Tag Archives: TSX:ALA

Don’t Be Spooked By This Big Dividend

This first appeared as 1 of 3 top Canadian dividend ideas for October 2017 in the Seeking Alpha Marketplace service DGI Across North America.

Altagas’s (TSX:ALA) share price surely looks like it’s turning around after management hiked its dividend for December. Specifically, the dividend increase was nearly 4.3%. That doesn’t sound much until you hear that the company now offers a ~7.5% yield.

Don’t be spooked by Altagas’s big yield, though.

halloween

Is Altagas’s Dividend Safe?

The company is working on a big acquisition, which requires lots of resources. It also plans to sell some of its assets to fund the acquisition. By investing in internal projects, at least some of the lost cash flow will be replenished.

Altagas is devoted to paying out 50-60% of its cash flow as the dividend. Moreover, the dividend is largely backed by long-term contracted cash flow. Altagas’s investment-grade balance sheet also helps.

Altogether, Altagas should be able to maintain its dividend.

Read More

Industry Pullback: Buying Opportunities In Dividend Growth Stocks

This article first appeared in the Seeking Alpha Marketplace service DGI Across North America.

Six dividend growth stocks from the energy infrastructure space are discussed. They offer yields of 4.6-7.5% and double-digit price appreciation potential in the near term.

The energy infrastructure stocks have pulled back meaningfully due more or less to the lower commodity prices. These stocks are safer and less volatile than energy stocks, which have direct exposure to lower-priced commodities.

For income investors, it is a good opportunity to consider the energy infrastructure stocks, which tend to grow their dividends over time.

oil refinery

Enbridge Inc. (TSX:ENB)(NYSE:ENB)

Enbridge is the biggest company with the largest scale. Here’s how the company looks like after combining with Spectra Energy Corp. If you’re looking for safety and strong dividend growth, Enbridge is your stock.

Enbridge is ~15% below its 52-week high of ~C$59 per share and ~1.8% higher than its 52-week low of C$49.20 per share.

Enbridge is a diversified business. It produces and processes natural gas, has a complex pipeline system that transports liquids and gas across North America, and generates power with wind, solar, and geothermal facilities.

The company has increased its dividend per share (“DPS”) for 21 consecutive years. In the last 20 years, it has compounded its DPS by 11.2% per year.

Source: Enbridge website

Through 2024, Enbridge expects to hike its DPS by 10-12% per year. Currently, it’s a good time to buy some shares at an attractive yield of ~4.9%.

The street consensus at Thomson Reuters [TSX:TRI](NYSE:TRI) has a mean 12-month target of C$62.30 on the stock, which represents ~24% upside potential in the near term.

F.A.S.T. Graphs also show that Enbridge is undervalued as a multi-year investment as its cash flow per share growth is estimated to grow at a double-digit rate in 2018 and 2019.

Read More

Altagas Ltd. yields 6.7%. Is It a Buy, Hold, or Sell?

AltaGas Ltd. (TSX:ALA) is expected to acquire WGL Holdings, Inc. (NYSE:WGL) by the end of the second quarter of 2018. AltaGas shares reacted by declining 6.4% and the stock now yields 6.7%.

Should you buy, hold, or sell AltaGas? What kind of returns can you expect from an investment today?

The acquisition still require approvals from WGL shareholders, and some regulatory and governmental bodies before it can be closed.

Why is WGL Holdings a fitting acquisition for AltaGas?

WGL is a holding company with almost 170 years of history and is awarded a high S&P credit rating of A+. Primarily, it consists of Washington Gas and Hampshire Gas, which are regulated gas utilities that represent roughly 77% of WGL’s assets.

WGL will immediately double AltaGas’s rate base and triple its customers in its utility segment and increase its gross capacity to about 1,900 MW for its power segment.

Additionally, WGL provides about C$925 million of investment opportunities in the midstream segment, on top of the C$1.2 billion AltaGas originally planned, through 2019, totaling C$2.1 billion of capital investments.

Read More