Strong organic growth visibility and continued deleveraging Strong organic growth visibility and continued deleveraging point to a solid 2022 We believe AltaGas provides investors with an attractive (and growing) dividend, along with compelling exposure to a commodity price recovery. In our view, the company should also benefit from ongoing deleveraging, which could be accelerated via divestiture. AltaGas generates ~50% of its EBITDA from its Utility segment, which we believe is positioned to realize high single-digit rate base growth through 2025 as the company works toward its allowable ROE thresholds. AltaGas’ Midstream segment enjoys first-mover advantage in west coast NGL export, along with a strong core portfolio of processing assets in the heart of the BC Montney. We also believe this segment remains well positioned over the longer term as LNG Canada moves closer to commissioning. On December 15 AltaGas will host an investor day and unveil its 2022 outlook and capital plan. Based on the company’s recent 6% dividend increase, we expect management to present a constructive outlook for the coming year. We note that YTD shares of AltaGas have delivered a total return of ~39%. Highlights • AltaGas retains strong growth visibility in its Utility segment through 2025, with more than $1.0 billion in ARP spending opportunities that provide for accelerated returns and support high single-digit rate base growth. Management also remains focused on active rate case filings and cost management as the company works toward its allowable ROE thresholds. We believe the need to replace aging infrastructure through much of the US is supporting relatively attractive regulated returns in many jurisdictions. • In our view, AltaGas remains well positioned for continued volume growth in the BC Montney with unused capacity in its core portfolio of gas processing and fractionation assets. We also believe the company is well positioned longer term as Coastal GasLink is placed into service in support of LNG Canada. AltaGas is also benefitting from ongoing E&P consolidation in western Canada, which is improving the relative creditworthiness and financial capacity of its counterparties. • Continued deleveraging remains a priority for management, with the company targeting a sub-5x debt/EBITDA capital structure. We continue to believe this is an attainable goal in 2022E but note an MVP divestiture could accelerate this process and potentially represent a credit-positive event for the company. • On December 15, AltaGas will host an investor day and unveil its 2022 outlook and capital plan. Ahead of this event, AltaGas recently announced a 6% common share dividend increase to ($1.06/sh annually) along with the transition from a monthly to a quarterly payment schedule. We believe this dividend increase provides a positive preview for AltaGas’ investor day while underscoring the company’s ability to support high-quality dividend growth longer term. Valuation and Recommendation We rate AltaGas a BUY with a $32 target, based on a DCF valuation that equates to a 10.5x EV/EBITDA multiple applied to our 2022 estimates.