Altagas Ltd (ALA.TO)

(Market Call Minute.) You hold this for the yield. This has a little power and a little gas.

(Market Call Minute.) A lot of the energy infrastructure companies are making a great comeback. This has been a laggard off the bottom and has made very little progress versus the market. He would prefer something like a TransCanada Pipe (TRP-T), and Enbridge (ENB-T) or even a Pembina (PPL-T).

This is languishing, in part because investors believe that it is going to have to raise more capital in order to continue to fund its projects and continue to grow its products. Its power contracts in California are somewhat worrisome.

Its peers are the pipeline companies and utilities, because this is a company that is kind of half and half. Has underperformed the other pipes in the last year or so. Their power side was hurt by low power prices, primarily in Alberta. The CapX program is not as well contracted as some of the other pipeline companies. That has hurt them. They are going to have good cash flow growth this year, of almost 20%. Have 3 Hydro projects coming on in BC. Also, have a gas processing plant coming on. They have a couple of gas processing plant proposals as well as a power plant proposal in California. Good earnings growth this year. He expects a dividend increase this year of 5%-6%. Dividend yield of 6.47%.

Has a small Short on this. He looks for 2 primary things in stocks. Valuation and price momentum. Valuation tells you that it is a good time to Buy from a price perspective. Price momentum tells you that the timing is right. Unfortunately, this company has both those things going against it. Views 17X EBITDA as being expensive. Doesn’t see a huge amount of downside as it has a good support of the yield and they are doing the right thing to repair the balance sheet. There are better opportunities elsewhere.

From a seasonal perspective, this tends to attribute most of its tendencies to the utility sector, which tends to do well in the summer. From June until about the end of August, the stock gains about an average of 5%. Technically it is not too bad. It essentially has been consolidating. Since a short-term low in May, it is trying to carve out a higher low. Technical resistance is at about $33, and if it can break above that, that could imply significant strength ahead. Watch for it to break above the 200-day average and $33.

A really good business, but feels it has been unfairly put in the penalty box. Two thirds of their business is utilities, gas distribution and power production. They also have the gas processing side of their business. With this, you are buying a cheap utility that is getting put in the penalty box because of one 3^rd of their business. Valuation is reasonable and the dividend is very safe.

Likes the stock because it has excellent management, pays a good dividend, and is a way to have a piece of the energy side without taking too much risk. They have now got into a potential export of propane. 6.5% dividend yield.

Dividend growth is not what it was over the last few years. You are buying it as a bond proxy, rather than a dividend growth stock going forward. The dividend is okay, but there are better names in the utilities. H-T, for example.

The key is the cash flow they generate, which covers the dividend. He views the dividend as safe. Get about 50% of their EBITDA from the US. There is some concern over their volumes from their legacy natural gas plants, but they have diversified from this into hydroelectric projects in BC. He would add to his holdings under $30.

Very well-managed, and unfairly treated. About 2/3 of their business, gas distribution and power is more stable than people give them credit for. Their midstream business is a little more volatile. Dividend yield of 6.2%.

Likes this a lot. It is unfortunate they cancelled their Douglas Channel project. Also, have to face some of the headwinds of the Alberta government in terms of coal plant retirement, etc. by 2030. However, their positioning in the Canadian midstream and infrastructure play makes them an appealing long term hold.

A midstream energy player. Currently walking away from an LNG project, which is hopefully a good thing. Where the big companies can’t get their pipelines built, this company can go into bite-size projects, and redeploy their capital. An energy infrastructure in Western Canada that can go into the US. 6% dividend yield.

A reasonable pick for dividends? Held a little of this in portfolios, but it was really based on the possibility of gas exports and LNG. That seems to be fading into the background, because Australians have opened up some big fields, and the price of an LNG has fallen on big international markets by about 50%. Also, questions if the pipeline gets built to Tidewater in the Pacific. Dividend yield of 6% is maybe a little open to question.

(Top Pick Jan 16/15, Down 16.01%) He was adding in January. It was too oversold. He still likes it long term. Lots of revenue from regulated utilities.