Altagas Ltd (ALA.TO)

This stock, along with Keyera (KEY-T) and Pembina (PPL-T), has not performed well. The one difference is that this company really is more of a stable cash flowing entity. They have significant Run of River projects and are going to materially increase EBITDA, in fact double it, within the next few years. It is fully contracted and fully funded. The Run of River projects are underpinned by a long 20-25 year power purchase agreements with governments.

Likes it. They brought on 2 hydro electric projects recently and the cash flow has help them. They are well positioned longer term. A significant dividend yield.

It’s a well run company. They all pulled back with the weakness in crude. She prefers PPL-T and IPL-T in the space because they have a higher yield.

A very nice story in terms of growth. What makes it unusual is that it is viewed as an energy stock, but their growth investments are as much utility as they are in things that are related to energy. Recently they’ve been hit by Alberta power prices, however they are putting on dams in BC, which are traditional utility type revenue generators. That offers stability which you just can’t find. Good yield of about 4.5%-5% which can grow over time. He is looking at this one.

Suffering along with all the other Alberta stocks, but he doesn’t see the situation deteriorating for them to any great extent. Thinks the dividend is safe and sustainable. The long-term aspects relating to gas remain in question. Gas exports seem to be a foregone conclusion, but when?

A core holding. He likes it here. It sold off about $6 this year. A growth rate of 15% is being priced in by the market. Below $40 is a good entry point.

They have long term contracts with solid blue chip companies for a product at a fixed price. Well managed, good balance sheet and good access to the debt markets.

(A Top Pick Aug 6/14. Down 18.81%.) Has held up reasonably well. It had looked like the LNG thing was going to move faster. They have the only natural gas pipeline to the coast. Also, have some other nice energy assets.

People don’t appreciate how much their business is going to change in the next 2-3 years. They have very significant “run of river” power generation assets that are going to significantly affect an increase in cash flow and operating profit. Those “run of river” assets are secured by 25 year power purchase agreements that are indexed to inflation, so there is very little commodity risk. The commodity risks that exist are going to decline significantly. Part of the reason the stock has been punished versus some of the other names, is that it tends to be perceived as having more commodity price exposure, and he doesn’t think that is the case.

The payout is about 45% of cash flow. They recently raised their dividend about 9% and he feels this is sustainable. Growth projects coming in will allow them to grow their dividend going forward.

She quite likes it. It lagged its peer group. Some exposure to the Alberta power market. They have a very stable base of earnings. There are a number of potential projects coming on. There are also smaller scale LNG opportunities. It is a good name and something to look at here. It is an attractive entry point. It has not rebounded as much as the peer group.

His model price is $32.42. Earnings estimates have been coming down. The dividend distribution is higher than what they are earning. They are paying out $1.82 and the consensus on their earnings is $1.39. Their balance sheet is eroding.

(Market Call Minute) At these oil prices and gas prices there is not the drive for those companies to get going.

A well-run company. They have all pulled back because of the decline in crude oil prices. It could likely get back up to $44 over the next couple of years.

Loves this one. Did a deal with Painted Pony (PPY-T) that was brilliant. It gives them leverage to the LNG story on both sides of the border. They are in the power plant extraction and the processing business, all the right ones. They don’t care about the actual commodity itself. They are the conduit from the wellhead to the market. Very secure dividend of 4.82%.