AltaGas Ltd T.ALA

RBC

[retiredcf]

RBC Capital Markets analyst Maurice Choy identifies relative “safer havens” in the yield-heavy energy infrastructure sector,

“Canadian Energy Infrastructure stocks provide a good range of options for investors depending on their underlying scenarios … Midstream’s high degree of cash flows that are under rate-regulation or take-or-pay arrangements mean investors seeking to maintain exposure to Canadian Energy can find certain Midstream stocks to be “safer havens”, not to mention the roughly 6-per-cent dividend yield on offer while waiting for clarity to emerge. Moreover, many Midstream companies have meaningful U.S. assets and attractive growth options as well. If, however, a perception of a materially weaker Canadian economy takes hold in the market (i.e., macro impact from any tariffs/retaliatory actions or political uncertainty), we believe the Utilities provide investors solid defensive exposure … AltaGas seems to have multiple ways to win. Tariffs on Canadian imports into the U.S. should lead to a better customer appreciation for AltaGas’ LPG export terminals, consisting of two operational assets today, with a third on the way that has multi-phase expansion potential. Meanwhile, its U.S. gas utilities should benefit from a stronger U.S. dollar (sans hedges), and the potential sale of its 10 per cent stake in MVP should position AltaGas closer to its long-term debt/EBITDA target … Enbridge , South Bow , and TC Energy have roughly 90 per cent or more rate-regulated/take-or-pay cash flows, with direct exposure to the U.S”