Altagas Ltd (ALA.TO)

Not really a gas producer, so not tied to the price of natural gas. More involved with the transportation. Has 2 big Hydro projects coming on in BC in the next couple of years that will significantly increase their earnings power and will probably get reclassified as a utility rather than energy.

Loves it. Phenomenal run in last little while. New production in BC will increase cash flow next year. Cash flow will be 80% utility-like next year. It will get a multiple expansion next year. 3.7% dividend paid monthly.

A core holding. Likes where they are positioned. They have been acquisitive in buying stable rate of return businesses. Are well positioned going forward in terms of LNG exports. He owns it for growth and for dividend.

(Past top pick May 28,2012 Recommended at $29.78 now $38.94 up 35.97%) Expects it to be $43 to $44 a year from now. Expects to see very good dividends.

He has recommended a few times. Biggest single theme that he is invested in (energy infrastructure). This industry will continue to be revalued. There are a lot of analysts that want to look at the last 10 years, but the opportunity now is different and the growth rate is different. Assets are very long life and contracts have indexing to inflation. They have big new projects that will add significantly to their cash flow over the next two years. If your window is 3 years you get 4% yield and 7-10% dividend years.

Dividend is quite safe. Company has 3 parts. Utility and power parts have long term contracts. Gas part has some real growth potential. Thinks it can grow 10% a year. 4% yield.

Just made a reasonable acquisition in California, which will diversify their portfolios. There are risks in moving out of their territory. A lot of political issues that are hard to understand in how that drives power prices. Paying out about 50% of their cash flow, so the dividend is safe.

Doesn’t think it has reached its full potential yet. In a low growth environment, these are the ideal stocks you want to own. Generates 4%-5% growth year after year. Infrastructure and power, so a fairly reasonable, stable cash flow. Should have room to increase their dividends down the road.

Energy infrastructure. Trading at 10X price to AFFO and all its peers are trading at a little over 12. Great balance sheet. Payout ratio on the funds from operations is probably 45%. Great company. 4.1% dividend yield.

(A Top Pick May 11/12. Up 19.51%.) Just announced a half billion project in the US and are issuing shares to raise money. Good opportunity to add to your position. Can see dividend growth of 10% a year in future. Management team has consistently delivered on good projects and under budget. Yields 4.3%. Good diversified stream of regulated and unregulated businesses.

Likes this because it is fully diversified. They are in production, distribution, energy generation. 4% yield. His company has a $40 target on this and rates it as an outperform.

(A Top Pick March 6/12. Up 21.26%.) Has a very diversified energy infrastructure business. Part of it is regulated and part of it is not. They can probably see a 10% plus cash flow growth over the next 5 years. Have lots of interesting projects.

Currently looking at this one. Seem to be quite nimble. Have done quite well in Alberta. Making deals that look pretty interesting. Basically a utility.

(Top Pick Mar 6/12, Up 17.72%) Diversified mid-stream energy company. Nice yield a little over 4%. Growing cash flow through building new projects. Three new hydro projects in BC with 60 year contracts with BC Hydro that have inflation adjustment. Also, have a contract with a Japanese company for LNG and liquefied petroleum. Modest distribution growth that accelerates over the next 5 years.

(A Top Pick Jan 9/12. Up 20.01%.)