Altagas Ltd (ALA.TO)

A core holding that he loves to own, but this is also one he is waiting to get into. Got stopped out last fall. His concern is the Alberta economy. Doesn’t feel the time is right yet.

The whole utility infrastructure sector is being hit because of the price of oil. Doesn’t think investors realize this isn’t about price, it is about volume. If oil prices stay low for an extended period of time, the volume will eventually decline. Raised its dividend last year. It is priced very attractively. The dividend is nice and is fairly secure. A pretty good investment right now, but you have to be able to stand this crazy energy cycle. Dividend yield of about 7%.

(A Top Pick Dec 2/14. Down 20.29%.) Has a wonderful yield that he can see continuing to go up. This has been put into the energy sector, but it is as much a utility as an energy stock. Have hydro plants they have just brought into BC. Very stable revenue, very stable cash flow and a very stable dividend. The 6% dividend looks awfully good today.

The last 6 months has been brutal for the stock, but it is now getting closer to FMV. His model price is $27.28, a 7% downside from the current price. It probably pulls back to $24.24. Look for further compression on the price. If it got to $24.25 it would look like a pretty good deal to him.

A utility, but is suffering from being in Alberta. They are involved in the potential export of LNG. Good management. Feels the dividend is safe.

Infrastructure still has to get built, but they are able to do little pieces here and there and it is a great little business that can grow along. Thinks that business can incrementally grow over time. Dividend yield of 6.3%.

6.2% yield. Infrastructure company. Good growth projects. They have a small exposure to Alberta power. It is a coal powered plant, but it contributes nothing to their earnings. It is well managed and he does not understand the short thesis. He continues to buy it.

This is a Short for him based on its valuation characteristics. It is a utility like yielding stock that had a large flow of funds into them because they were defensive and viewed as being safe. Beyond that there is not much beyond the yield that supports the valuation.

(A Top Pick Jan 16/15. Down 15.18%.) This is really a hybrid utility/midstream type company. About two thirds is a contracted utility like business; power generation or gas/electric distribution or “take or pay” contracts for their midstream. A small portion of their business has commodity exposure, but that tends to shrink over time. This is about sustainability of the cash flow streams. Good disciplined management. Less than 15% of their business has commodity price exposure. 5.98% dividend yield.

They are bottom shopping and for a good reason. He is concerned about what he is reading about infrastructure in gas and in particular LNG. He was very bullish on LNG going back 10 years. Now nothing has happened on the west coast, however.

Owned this in the past and pretty much keeps an eye on it. Made acquisitions of 3 natural gas fired power plants in Northern California. These will add some diversification. Management has done an excellent job of growing the company and of growing the dividend. Thinks this will continue down the road. It is on his radar screen and ranks very well in his process.

Considers this a utility as it has a 3^rd gas distribution, a 3^rd electrical power generation and a 3^rd of midstream assets. Very stable earnings and revenue going forward. If you are looking to get a rebound in energy without having to take too much of a downside from commodity pricing, this is one area that you could put money to work. It is one of the companies that is going to perform the best when we start to see some of the LNG finally come to fruition in Canada.

Comparing it to junior producers, it has held in well. It has been expensive and he has never been high on buying this. He would be cautious in this group, as he thinks there is more downside to go. Dividend yield of 5.4%.

This stock, along with Keyera (KEY-T) and Pembina (PPL-T), has not performed well. The one difference is that this company really is more of a stable cash flowing entity. They have significant Run of River projects and are going to materially increase EBITDA, in fact double it, within the next few years. It is fully contracted and fully funded. The Run of River projects are underpinned by a long 20-25 year power purchase agreements with governments.

Likes it. They brought on 2 hydro electric projects recently and the cash flow has help them. They are well positioned longer term. A significant dividend yield.