Altagas

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Hi there, Just wanted to ask your thoughtson Alta gas. I have owned it since early 2018, and since then they cut their dividend, however I actually like the stock and think they are pretty solid. I do think that they bit off more than they could chew with their large US aquisition but since then seem to be doing well. Also I would hope they will increase their dividend in the next while.

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Asked on September 24, 2020 12:59 pm
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Thanks Mat. Good assessment. On a side note, I think they could / would benefit from a name rebrand as they are a different company than pre purchase of WGL and they also have Ripet online now as well.

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Posted by Ian McHardy
Answered on September 25, 2020 6:15 am
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Hi there,

They have certainly been performing quite well since the dividend cut. I, like you, have owned the company since around early 2018. I also like the company, but this environment makes it very difficult. It is down this year (-17%), but still outperforming the TSX Energy Index (-52%) in a big way.

I'm content with holding the company as I do see growth ahead, however I must tempter my expectations given all the negativity in the sector. As a midstream however, it is better positioned to generate cash flows despite low commodity prices. High, single-digit earnings growth is the expectation over the next few years. Nothing earth-shattering, but stable and consistent growth.

In terms of dividend growth - don't expect much here. They already yield over 5% and there is no dire urgency to raise given the strong income it already provides. Others in the industry have also not raised, despite their 'expected raise' date coming due. Until there is more certainty in the market I'd expect the dividend to remain steady.

Mat

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Posted by Mathieu Litalien
Answered on September 24, 2020 6:29 pm