Wednesday, February 6, 2013

Inter Pipeline Fund Added to my TFSA

As noted in my last post, one of the companies I was looking to add to in my Tax-free savings account ("TFSA") was Inter Pipeline Fund ("IPL"). When IPL dipped earlier this week to $22.60, I was able to act quickly, adding to my position in the company.

I was very comfortable adding more IPL to my TFSA holdings for several reasons. Over the last five years, the company's stock price has more than doubled, while they've been able to grow their distribution by an average of 6.4% per year. Adding to IPL on its recent dip allowed me to acquire the stock when the dividend yield was 4.9%. The company's debt is investment grade rated by both Moody's and S&P. There's also the fact that the recent slip in the share price was caused by IPL's large 2013 Capital Expenditure projections. Being a dividend growth investor, with a long-term investment horizon, I'm confident the company will be able to fund their 2013 CAPEX program, and that these initiatives will allow the company to keep increasing their distributions in the long-term. Lastly, given management's past performance, and their commitment to undertake projects that add value for unit holders, I'm comfortable that they will continue these actions going forward.

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