Altagas Ltd (ALA.TO)

This has operations both in Canada and the US. Energy infrastructure. They have power, and a utility segment. Made a big US acquisition a few months ago of a utility, which they financed partly with debt and partly with instalment receipts. Feels the dividend is sustainable. The instalment receipts are yielding over 7%. There is a concern in the market that they are going to have to raise more equity, but he doesn’t feel that is well-founded.

They are doing an acquisition of a company that is bigger than they are, causing the stock to be down. It is on his short list for studying. They will sell off assets once the acquisition is complete.

Hasn’t done well lately. Dividend yield of almost 7%. He expects them to increase the dividend this year by 6% or so. The stock is going sideways, because they are in the midst of doing a US acquisition, and the market doesn’t like it as it moves them more towards a utility.

(ALA.R-T Subscription Receipts. 9/4/18.) This is part of a financing that was done in February in a deal to acquired WGL for $8.5 billion. This is scheduled to close in 2018, and subscription receipts are a way to play that. Should the deal fall apart, you get your money back. He looks at this as a “no lose” as you get close to 7% to wait.

A good company and well-managed, but the environment still hasn’t really improved in Alberta to the point where you would really want to step in. There are others that are a lot safer in terms of the dividend. There are decent yields and growth elsewhere.

Prefers growthier pipelines. This one is a mixture of some pipe, some power generation, and is a little more BC oriented. With the big acquisition, the receipts still out there, and that has been pressing on the stock for a while. The entry point is probably okay at around $30-$31, and the 6.8% dividend yield is relatively safe.

This has been quite active in acquisitions. They bought Washington Gas & Light company in the DC area, as a big foray into the US. They feel it provides them with some unique diversification, as well as a kind of rollup capacity in the market. It is going to be a “show me” story, and is going to take a long time. In the meantime, they’ve suffered with the oil/gas patch in general. It’s quite exposed to gas in its midstream operations. He believes the 6% dividend is safe. It probably won’t be growing as quickly as it has, because they have to absorb the WGL assets. They successfully raised capital. Thinks they are in OK shape, but doesn’t feel this is the best place to be in that space right now. Prefers others.

He does not know how sustainable the dividend is. The earnings have been slipping away. There is a gap of about 24%. The stock is not horribly priced, but he does not like a company paying out more than they make. They are paying out more than twice their earnings. The quality of the balance sheet is okay, but not fabulous.

This is probably a good entry point in buying the subscription receipts. They are in the process of trying to acquire Washington Gas and Light, a large US utility. Did a large financing, issuing subscription receipts, which turn into the stock if they close on the acquisition. They are actually trading at a discount, so a pretty reasonable way of entering the stock.

It is painted with the same brush as the rest of the group. Their recent acquisition in WGL Holdings ups their exposure to power and electricity and the greater consistency of cash flow. They have north of 6% sustainable dividend yield. (Analysts’ target: $36.00).

From a technical perspective, this is really at its support level. If it breaks below $29, that would be a negative sign.

Made an acquisition in the US that is going to strengthen their growth outlook. Feels the dividend is safe. There are a number of players in that space, kind of midstream operations/pipeline. She owns Inter Pipeline (IPL-T) and Pembina (PPL-T) which she knows better, and which also have good cash flow growth. Dividend yield of 6.8%, which is sustainable.

This is one you could probably get into now. It seems to be in a sideways trading pattern in the last couple of months. Pays a nice dividend. He thinks there are opportunities for them to get some growth. If you are a long-term investor, it is something that you could start accumulating now, and collect the dividend, and probably do well.

It has been pretty lack luster for the last few years. A third of its income is from power and utilities, but the market does not care about that. Their equity raise was oversubscribed. With their recent acquisition they have said they can get 8-10% increases in dividends after the deal closes. (Analysts’ target: $36.00).

The dividend is sustainable. They did an acquisition in the US. The market did not technically like it because of equity issue, but he things it is transformational and incredibly accretive. It will take about 18 month for the process to go through and for them to close the deal. It is cheap and you will see it outperform next year. Their assets are incredibly strong.