WGL should bring AltaGas many growth opportunities
That said, millennials are among those investors that have the time and patience to wait it out. To capture a stock that has long-term value when it is in the throes of uncertainty, thereby buying it at a very compelling price.
Now utilities aren’t what we normally think of when we think of uncertainty, but AltaGas Ltd (TSX:ALA) has changed this with its acquisition of WGL in the U.S. and the uncertainties related to its closing and financing.
But that is all history ….. mostly.
The deal has closed, a new CEO with plenty of experience in the U.S. natural gas industry was named, divestitures are progressing, and the company is prepared to tackle its heavily indebted balance sheet.
The one last issue that is still outstanding is the dividend potentially being cut.
AltaGas stock is trading at half of beginning of the year levels with a dividend yield of almost 15%.
Pretty telling.
We are awaiting the company’s official strategic and dividend plan, which should be forthcoming this year.
What we do know is that with the IPO of AltaGas Canada Inc., which is 45% owned by AltaGas and consists of Canadian regulated natural gas utility and renewable power assets, this leaves AltaGas to focus on gas and US utilities.
WGL’s high-quality assets and market position should bring AltaGas many growth opportunities as well as significant earnings and cash flow accretion.