Topic: How To Invest

Your views on AltaGas Income Trust, given its credit rating upgrade?

Article Excerpt

AltaGas Income Trust, $16.30, symbol ALA.UN on Toronto (Units outstanding: 76.8 million; Market cap: $1.3 billion), mainly extracts, processes and distributes natural gas. It also processes natural-gas liquids. AltaGas has four segments: 1) The energy-services division (57% of revenue) has two main components: an energy-management business that provides consulting and supply-management services, and a gas-services business that buys and sells natural gas and electricity. This operation also transports and stores natural gas. 2) The extraction and transmission division (23% of revenue) has interests in six of the 10 extraction plants in Canada. These straddle high-volume natural-gas pipelines, and they reprocess the gas as it passes through. AltaGas’s plants recover residual ethane and natural-gas liquids (NGLs) during this process. 3) Through its power-generation division (12% of revenue), AltaGas owns 378 megawatts of electricity-generating capacity in the form of a 50% interest in the coal-fired Sundance B power plant near Edmonton. It also owns 25 megawatts of gas-fired “peaking” capacity in southern Alberta. (This profitable…