Investment Q&A

Q: How do I purchase Altagas subscription receipts? I cannot find the proper ticker with my direct broker. Only the stock ticker for the regular stock and the privilege stocks are shown. Is there a special section of the broker to purchase the subscription receipts.

Thank you and congratulation for a great job

Q: Hi 5i,
Just a follow up on the first part of my previous ALA question. Thank you for your response to it. I understand that according to the release you quoted, any receipt reimbursement necessary would be "plus any unpaid Dividend Equivalent Payments owing to such holders of Subscription Receipts (the "Termination Payment")." What I had in mind was the part about the reimbursement being 'in full' unless there were insufficient funds available in the cash pool for paying the reimbursement. What I was thinking was that the dividend equivalent payments issued to receipt-holders are likely being drawn from that same cash pool, so a shortfall relative to 'in full' reimbursement might be reasonably foreseeable. The unused pool may well be invested in short term instruments in the meantime but I wouldn't think that could fully offset the 6.77% yield of the receipts (on the $31 issue price). Thanks again!

Q: Hi 5i! This is regarding Altagas (ALA); please correct me if I am mistaken in setting this out:
1. The prospect of the return of cost of the receipts in the event the WGL takeover collapses: Doesn't this really mean that receipt-holders would receive $31 minus the total of all dividend equivalent payments issued in respect of each receipt held (even if they were issued to someone else before you bought your receipts)? In that case, if the deal were to collapse after 15 monthly distributions, receipt holders would be due to receive $31 - $2.625 (i.e. minus 15 x $0.175) or net $28.375 per subscription receipt? In this situation, people holding the receipts from issue in taxable accounts would still be down the tax on the distributions, even after receiving 'reimbursement' for the cost of the receipts.

2. Do you know if ALA's management or board have given any indication of their intentions about the possibility of a dividend increase in 2017 or even any time before the closing date of the WGL transaction? Previously ALA had been raising annually. I have seen people writing as though dividend increases are off the table until Sept 2018 but I don't remember seeing an announcement from the company to that effect.

3. If Altagas' share price is down because "the market does not like the WGL transaction" or because "the market does not like uncertainty," wouldn't that suggest that if the deal falls through the share price would be likely to rise, particularly given any continuation of the recent strong quarterly report? I believe it was trading in the range of $33-35 shortly before the WGL deal was announced.
Thanks!

Q: Hi Peter: When is ALA's acquisition of WGL is likey to go through or is likely to denied by the US regulators. Thanks.

Q: I am thinking of putting a fairly large sum of unregistered money into Altagas just to get the dividend. I am not overly concerned about the share price unless something catastrophic happened to the company. I realize that sometimes the strongest of companies can go out of business so before committing I am wondering about the chances of something really bad happening to this company. Perhaps I am safer with a covered call etf strategy (but getting less of a dividend)? Your thoughts?

Q: Hi,

AltaGas shares are trading less than the Receipts. What gives? Is it still better to buy the Receipts or would you buy the shares in this instance? I own both now.

Thanks,
Robert

Q: Hi. I have a question about Altagas. When the company converts the receipts to common shares next year, investors will only benefit if ALA is higher than what a person paid for ALA.R. Recently, I found the common share price has been drifting lower and lower than the receipt. At this point, what's the benefit of buying ALA.R? Currently, ALA common shares receive a higher dividend %. I'm thinking to buy ALA or ALA.R for income. Which one should I choose, or are there any others that you would recommend? Thanks for your guidance. Have a great day.

Q: I'm confused about the payout if the deal goes thru. Do I get the shares @ the completion date cost, or shares at the going rate. As of now, I paid 31 and they are 28?

Q: Hi Peter I hold a substantial position in ALA and I am water by 10+% I like the story and business but wonder how much further this stock will fall if the aquistion does not go through
Kind regards
Stan

Q: On august 17 in answer to an ALA question, you said that a regulatory agency (?) had recommended AGAINST approval of the US acquisition. I have head nothing about this anywhere else. Can you please elaborate, tell us how important this may be for ultimate approval, and provide a link to this? I was quite surprised to hear this, given the Q2 conference call said progress on the acquisition was ahead of schedule and they expected final approval by the end of Q2.

Q: My only energy holdings are ALA, ENB and PPL, representing 11% of my equity portfolio. I am considering SU or CNQ as an addition. Which do you prefer at this time, or would you view my energy holdings okay as is?

Q: Hello team,

I am looking for income in energy sector? i am leaning towards a investment in more of a gas related company than oil, I believe its a better longer term bet. The two companies i am most interested in are Keyera and Altagas. They both have been trending lower lately! What is the main difference in the two companies, and which is your favourite for a 3-5 year hold. Plus could both be owned? Do they compliment each other?

Thanks,
Stephen

Q: I am a long term holder of GE, and ALA. Even-though the market has been good these stocks continue to go down.
In your opinion, should they be kept or should I take some of the gain before it dwindles away.

Q: Greetings,

I have a full position in Altagas spread across three registered accounts. I've held this for years and plan to keep it but I was wondering whether it would be a good idea to sell the shares now and buy the subscription receipts. Seems like the only downside to that would be a case where the big deal falls through but the stock prices goes up. Can't see that happening. Am I missing something?

Q: Everyone is worried about the acquisition of WGL. What is the big deal if the acquisition does not go through? Besides the one time cost associated with the acquisition, is there any other impact to ALA?

Q: i seen this in your answer to luca. 5i Research Answer:
We hold ALA in the income portfolio for the attractive yield (7.5% as of today).

Q: Thank you for the midstream article. The outlook for Ala looks a little concerning. It's held in an income portfolio but don't want to loose capital. Is it a hold long term?

Q: Hello 5i.

I bought these 2 stocks for our income portfolios within the last few month.
I bought Smart Reit at 32.77 and my wifes account ALA at 30.26
We're down about 7.5 % in each stock.
Each stock is about 5% of the income account.
Should I sell and find something better or sit back and draw the dividend??

Q: I am considering trading my small position in CVD for ALA.R. With higher dividend returns and being a depository receipt as you highlighted in an earlier blog. Does this trade make sense? I will have no tax implications as they are held in a LIRA account. Thanks. Shyam

Q: What is the payout ratio for Altagas and is it within the normal range for this sector? Thanks for your time.