Altagas Ltd (ALA.TO)

Sold his holdings earlier this year. There was some leverage to natural gas that he wasn’t that comfortable with. Feels the dividend is safe.

He was looking for an alternative to Transalta (TA-T), and this one stepped into the picture. The real disappointment is that a lot of the long-term plans for LNG export seem to be fading into the sunset. Also LNG on the international market has fallen about 50%. Good management. The environment that they are having to deal with has gotten a lot tougher. He has sold most of his holdings off. Dividend yield of 6%+, which he feels is reasonably safe.

(Market Call Minute) Two thirds of their portfolio is from renewable, stable power generation assets. Little commodity price exposure and good valuation.

This is really good at driving little projects such as power, energy processing, etc. There are lots of investing they will be able to do, but are just not announcing it right now. 6% dividend yield.

An excellent operator, and you will see some growth from this over time. This is not just gas, but they have a very diversified portfolio including some water resources. Expects you will see ever-increasing distribution as they continue to build new projects and expand. Ranks fairly well in his process.

Thinks this was completely, unfairly swept up in the plays that happened last year around Alberta. It has a great management team. Just brought on another plant for Painted Pony (PPY-T), under budget and under time. 60% of their business is related to power generation and distribution utilities, not even related to pipelines, so it is really an energy infrastructure company. He likes the long-term nature of the dividend and the management team. Dividend yield of 6.4%.

(Market Call Minute.) He would prefer Pembina (PPL-T). You can hold this for yield and a little bit of growth.

(Market Call Minute.) Great dividend yield.

Stock has come down fairly significantly from the high $40s. Recently did an equity financing which he participated in and is happy with, because it bolsters the balance sheet. Pays a good dividend yield of over 6%.

(Market Call Minute.) You hold this for the yield. This has a little power and a little gas.

(Market Call Minute.) A lot of the energy infrastructure companies are making a great comeback. This has been a laggard off the bottom and has made very little progress versus the market. He would prefer something like a TransCanada Pipe (TRP-T), and Enbridge (ENB-T) or even a Pembina (PPL-T).

This is languishing, in part because investors believe that it is going to have to raise more capital in order to continue to fund its projects and continue to grow its products. Its power contracts in California are somewhat worrisome.

Its peers are the pipeline companies and utilities, because this is a company that is kind of half and half. Has underperformed the other pipes in the last year or so. Their power side was hurt by low power prices, primarily in Alberta. The CapX program is not as well contracted as some of the other pipeline companies. That has hurt them. They are going to have good cash flow growth this year, of almost 20%. Have 3 Hydro projects coming on in BC. Also, have a gas processing plant coming on. They have a couple of gas processing plant proposals as well as a power plant proposal in California. Good earnings growth this year. He expects a dividend increase this year of 5%-6%. Dividend yield of 6.47%.

Has a small Short on this. He looks for 2 primary things in stocks. Valuation and price momentum. Valuation tells you that it is a good time to Buy from a price perspective. Price momentum tells you that the timing is right. Unfortunately, this company has both those things going against it. Views 17X EBITDA as being expensive. Doesn’t see a huge amount of downside as it has a good support of the yield and they are doing the right thing to repair the balance sheet. There are better opportunities elsewhere.

From a seasonal perspective, this tends to attribute most of its tendencies to the utility sector, which tends to do well in the summer. From June until about the end of August, the stock gains about an average of 5%. Technically it is not too bad. It essentially has been consolidating. Since a short-term low in May, it is trying to carve out a higher low. Technical resistance is at about $33, and if it can break above that, that could imply significant strength ahead. Watch for it to break above the 200-day average and $33.