AltaGas Announces 6% Dividend Raise

AltaGas (ALA) announced Friday a dividend hike and a change to its payment schedule.

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AltaGas is a Canadian natural gas transportation and distribution company, based in Calgary. (See Analysts’ Top Stocks on TipRanks)

Dividend Raised 6%, Change to Quarterly Payments

The company’s Board of Directors has approved a 6% increase (from C$0.9996 to C$1.06 annually) to its dividends on common shares for calendar year 2022.

At the same time, AltaGas is moving from a monthly payment schedule to a quarterly payment schedule with dividends expected to be paid in March, June, September, and December of calendar year 2022. The quarterly dividend will be paid at the rate of C$0.265 per common share.

Subject to the approval of the Board of Directors, the first quarterly dividend of C$0.265 per common share (C$1.06 per common share annually) is expected to come into effect for the March dividend which will be paid on March 31, 2022, to common shareholders on record as of March 16, 2022.

Monthly dividend payments of C$0.0833 per share will continue until the end of 2021.

CEO Commentary

AltaGas president and CEO Randy Crawford said, “The six percent dividend increase builds upon our prior year dividend increase and reflects the success related to the purposeful actions we have taken over the past number of years to reposition the Company and our confidence in AltaGas being able to deliver continued earnings growth in the years ahead.

“We believe the six percent increase balances the Company’s desire to return more cash to shareholders with our focus on continuing to de-leverage the balance sheet and fund the strong organic growth opportunities that are on the horizon. We look forward to discussing our strategic priorities and growth plans at our 2021 Investor Day on December 15, 2021.”

Wall Street’s Take

On November 30, RBC Capital analyst Robert Kwan maintained a Buy rating on ALA and a C$31 price target. This implies 27.8% upside potential.

Overall, consensus on the Street is that ALA is a Strong Buy based on seven Buys. The average AltaGas price target of C$30.25 implies an upside potential of about 23.4% to current levels.