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AltaGas Ltd T.ALA

Alternate Symbol(s):  ATGFF | T.ALA.PR.A | ATGPF | T.ALA.PR.B | T.ALA.PR.G | ATGAF

AltaGas Ltd. is a Canada-based energy infrastructure company that connects natural gas and natural gas liquids (NGLs) to domestic and global markets. The Company’s segments include Utilities and Midstream. Its Utilities segment owns and operates franchised, rate-regulated natural gas distribution and storage utilities, which includes four utilities that operate across five United States jurisdictions. It Utilities segment also includes storage facilities and contracts for interstate natural gas transportation and storage services, as well as the affiliated retail energy marketing business. Its Midstream segment includes global exports, which includes its two LPG export terminals; natural gas gathering and extraction, and fractionation and liquids handling. Its Midstream segment also consists of natural gas and NGL marketing business, domestic logistics, trucking and rail terminals, and liquid storage capability. Its subsidiaries include Wrangler 1 LLC, WGL Holdings, Inc. and others.


TSX:ALA - Post by User

Bullboard Posts
Comment by mayorkghon Dec 01, 2018 12:45pm
255 Views
Post# 29049479

RE:RE:Some thoughts on realistic dividend reflects CO thinking

RE:RE:Some thoughts on realistic dividend reflects CO thinkingRBC estimates a 40% dividend cut. Here is an extract from their analysis:  "Investment Rationale We expect the shares of AltaGas to perform in line with its peers for the following reasons:We believe the market is looking for clarity on key funding and dividend policy issues. We left the Q3/18 conference call with the impression that a strategic cut in the dividend was being telegraphed. While we have previously noted that the payout ratio is high, we felt that the company had the cash flow to sustain, and even grow, the dividend. That being said, we think that a strategic dividend cut that "leaves no doubt" may be the best path forward. Our dividend forecast incorporates an 40% cut to a new annualized rate of $1.32/share.California power also drives uncertainty. We believe that investors are taking a cautious approach to the potential cash flows from the California facilities when the contracts expire, particularly given negative surprises for post-contractual cash flows for other Canadian stocks (i.e., not AltaGas) as well as the relatively low valuation for the sale of the San Joaquin assets.Liquidity is in good shape, but the credit rating overhang could cap upside in the stock. AltaGas continues to have ample liquidity via its bank lines and capital markets access to provide funding for the growth capital program and any acquisitions. However, with S&P's "negative outlook" with respect to the BBB rating, we believe that upside in the stock may be capped until S&P removes the "negative outlook". The WGL transaction and related financing has the potential to improve the credit profile.Potential catalysts: New contracted infrastructure projects, particularly on the gas side in Western Canada; strategic and accretive acquisitions; material asset monetizations and higher-than-expected frac spreads.Key risks: Frac spreads or gas volumes that meaningfully differ from our forecast; projects/acquisitions that fail to gain the confidence of investors; the ability to fully finance the WGL acquisition; asset sale proceeds that materially differ from our assumptions; a credit rating downgrade or dilutive actions to maintain a certain credit rating; and natural gas prices and drilling trends in Western Canada."  
Bullboard Posts