Altagas Ltd (ALA.TO)

Many ask him about this stock. He sold his shares recently. Altagas sold its crown jewel asset in BC and replaced it with a lower-case one, which they're now pushing for closure. Their free cash flow isn't impressive. This could grind higher to $28. They will likely sell more assets and borrow more to complete their WGL acquisition.

Name has been hurt, but think it’s getting its legs. Bottomed out around $22.75, now a nice trend. Resistance around $26.40 and also $30. Sold recent hydro assets for a pretty penny, plus WGL will be a catalyst when it closes. Good risk reward. Really good dividend, expect a bit of volatility ahead. Interest rates really screaming up will hurt it, but probably won't happen. Will probably need to do a secondary financing, which will depress the stock. Going forward, as a yield-focus, you’ll be pretty happy. Has been doing a DRIP. (Analysts’ price target is $28.48.)

He used to own it for a long time. Pays a 8.8.% dividend when yield stocks are finding pressure. If you own it, hold it. But don't chase the high yield. A high-yield stuck can be cut (and then sometimes the stock price rises)--and ALA's may or may not be sustainable. He doesn't know.

The yield is relatively safe. High dividend at 8.76%. The big overhang is that they’re waiting for approval on their recent acquisition. Need to sell assets to fund this transaction, plus interest rate sensitivity, has contributed to the pullback. Prefers other names in terms of cash flow growth. (Analysts’ price target is about $28.)

He doesn't follow this. Its down channel is not doing well. Natural gas is performing well, but Altagas has not. He doesn't recommend this.

It has a utility type business. It has the highest debt level amongst its peer group. You don’t want to own this one.

It's trading at a 6-year-low, though it's showing good fundamental value. These are capital-rich projects they're involved in, so the ROE is very low, in this case 3%. You buy this for the dividend, which he thinks is safe. Continue to hold it. He's not a fan of interest-sensitive stocks, so no pipelines or utilities.

The Dividend quality scores seems average. Bloated working capital. Weaker in its group.

He used to own it, selling it in fall 2016 before their huge WGL purchase. He was--and remains--concerned with their high valuation. They also carry high debt and are on credit watch after the WGL acquisition. There are safer options out there.

Dividend yield of 8.5%. They sold it in January. They took on a lot of debt to fund some recent acquisitions. The rating agencies have it on a negative watch because of this. They are trying to do private equity in public markets and they hit a window where funding is a little tight. He thinks the dividend is still safe.

How safe the dividend is? Dividends are never safe in the energy space. Dividends are the first thing to go if things don’t work out. Currently the stock is OK but that is the first thing he would look at. An energy stock and also a news driven stock here.

They're finalizing their big WGL acquisition in the U.S. Their dividend is safe, despite pressure from rising interest rates, but the overhang is investors wondering what asset sales will be done in order to fund this WGL deal. The yield is currently safe.

An 8% dividend yield – Ask yourself why. The reason is that the company has been jacking up the dividend, increasing debt and issuing stock over the last few years. The dividend is talking to you. They really should be paying down debt. Buyer beware.

Sustainable long-term cash flow. True, its charts are unflattering, but it's grown its dividend 50% over the past fve years. It continues to be on sale, so he continues to recommend it. It's a bargain now and the most recent drop is egregious. The market has been negative on the WGL acquisition, but utilities in metropolitan areas (Washington DC) with solid, long-term growth don't come up often. Cities will always utilities. Their cash flow will sustain the 8.8% dividend. You're paid to wait. He's buying for clients. (Analysts' price target $28.10)

(Past Top Pick on Oct. 3, 2017, Down 8%) They basically got their WGL deal approved yesterday and now have four approvals, though there's one more later this week. They've done everything they promised--they got their approvals and he's confident this deal with close. They need to announce some asset sales to shore up the funding plan. It got hit in the last quarter when they took some power assets off the market in California. Compared to say Enbridge, ALA has so many assets and so much cash flow. He belives they will find a buyer for those assets and this stock move higher. This stock is cheap now and they pay a big dividend. Now is a good entry point. The WGL deal is accretive. Dividend of 8.8% is safe and can even grow it a few years. The chairman owns a lot of stock.