Transalta Corp (TA.TO)

Had owned at the $13.40 level and took some profits when it had moved up sharply in January. They then cut the dividend. Very cheap currently. Management has to prove that they can be consistent on the operations side and if they do that, with the incremental cash flow from cutting the dividends, they should be able to grow the cash flow at about 4% per year over the next 3, 4, 5 years. With this valuation you should get decent double digit returns. You’ll have to be patient.

They have a lot of coal fired gas plants that may or may not be coming off line here. This is a big opportunity to make more money because when they renew contracts the coal price will be more favourable for them. They have a lot of debt. You don’t need to own a company like this where you are banking on a turnaround.

It’s okay at the current level. Within the next 5 years it could have potentially 30% upside. It looks attractive, but he would like to see support come in, which it is started to have happen.

Unfortunately it hit the news with a dividend cut and that is never good. It has been a difficult environment to show any kind of growth for this company. There are a lot better places where you could do much better.

As a long-term hold for yield, there are better companies that pay the same yield. You would have thought that an independent power company would be a good preserver of capital, but this has been a destroyer of capital.

They cut their dividend by 38% unexpectedly. They want to do M7A to grow. Her preference would be other income producing stocks.

He is somewhat constructive and has been picking away at it down here. Most if not all of the bad news is out of the way down here. It will be a long workout and repair program for the company. Doesn’t believe it is a value trap.

It looks cheap. He has been adding a bit but prefers AGN-T. Rates as sector perform.

You don’t want to run from it here after the surprise dividend cut. It could dip below $13 temporarily. For dividend players you want to accumulate it here. You are going to get a shareholder changeover.

4.6% resets. If you want to play this company, play the common. You have no instituitional support for non-investment grade preferreds.

A lot of their facilities are somewhat dated. The company has always been good about paying the dividend, but the cut is probably a good thing. Thinks it will go sideways from here. The yield is still reasonable. The damage has been done.

With this and most of the major pipelines, the multiple is always going to be high in this type of environment. Also there is a longer term overhang of rising interest rates, which could pull these down. However, he feels the dividend is safe and there is a pretty good runway of infrastructure build-up for a number of these names, not just this one.

Utility, primarily based in Western Canada. New CEO is trying to turn things around to grow more and have a more sustainable dividend. He primarily looks for companies that can grow their dividend and he is concerned how this company is going to do that. Would look for others such as Keyera (KEY-T) or Pembina (PPL-T).

Has always been a problem as they have always under delivered. Used to own their debt last year, but has always stayed away from the stock because their assets always needed a lot more capital than was expected and there was a risk of them cutting their distribution.

(Market Call Minute.) Starting to warm up to this and would be buying it here. 8% yield and the dividend is sustainable.