Q: I have owned Altagas for about a year now and have been very happy with the growth so far _ app 30% for me. However now I am beginning to wonder if it has gone up too much and now the only way to go is down?? What are your views on its potential for the next 18 months? Is there some sort of expansion of operations upcoming?
5i Research Answer:
ALA has improved its execution and the stock has also benefited from the drop in interest rates in Canada. Further, the entire utility sector has seen some excitement from AI demand. ALA is now 16X earnings. It is expected to grow about 10% next year. The dividend was last raised in December 2023 so we could see a hike again this year end. We think it is decent for the sector. It has cut its dividend in the past (2018) but we would see it as secure now. We would not expect another 41% one-year gain, but with lower interest rates and it being a defensive type of stock we would remain comfortable holding it, primarily for income.