Is This Beaten-Down 5.5% Yielder Now a Buy?

Before the oil market downturn, Plains All American Pipeline (NYSE: PAA) was a high-powered growth stock. Over the five-year period from 2009 to 2014, the oil pipeline company delivered a nearly 300% total annual return -- more than double that of the S&P 500 -- fueled by rapidly expanding oil production in North America that drove the need for new oil-related infrastructure. However, the collapse of oil prices since late 2014 has had a significant impact on Plains by causing the volumes flowing on its pipelines to fall, which has adversely affected earnings and put a strain on its balance sheet. As a result, the company struggled to obtain financing for its growth projects and has lost more than 50% of its value over the past three years, forcing it to reduce its distribution to investors twice.

That steep slide in the company's market value, however, looks like a compelling opportunity for long-term investors to jump aboard. That's because even with those payout cuts, Plains still yields an attractive 5.5%. Add in the visible improvements on the horizon to both its balance sheet and growth prospects, and Plains could deliver an enticing blend of income and growth in the coming years.

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Source: Fool.com