, PBA stock has an Outperform Smart Score of eight on 10 on TipRanks.
Bottom Line
Pembina’s solid dividend payment history, a resilient business model with contracted assets, and a high yield of 6.2% make it an attractive investment to earn stable monthly passive income.
