Altagas Ltd (ALA.TO) - Page 2
Page 2 of 4 FirstFirst 1234 LastLast
Results 11 to 20 of 37

Thread: Altagas Ltd (ALA.TO)

  1. #11
    Junior Member
    Join Date
    Apr 2016
    Posts
    18
    I like it at this level. It rose and fell hard with the price of oil since summer 2014. Then the dividend was just above 3 %. Now at more than 6 % it is pretty good for income purposes. Unless there is a major collapse of the producers, its midstream business won't be very sensitive to the commodity prices (it's just 1/3 of the business in any case). It's LNG consortium project seems dead, but it's LPG export terminal probably will proceed. It's power generation business and gas utilities business seem to be doing fine.


  2. #12
    Senior Member
    Join Date
    Jun 2009
    Location
    Okanagan Valley
    Posts
    3,315
    They have been deathly silent on taking equity in mostly gas producers as partial payment for midstream processing contracts. I have not read their latest quarterly financials in detail but the only thing they mention in the summary release is a $150 million investment in Petrogas preferred shares. What the hell are they doing investing in customer equity? It seems a sneaky way to say they have contracts in place for plant processing capacity but if they are using shareholder money to invest in someone like Petrogas just so presumably Petrogas can pay their processing bills, is that not taking money out of the left pocket to put in the right pocket?

    I am a shareholder of ALA but I am beginning to be alarmed at these incestuous? relationships. Gotta dig further.

  3. #13
    Senior Member
    Join Date
    Sep 2011
    Location
    British Columbia
    Posts
    1,891
    I've acquired a position in ALA this year. They actually own 1/3rd equity of Petrogas, which is part of their Gas segment. They also now own these preferred shares, and also provide a $100M line of credit to them. Petrogas is pretty heavy into NGL, especially propane, and it is a part of their strategy to export propane gas from the Ridley terminal in Prince Rupert. They have been publicly disclosing all equity that they have been getting from Petrogas as they increase their stake by a little bit ever year. The whole investment dates back to 2013, see here, when they increased their stake to 33% from 25%. The good news is that Petrogas is making money (by my estimates, $40-50M a year), so it's definitely not throwing good money after bad.

    ALA management have extremely high credibility which is one of the key reasons I am onboard. They also maintain investment grade ratings and are constantly under scrutiny, and having their status reiterated, by the investment agencies. If the Ridley terminal works out, it is going to make a lot of money and they'll need Petrogas to supply it (they already have a MOU for 50% of the capacity). Investment decision is expected this year, and no pipelines nor new land development is required (already on an existing export facility). Of course, they also have numerous other growth activities. Definitely a long term hold for me - few quality utilities with a 6%+ yield.
    Last edited by doctrine; 2016-07-25 at 05:37 PM.

  4. Remove Advertisements
    CanadianMoneyForum.com
    Advertisements
     

  5. #14
    Senior Member
    Join Date
    Sep 2015
    Location
    Saskatchewan
    Posts
    801
    I've owned this stock for quite a while. How worried should I be about the 135:1 P/E?

  6. #15
    Senior Member
    Join Date
    Feb 2014
    Location
    Ontario
    Posts
    715
    That and the 840% dividend payout ratio.

  7. #16
    Senior Member
    Join Date
    Sep 2011
    Location
    British Columbia
    Posts
    1,891
    I wouldn't be worried. They have 20% underlying growth this year with some big projects coming online and are covering the dividend out of funds from operations with about an 80% payout ratio, which will continue to drop as capital is deployed. Now trading at a year high with a 6 year steady history of dividend increases. Very well run company.

  8. #17
    Junior Member
    Join Date
    Apr 2016
    Posts
    18
    Gardner and TomB19:

    Free cash flow is what makes the wheels go around for utilities, not "earnings". Depreciation is on your side to lower earnings and taxation.

  9. #18
    Senior Member
    Join Date
    Jun 2016
    Posts
    1,302
    TD Direct Investing would like to inform you that the following New Issue has just been announced.

    AltaGas Ltd. - Subscription Receipts

    Short Description: Treasury Offering of Subscription Receipts via Bought Deal
    Price: $31.00 CDN
    Settlement: On or about February 3, 2017.

  10. #19
    Senior Member
    Join Date
    Sep 2011
    Location
    British Columbia
    Posts
    1,891
    This is a big acquisition. It's also very positive. An excellent price to get in at compared to most utilities, especially pipelines like TRP which are approaching nosebleed level. $31 offering is a 6.7% yield with 8-10% growth out five years in primarily regulated industries. Extremely attractive.

  11. #20
    Senior Member
    Join Date
    Jun 2016
    Posts
    1,302
    Quote Originally Posted by doctrine View Post
    This is a big acquisition. It's also very positive. An excellent price to get in at compared to most utilities, especially pipelines like TRP which are approaching nosebleed level. $31 offering is a 6.7% yield with 8-10% growth out five years in primarily regulated industries. Extremely attractive.
    I have similar opinion... however, CIBC IE still didn't published this mew offer . (I got alert email from TDW that was set when I was TD client). Curious what will be the minimum lot, as I plan to buy it into TFSA using new contribution. Was debating to buy or not new issue of SMU.UN for $6.20, but anyways it got sold out).


Page 2 of 4 FirstFirst 1234 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •