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I guess its time to buy up a boatload of this.
Normalized FFO1 per share of $2.08 in Q1 2021 compared to $1.51 in Q1 2020, representing a 38% year-over-year increase.
Normalized EBITDA1 of $674 million in Q1 2021 compared to $499 million in Q1 2020, representing a 35% year-over-year increase and reflected solid performance across the platform.
"With high dividend and decent growth potential, this is one of the TSX stocks. My modeling shows, including the $0.96 div, in 52w, you will end up at $16.6 - $25.5 with midpoint of $22.4"
It seems that this stock is on track to reach my price target.
i) The spin-off of Canadian assets is only a partial spin-off. It is not a complete split of Canadian from American assets. Only certain Canadian assets are being spun-off.
ii) The commitment to increase the dividend was removed in the last quarterly update. They no longer predict the dividend growth of 6-8% that they did previously. That being said, there are no plans to cut the current dividend and the representative specifically said "The CEO has no intention of offering a dividend which is not sustainable - it is not our policy to do so". When I asked if this means the current dividend will be maintained she stated "We have no indication that the dividend will be cut and this will be mentioned in the next quarterly update".
With the earnings growth that the WGL acquisition offers, it would appear that ALA is trading at a significant discount because of the perceived unknowns in the spin-off. However, the information on the spinoff is already posted on Sedar and the Investor Relations contact that I spoke to is a bit surprised with how much misinformation is out there and affecting the current stock price.
This reaffirms my belief that fair value on an Altagas Share right now is closer to C$40 with plenty of room to increase dividend too.
A cornerstone investment if there ever was one.