Altagas Ltd (ALA.TO)

Is the dividend safe? Safe-ish. Better things are happening. If the US acquisition goes through it is going to be an OK story.

IPL vs ALA - He likes them both. There's upside in IPL. ALA pays a good dividend of around 8% and its prices has come down nicely so it's a good time to step in. If things turn around in Alberta, ALA will benefit with a nice move and institutional money will move in.

Many ask him about this stock. He sold his shares recently. Altagas sold its crown jewel asset in BC and replaced it with a lower-case one, which they're now pushing for closure. Their free cash flow isn't impressive. This could grind higher to $28. They will likely sell more assets and borrow more to complete their WGL acquisition.

Name has been hurt, but think it’s getting its legs. Bottomed out around $22.75, now a nice trend. Resistance around $26.40 and also $30. Sold recent hydro assets for a pretty penny, plus WGL will be a catalyst when it closes. Good risk reward. Really good dividend, expect a bit of volatility ahead. Interest rates really screaming up will hurt it, but probably won't happen. Will probably need to do a secondary financing, which will depress the stock. Going forward, as a yield-focus, you’ll be pretty happy. Has been doing a DRIP. (Analysts’ price target is $28.48.)

He used to own it for a long time. Pays a 8.8.% dividend when yield stocks are finding pressure. If you own it, hold it. But don't chase the high yield. A high-yield stuck can be cut (and then sometimes the stock price rises)--and ALA's may or may not be sustainable. He doesn't know.

The yield is relatively safe. High dividend at 8.76%. The big overhang is that they’re waiting for approval on their recent acquisition. Need to sell assets to fund this transaction, plus interest rate sensitivity, has contributed to the pullback. Prefers other names in terms of cash flow growth. (Analysts’ price target is about $28.)

He doesn't follow this. Its down channel is not doing well. Natural gas is performing well, but Altagas has not. He doesn't recommend this.

It has a utility type business. It has the highest debt level amongst its peer group. You don’t want to own this one.

It's trading at a 6-year-low, though it's showing good fundamental value. These are capital-rich projects they're involved in, so the ROE is very low, in this case 3%. You buy this for the dividend, which he thinks is safe. Continue to hold it. He's not a fan of interest-sensitive stocks, so no pipelines or utilities.

The Dividend quality scores seems average. Bloated working capital. Weaker in its group.

He used to own it, selling it in fall 2016 before their huge WGL purchase. He was--and remains--concerned with their high valuation. They also carry high debt and are on credit watch after the WGL acquisition. There are safer options out there.

Dividend yield of 8.5%. They sold it in January. They took on a lot of debt to fund some recent acquisitions. The rating agencies have it on a negative watch because of this. They are trying to do private equity in public markets and they hit a window where funding is a little tight. He thinks the dividend is still safe.

How safe the dividend is? Dividends are never safe in the energy space. Dividends are the first thing to go if things don’t work out. Currently the stock is OK but that is the first thing he would look at. An energy stock and also a news driven stock here.

They're finalizing their big WGL acquisition in the U.S. Their dividend is safe, despite pressure from rising interest rates, but the overhang is investors wondering what asset sales will be done in order to fund this WGL deal. The yield is currently safe.

An 8% dividend yield – Ask yourself why. The reason is that the company has been jacking up the dividend, increasing debt and issuing stock over the last few years. The dividend is talking to you. They really should be paying down debt. Buyer beware.