AltaGas Ltd T.ALA

A thought

[Johnwith30years]

Lots of folk ar elooking at the past 52 week high and seeing we hav ejust exceeded it.  But I would use 2020 precovid as a good starting point The high last January was about $22.76  and that was before a dividend increase and the growth now being demonstrated and lower debt rates.  I wrote some time ago:  Does anyone seriously not expect to see ALA exceed that 22.76 rate this year.

Our recent rise is only the beginning  so again I would advise it is not too late to add to or take a full position. The only thing dragging me back a bit these days is the option protection I had on part of my position for extra income but I have removed most of that now eithe rby rolling up and out or by removing altogether.   There is more to come here.  Just when is  the question but  sooner rather thanlater for a further nice bump IMO.

[bossu]

Hey Jonney :What would be the % of your total holding would you invest in  ALA ? At one point you have to be'' resonable'' 

[Johnwith30years]

Very hard to answer without knowing your risk profile or target for total percentage annual return.  Also need to know what access you have to additional funds if you get caught in a longer holding period than you bargained for and whether you are using leverage.  For example when the dividend is 5% and you can borrow at 3% that makes a difference.  I have been caught over the years

[bossu]

Thank you Johnny, What you say is that  the investor has to consider many factors.  I understand that the investor profile make a big difference but at some point as in the ALA case the futur look promising but there is a point where ''cash allocation ''in one stock is a self decision .

[Bushman3333]

You have to take to considerations  that warm winter, also a weaker US Dollar, that will be factor revenu wise. 

[Johnwith30years]

Comments about a weaker US dollar:  I found it informative in Randy's remarls or maybe the CFO that they have debt denominated US dollars as well so the revenue offsets the debt costs without too much hit to the bottom line. I think he said a five cent drop impacted ALA negatively by $35 million in EBITDA  or about .12.5 cents per share  but they have taken into account 

[bossu]

You are absolutely wright about the reduction in revenue because of the weakening of the $ US and this represent probably $ 7M per quarter for now. But this has been taken into account when they made the budget for 2021. And this weakening could reverse and the pendulum goes the other way.

[ol_griz]

Wow, John, you just channeled by thoughts and my situation almost exactly!  Good post that should really get your questioner thinking (and cautiously).

[rustyblades]

I think in January 2020, people were expecting more than the piddly 4% dividend increase we received in December. At the current yield and tempered expectations for dividend growth it's difficult to see the share price going too much higher in the near term. Who knows, ALA could be plan B for BAM if the IPL bid fails.

[Capharnaum]

ALA would be worth over $21 even if they didn't pay a dividend. I like dividends as it usually shows that companies have good steady cashflows. However, in general, the higher the dividend, the less upside to a raise in share price, as cash goes out instead of being reinvested.

[Johnwith30years]

I think that ALA buyers will purchase until the dividend reaches just 4%  as the year goes by. That takes the stock to  $24.00 and if they did not raise the dividend by the time it drops to 4% I do not think there would be new buyers unless they spotted very sharp growth ahead.  But then I am expecting a dividend increase for several probably many years ahead. In 4 years at 4

[jeffpei]

Agree John. Will take patience, but if those of us who have held through the past 2 years continue to be patient we will be rewarded. I for one will continue to sleep at night and collect my monthly RIF dividend from ALA- which is by far my top holding @24%. Cheers all.

[Johnwith30years]

Yes 15-16 dollar averages are beginning to look rather nice.  As I said at least until $24  I'll hold the entire amount I have accumulated.  GL