Altagas Ltd (ALA.TO)

Lately, the share price has been challenged. He thinks the WGL acquisition in Washington will happen likely by mid-year, though may get delayed. Their recent quarterly report and dividend were both fine. But they did announce they didn't sell their California assets. This is in an iffy market as interest rates rise. Dividend is okay. They have lots of good assets.

There’s nothing particular wrong with this company. It still has pending regulatory approvals that have been resolving more slowly than expected. Management is good and he thinks the acquisition they made is strong. (Analysts’ price target is 31.20$)

Wait for the actual demand that is expected in the air conditioning season. We have seen an overall downtrend, but it is still not a bad play.

Is the dividend sustainable? He sold their position about three weeks ago. They made a massive acquisition with WGL, but it has not been finalized and that has been a problem – he thinks it may take a year to get regulatory approval. They loaded up with debt for this transaction, which may require them to sell some of their assets later on. Overall, he likes the acquisition and the company.

He's seen all the power names come down even before the downturn. Dividend will likely be fine. He doesn't own it (owns Fortis and Emera instead). This space has been oversold. People are overly sensitive about interest rates rising. Could see a bounce, but doesn't expect that in the short term. 8.2% yield.

There have been concerns with the company and operations over time. The decline in 2017 has turned into base building. Natural Gas tends to do well in March. This is probably not a bad time to buy if we see it start to pick up a bit.

Getting shy with all utilities. First time in many years he's been cautious in this sector, because interest hikes are finally coming. So, ALA's debt service could go up. No to Altagas for now, though maybe buy later.

It has struggled because it is equated with energy. It also is increasingly a utility company. He loves their assets. 7.8% yield and they just raised the dividend. At some point the true asset value will show.

Pembina Pipeline (PPL-T) or AltaGas (ALA-T)? He doesn't particularly care for one over the other. In terms of safety, he would probably prefer Pembina, although the yield isn't as good. This one has a dividend that isn't covered, and increasingly you are getting oil/gas companies that are cleaning up their act to get their financials under control, cutting the dividends tends to be high on the list of things to do. Looking at their balance sheet, that would be a good thing for this company to do.

You have to ask yourself why is the market trading this down to the point where the yield is 7.5%. Is there concern about sustainability? For now, the dividend looks sustainable. The market is sceptical about their US undertaking. He sold his holdings in the fall of 2016. Prefers others. 7.5% dividend yield.

He really likes the utility space in Canada. It's a sector he feels will do well this year. Made a good acquisition and are almost through the regulatory process, which is just a few more hurdles. Not trading at an expensive multiple, and you are getting about a 6.5% yield.

Feels the dividend on this is safe. They are in the process of making a big US acquisition, which is supposed to close later this year. That could be a bit of an overhang until they actually close it. A good income stock. Dividend yield of 7.5%.

The chart shows it is approaching an old support level it bounced off of in 2015 several times. The chart is not showing too many signs of it wanting to break out. Recent highs have been progressively lower and the lows are progressively lower as well. It could go back down to the mid-$20. He looked at it recently, and it didn't interest him enough to buy it.

Your greatest concern would be how much of their actual earnings/cash flow are they paying out. In this case, on a 4-quarter trailing base, it would be 65%. A year ago, it was a bit higher at 57%. When buying a stock, you should buy it with a payout of less than 75%, so this one qualifies. The overall rank in his dividend strategy is 122, so it appears to be a reasonable bet. Dividend yield of 7.5%.

(A Top Pick Feb 14/17. Down 1%.) This continues to be one of the best price securities in the marketplace. 7.5% dividend yield and a solid management team.