RE:observations re latest ALA presentationThe part I liked was:
After paying the dividend they still have 680 million of free cashflow. They payout currently 270 million. Currently today that makes their payout ratio 39%. Information on slide 13. They have a 60% buffer to where they can decide keep the cash or raise the dividend. A 6-8% raise per year is nothing when your sitting with 60% free cashflow retension. On top of that, the information doesn't take into accounf the DRIP. When the DRIP is taken into account the amount they payout is drastically reduce by as much as 60%.
It wont be long until anaylsts start seeing this if they haven't already. It's all there slapping you in the face. 4.2x free cashflow valuation when every.... every company in the space trades at over 8x free cashflow. On an EPS basis a 50% discount as well. The payout ratio 50% discount to peers.
Another note I made was slide 20 Ridley island expected in service Q1 2019 This was previously thought to be the end of Q2.
"40,000 bbls/d of export capacity expected in service Q1 2019"
Also looks like as of now they probably have the contract in place for the full quota as they were already in negotiations in 2018.
"Supply Kelt and Black Swan agreements in addition to other initiatives provide increased supply and AltaGas expects to achieve the initial 40,000 bbls/d supply target Offtake Astomos Energy Corporation to purchase 50% of the propane shipped from the facility Commercial agreements to secure the remaining off-take commitments are currently under negotiation and are expected to be completed by the end of 2018"
Slide 26
For WGL being such a bad decision why are WGL's assets the highest returning assets in the whole company right now. On top of that they have and are the source the most growth in the company. 50% of new money new capex in going toward WGL utilities. This is due to them being the most stable ( having a guaranteed return ) and also having the highest return. Every dollar Altagas puts toward WGL utiliy assets they get $1.10 back and that is guaranteed.