Altagas Ltd (ALA.TO)

He added a bit recently and he has held it for a long time. The reason he bought more is that he's entering the Alberta economy a bit--Canadian oil is ridiculously cheap. The dividend, over 8%, is sustainable, and it gives him some cash flow.

He likes it. It is a good utility company. It pays a good dividend yield. They just finished up a good transaction and it should be accretive to earnings soon. They sold off some assets that were not contributing to earnings.

Their recent earnings were mixed. Now that the acquisition of WGL is now closed, things should become more transparent. They were sold off with the concerns of rising interest rates. It is looking much better and is a good investment now.

It was a right place to be at a time. Reasonable payout ratio and an 8% dividend yield. He would wait it out. If he bought it are 30 he would hold it at 26.

The completed the acquisition of WGL recently that will add cash flow. They are working on the Ridley Island propane export terminal on the west coast, marking the first time propane will be exported to Asian and European markets. The CEO departed recently and he views it as not a major concern regarding operations of the company. He would be buying now on the recent price weakness.

He owns it personally. The WGL acqusition has been approved. High yield of 10%, but it carries a lot of debt on the acqusition side, so he didn't buy it for his client portfolios. This will probably move up from the current $28.

Under his model, this stock is overpriced by 15%. Also it is paying out over $2 in dividends but is expected to earn only about $1 this year and $1.35 next year. This is similar to Crescent Point. The stock is getting a bump from oil prices but he would not buy it until it comes down to $21.

Company that stared in Canada and expending in the US. The yield is still abnormally high. He thinks that they can still sustain that. They have been great at selling assets at good valuations. He thinks the yield is crazy and should get [through price appreciation] to more normal levels like 5%. They won’t cut the dividend as they have funding. (Analysts’ price target is $28.95)

It is the same cap as ENB-T as they are in the big utilities space. He was attracted to what they can do in the mid-east coast US. They can move gas to big US markets from within the US. The dividend is probably safe. He thinks it still offers great value.

He has recommended this several times. The acquisition is now closed on WGL. They sold about 1/3 of their Northeast BC assets to pay for it. This has worked out well, because these assets are trading at a premium in the private capital market. He has been buying since $24 and likes the 7% yield.

They used to own a lot of this stock, but when interest rates began to rise it raised the risk-free rate and made running the business more difficult so they sold out. The company already has a moderate level of debt and the WGL acquisition will add to their leveraged position. They will manage the new asset well, but he thinks the risk of rising interest rates will add headwinds.

They have an export terminal for propane in BC. Alberta is awash in propane. They are building this export facility. He used to own this. WGL Holdings should close any day and improves their metrics considerably. The burden of proof is on them. This is not that synergistic an acquisition.

He would not touch this stock. The high yield is deceptive. It pays out more than it earns and so the balance sheet is deteriorating by 5% per year. His model price is 13% lower than yesterday’s closing price.

Is the dividend safe? Safe-ish. Better things are happening. If the US acquisition goes through it is going to be an OK story.

IPL vs ALA - He likes them both. There's upside in IPL. ALA pays a good dividend of around 8% and its prices has come down nicely so it's a good time to step in. If things turn around in Alberta, ALA will benefit with a nice move and institutional money will move in.