AltaGas Services Ltd. (ALA-T)

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northbynorthwest
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Re: AltaGas Services Ltd. (ALA-T)

Post by northbynorthwest » 15 Nov 2015 11:54

JaydoubleU wrote:I am having a look at this company and wondering if it's worth buying. I like that it's down 24% YTD, alongside a 1-year dividend growth rate of 12% and a 5-yr rate of 8.45%. It seems quite diversified between gas transmission, utilities, and power, including renewable power. The P/E of 59 is a bit frightening, mind you.

I am wondering if it can be compared to TRP at all, or are they completely different fish. (?)

Which of these appears the best buy right now, TRP or ALA? (thinking out loud)
If we're talking ALA comparators, CU is the one that comes to mind for me as a possibly better fit than TRP.
Also underwater YTD at -17%, so some excitement there for those who thought it conservative and boring. Good dividend grower albeit at a much lower 3.5% yield.
Also presumably in Altared's group of hurtin' Albertan power producers.
P/E looks richer than TRP, so maybe TRP is the better choice post-Keystone.
I'm considering adding in this area. Used to own TRP but exited > $60 in sept 2014.
Have a half position in CU that's 5% underwater, and enough ALA for now.

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Re: AltaGas Services Ltd. (ALA-T)

Post by AltaRed » 21 Apr 2016 00:20

1Q16 EBITDA and cash flow miss, particularly on a per share basis. Should not be a surprise since power rates in AB are down and fractionation spreads are down. Less of an issue was also warm weather in the Pacific Northwest. The good news is the Sundance contract is behind them and they will have additional revenue generating facilities on stream later this year. I had hoped for 'flat' results.

What I don't like is them taking equity in some of these smaller companies as part of the payment of the sale of non-core facilities to them. Either they have a lot of faith in some of these entities, or they are desparate to unload these non-core facilities. First Painted Pony (not a bad choice) and now some POS called Tidewater? Time will tell.
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Re: AltaGas Services Ltd. (ALA-T)

Post by JaydoubleU » 21 Apr 2016 20:12

Funny you should bring this one up. I've been watching it the last few days. I bought a lot of energy infrastructure late last year, and ALA is the one that has really lagged.

Two things that I note: 1) David Cornhill stepped down as CEO on April 15th. Cornhill was a great leader, and I wonder if and how the company may change without his leadership. 2) the company expects to deliver 20% growth in EBITDA in 2016 vs 2015. I am wondering if this is already baked into the price, or if investors are being too pessimistic because of the last weak quarter.

Dividend growth was strong last year at almost 12%. I am wondering if there will be any this year. Some BNN talking heads (eg David Cockfield) even question if the current yield is sustainable.

At any rate, ALA is on the watchlist for possible accumulation.

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Re: AltaGas Services Ltd. (ALA-T)

Post by AltaRed » 21 Apr 2016 23:53

I think ALA valuations/multiples have come back into line to where they should be for current results. They deserved the circa 5% stock price drop over the past few days. The market is now likely waiting for a 'show me' when it comes to their 2016 20% EBITDA growth projections. While they should have the ability to pull it off and get to maybe a $35 stock price at the end of the year, they are going to have to deliver.
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Re: AltaGas Services Ltd. (ALA-T)

Post by Arby » 15 Jul 2016 15:56

For the past 2 months my dividends from AltaGas have been slightly higher than expected. The dividend is supposed to be $0.165 per month, but I've been receiving $0.1667 in June and July. Has anyone else noticed a similar increase, and do you know why?

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Re: AltaGas Services Ltd. (ALA-T)

Post by pmj » 15 Jul 2016 16:01

Arby wrote:For the past 2 months my dividends from AltaGas have been slightly higher than expected. The dividend is supposed to be $0.165 per month, but I've been receiving $0.1667 in June and July. Has anyone else noticed a similar increase, and do you know why?
http://www.altagas.ca/invest/share-information/drip - does the note re 101% cash payment apply?
commencing with the dividend payable to shareholders of record on May 25, 2016
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Re: AltaGas Services Ltd. (ALA-T)

Post by Arby » 15 Jul 2016 17:57

pmj wrote:...does the note re 101% cash payment apply?
Yes, that's the answer to my question. Thanks. I forgot that I enrolled in option 2 of the new DRIP plan. With Option 2, instead of getting new DRIP shares, you get an increased dividend of 101% of the regular dividend. That seemed like a no-brainer to me. I can't understand why every shareholder wouldn't enroll in option 2.

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Re: AltaGas Services Ltd. (ALA-T)

Post by 2 yen » 12 Jan 2017 16:49

http://finance.yahoo.com/news/canadas-a ... 44959.html

What does this possible merger mean for ALA shareholders?

2 yen

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Re: AltaGas Services Ltd. (ALA-T)

Post by AltaRed » 12 Jan 2017 16:59

No details and none likely for a bit.... talks are ongoing. This seems a wierd fit given WGL is on the East Coast. It would make more sense if it was Washington State.
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Re: AltaGas Services Ltd. (ALA-T)

Post by JaydoubleU » 12 Jan 2017 17:04

What does this possible merger mean for ALA shareholders?
At a glance, I'd say it means more debt and equity :roll:

But I'm not bothered by that so long as the company has a clear vision. I'm waiting for a press release from ALA It's a relatively large takeover.

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Re: AltaGas Services Ltd. (ALA-T)

Post by AltaRed » 12 Jan 2017 17:11

I've just put ALA on my Watch List as a sale candidate if there is a pop in price*. Just not interested in DC, MD and NH gas businesses. Been there, lived there, no thank you.

* For the moment, ALA shareholders feel like I do.
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Re: AltaGas Services Ltd. (ALA-T)

Post by JaydoubleU » 12 Jan 2017 17:12

And here it is, the vision clarified!
While we are in discussions regarding a potential transaction with a third party, no agreement has been reached and there is no assurance that these discussions will continue or that any transaction will be agreed upon. Until such time as it is appropriate to make a public announcement on any potential transaction, should one occur, AltaGas will not comment further on this matter. Any announcement regarding a potential transaction will be disclosed in accordance with applicable legal and regulatory requirements.
I guess we'll just have to wait and see,

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Re: AltaGas Services Ltd. (ALA-T)

Post by 2 yen » 13 Jan 2017 09:55

JaydoubleU wrote:And here it is, the vision clarified!
While we are in discussions regarding a potential transaction with a third party, no agreement has been reached and there is no assurance that these discussions will continue or that any transaction will be agreed upon. Until such time as it is appropriate to make a public announcement on any potential transaction, should one occur, AltaGas will not comment further on this matter. Any announcement regarding a potential transaction will be disclosed in accordance with applicable legal and regulatory requirements.
I guess we'll just have to wait and see,
Getting smacked this a.m. Market obviously is not thrilled by this possible 'merger'.

2 yen

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Re: AltaGas Services Ltd. (ALA-T)

Post by Descartes » 13 Jan 2017 09:58

Financial Post says:
While such a deal would likely be accretive to earnings for AltaGas, the equity required could serve to put downward pressure on the stock.

WGL is a utility holding company that serves the Washington, D.C. region. It owns more than US$6 billion of assets in areas like retail energy marketing, commercial energy systems, and the regulated utility business.

Macquarie analyst David Noseworthy noted that WGL has a slightly better earnings per share growth profile between 2016 and 2020 than AltaGas
..
The analyst estimates that AltaGas would need as much as $5.6 billion of additional equity to finance the deal, depending on the takeout premium and the percentage of equity financing involved.
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Re: AltaGas Services Ltd. (ALA-T)

Post by jay » 13 Jan 2017 10:11

It dipped 5% this morning! don't understand the selling pressure and why sellers assume the deal would value AltaGas at these levels. I'm actually looking to add if it dips below $30.

I think there are good odds this should be at $35+ in no time, deal or no deal.

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Re: AltaGas Services Ltd. (ALA-T)

Post by AltaRed » 13 Jan 2017 10:44

My take is ALA shareholders did not buy into the company for it to take such a dramatic shift in strategic direction (a staid old gas utility on the east coast). They bought it primarily to be: 1) a NG and midstream processor in the Montney, 2) a pipeline company,3) a potential supplier to LNG projects with equity in companies like Painted Pony, and 4) as an IPP. If this deal ever happens, ALA likely has deceived, if not angered, its existing shareholders.
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Re: AltaGas Services Ltd. (ALA-T)

Post by jay » 13 Jan 2017 11:26

AltaRed wrote:My take is ALA shareholders did not buy into the company for it to take such a dramatic shift in strategic direction (a staid old gas utility on the east coast). They bought it primarily to be: 1) a NG and midstream processor in the Montney, 2) a pipeline company,3) a potential supplier to LNG projects with equity in companies like Painted Pony, and 4) as an IPP. If this deal ever happens, ALA likely has deceived, if not angered, its existing shareholders.
Good insight @Alta as usual and I think you are right. In any case, I will be looking to add if it drops close to the 52-week lows ($27'sh) but I will also be looking to exit if it reaches the 52-week highs ($35'sh)

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Re: AltaGas Services Ltd. (ALA-T)

Post by bpither » 13 Jan 2017 13:05

If you bought in 2010 you'd still be up 66% plus the dividend. That's pretty darn good and better than buying a "safer" preferred share or bond for those of us who are well retired.

If you're purely after quick capital gains I refer to a Ben Graham quote from the end of Chapter 8 in "The Intelligent Investor "“It is virtually impossible to make worthwhile predictions about the price movement of stocks ..." I can't predict how the high frequency trader or fickle investor is going to react to news and rumors. Or if a new credit crisis a la 2008 is going to happen tomorrow. That's why I pay closer attention to dividend growth and payout ratios.

Washington Gas has been raising their dividend since 1977; Altagas since becoming a corporation in 2010 after the initial cut in their Income Trust distribution. I'm after the rising income, and there is a terrific chance this shall continue ... but I would wait to buy until after the inevitable equity offering as the market will be messy for a bit. It's definitely not cheap enough for my taste but then again there isn't much out there that I find appealing

So far after 30 years of investing dividend growth has mostly worked for me through all variances of the business cycle.
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Re: AltaGas Services Ltd. (ALA-T)

Post by brad911 » 13 Jan 2017 13:46

2 yen wrote:Getting smacked this a.m. Market obviously is not thrilled by this possible 'merger'. [2 yen
The market is just pricing in the potential dilution factors and cost in a situation where that cost isn't yet known but can only be predicted.

I am with Altared though...this isn't really why I'm a holder of the company (have been since the trust days). If this moves forward I will have to re-evaluate my allocation and may exit. I bought it for the processing and pipeline. I am already content with my utility exposure so this may have to go.
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Re: AltaGas Services Ltd. (ALA-T)

Post by Descartes » 13 Jan 2017 15:57

I bought a bit more at the end of trading today.
This reaction by short traders and panicky retail shareholders to a Reuters article that neither side of the negotiation even contributed to is overblown and I suspect it will be temporary. I love that some idiots people didn't want to hold it through the weekend!

I *wish* it had gotten below $30 but almost under $32 is good for a nibble.
*If* this negotiation gets serious then I *might* think about this some more.
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Re: AltaGas Services Ltd. (ALA-T)

Post by JaydoubleU » 13 Jan 2017 18:09

Deal or no deal, ALA just can't seem to sustain a rally. Last year it was the weakest of all energy infrastructures that I own. Only in the last couple of months did it appear to be trying to break out, with a bit of positive news from management on a few projects. And then management goes and does this! I might have hoped that ALA would pursue some smaller bolt-on projects since they already had so many others on the go--from the GWF acquisition in 2015 to the Townsend Facility, North Pine NGL, Ridley Island PET....

I wonder if this bold, or possibly reckless, move has anything to do with David Harris taking over the leadership from David Cornhill?

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Re: AltaGas Services Ltd. (ALA-T)

Post by 2 yen » 13 Jan 2017 20:57

JaydoubleU wrote:Deal or no deal, ALA just can't seem to sustain a rally. Last year it was the weakest of all energy infrastructures that I own. Only in the last couple of months did it appear to be trying to break out, with a bit of positive news from management on a few projects. And then management goes and does this! I might have hoped that ALA would pursue some smaller bolt-on projects since they already had so many others on the go--from the GWF acquisition in 2015 to the Townsend Facility, North Pine NGL, Ridley Island PET....

I wonder if this bold, or possibly reckless, move has anything to do with David Harris taking over the leadership from David Cornhill?
And they maybe have seen how some of the other 'mergers' have been accretive. Like Emera taking over the Tampa power grid, Fortis doing their thing and others.

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Re: AltaGas Services Ltd. (ALA-T)

Post by jeremy » 25 Jan 2017 17:01

Deal is done: AltaGas Ltd. to Acquire WGL Holdings, Inc. in C$8.4 Billion Transaction

As an ALA shareholder, I'm not sure I like this deal.

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Re: AltaGas Services Ltd. (ALA-T)

Post by JaydoubleU » 25 Jan 2017 17:57

And they maybe have seen how some of the other 'mergers' have been accretive. Like Emera taking over the Tampa power grid, Fortis doing their thing and others.

2 yen
You might be right. They will sell subscription receipts convertible to common shares upon closing in 2018, just as AQN did. They also offer a specific dividend growth target, just as AQN, EMA, FTS, TRP and ENB did when they made large deals. I suppose to sweeten the deal for shareholders.
 Financial highlights
 Expected to be meaningfully accretive to EPS (8-10%) and normalized FFOPS (15-20%) on average through 2021
 Supports 8-10% annual dividend growth for AltaGas through 2021, with a reduced payout ratio
There is a presentation on the ALA website. I'll have to read it more carefully before I make up my mind.

https://www.altagas.ca/invest/events-and-presentations/

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Re: AltaGas Services Ltd. (ALA-T)

Post by bpither » 26 Jan 2017 00:10

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