By Marin Katusa

Let’s begin by positioning the sector. Investing in a pipeline company is similar to investing in a utility: Like electricity providers, pipeline companies operate in heavily regulated environments, and once they are up and running, pipeline operators enjoy stable cash flows from long-term contracts.

In an economy where uncertainty is the new norm and speculation is a more dangerous game than usual, investors are gravitating toward income-generating investments. However, it’s not only the current economy that’s pushing investors toward defensive stocks. As US baby boomers retire, they tend to reduce the risk levels in their investments and move toward steady-as-she-goes, income-generating stocks.

Unfortunately, those two forces also mean that many of these defensive stocks are trading between 14 to 20 times forward earnings, putting them at the higher end of their historical range. More on that in a bit. READ MORE…

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