Is it a good company at a reasonable price? I know that they cut their dividends in 2019. People who live off their dividends tend to be unforgiving of dividend cuts. I am not. I have kept or invested in stock that cut their dividends. It depends on how I feel about the company. Note that I have had companies that cut dividends before, but overall, my dividend income does go up each year. I am keeping my shares in this company. I would wonder about buy at the present time because the stock price is at an all time high and my testing is showing that the stock price is relatively expensive.
I own this stock of AltaGas Ltd (TSX-ALA, OTC-ATGFF). When I bought this stock in 2009 it was on many dividend growth stock lists. In 2009, I saw that this stock also had good growth in Revenues, Earnings, Dividends, and Stock Prices over the last 5 and 10 years. The stock had a fairly strong balance sheet. I took a small position in this stock, and planned to wait and see how things go with this stock before buying more. I bought more in 2010 and 2012.
When I was updating my spreadsheet, I noticed I have a total return of 10.73% with 5.05% from capital gains and 5.68% from dividends. I notice that this stock has not been on the Money Sense 100 Best Dividend Stocks since 2021. See the last list here.
If you had invested in this company in December 2015, for $1,068.34 you would have bought 26 shares at $82.18 per share. In December 2025, after 10 years you would have received $560.69 in dividends. The stock would be worth $1,814.15. Your total return would have been $2,374.84. This would be a total return of 9.47% per year with 5.44% from capital gain and 4.03% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $82.18 | $1,068.34 | 17 | 10 | $560.69 | $1,814.15 | $2,374.84 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 2.72%. The 5 year and historical median dividend yields are moderate at 3.98% and 4.96%. The 10 year median dividend yield is good (5% to 6% ranges) at 5.21%. The dividends have increased ty 5.6% per year over the past 5 years. Note that this company cut their dividends some 56% in 2019. Dividends are still 39% below those of 2018.
The Dividend Payout Ratios (DPR) are probably too high expect for Cash Flow. The DPR for 2025 for Earnings per Share (EPS) is too high at 51% with 5 year coverage at 64%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is too high at 58% with 5 year coverage at 57%. I prefer this percentage to be below 50%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 18% with 5 year coverage at 12%. The DPR for 2025 for Free Cash Flow (FCF) non-calculable due to negative FCF values.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 50.81% | 64.12% |
| AEPS | 56.76% | 57.62% |
| CFPS | 15.18% | 12.23% |
| FCF | NC | NC |
Debt Ratios are mostly fine, but Liquidity Ratio could improve. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.70 and currently at 0.61. The Liquidity Ratio for 2025 is too low at 0.82 and 0.82 currently. If you added in Cash Flow after dividends, the ratios are still too low at 1.05 and currently at 1.09. I prefer these to be at 1.50 or higher but at least they are over 1.00. The Debt Ratio for 2025 is good at 1.55 and 1.55 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.80 and 1.80 and currently at 2.80 and 1.80.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.70 | 0.61 |
| Intang/GW | 0.43 | 0.37 |
| Liquidity | 0.82 | 0.82 |
| Liq. + CF | 1.05 | 1.09 |
| Liq. + CF + D | 1.06 | 1.10 |
| Debt Ratio | 1.55 | 1.55 |
| Leverage | 2.80 | 2.80 |
| D/E Ratio | 1.80 | 1.80 |
The Total Return per year is shown below for years of 5 to 26 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 5.59% | 21.98% | 17.46% | 4.52% |
| 2015 | 10 | -3.86% | 7.27% | 3.08% | 4.19% |
| 2010 | 15 | -1.86% | 9.89% | 4.48% | 5.41% |
| 2005 | 20 | -1.88% | 7.22% | 2.04% | 5.18% |
| 2000 | 25 | 9.27% | 21.96% | 8.66% | 13.30% |
| 1999 | 26 | 18.00% | 7.76% | 10.24% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 13.97, 16.19, and 18.40. The corresponding 10 year ratios are 13.73, 15.90 and 18.06. The corresponding historical ratios are 13.31, 15.61 and 18.40. The current P/E Ratio is 20.64 based on a stock price of $49.16 and EPS estimate for 2026 of $2.38. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 11.93, 14.24 and 16.45. The corresponding 10 year ratios are 12.21, 14.55 and 17.15. The corresponding historical ratios are 12.49, 14.47 and 16.57. The current P/AEPS Ratio is 21.10 based on a stock price of $49.16 and AEPS estimate for 2026 of $2.33. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Funds from Operations (AFFO) data. The 5-year low, median, and high median Price/ Adjusted Funds from Operations Ratios are 6.15, 7.34, and 8.53. The corresponding 10 year ratios are 5.99, 7.34 and 9.01. The corresponding historical ratios are 7.63, 8.85 and 10.40. The current P/AFFO Ratio is 11.93 based on a stock price of $49.16 and AFFO estimate for 2026 of $4.12. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Funds from Operations (FFO) data. The 5-year low, median, and high median Price/Funds from Operations Ratios are 5.36, 6.22 and 7.23. The corresponding 10 year ratios are 5.28, 6.61 and 8.07. The corresponding historical ratios are 6.76, 7.83 and 9.31. The current P/FFO Ratio is 11.12 based on a stock price of $49.16 and FFO for the last 12 months of $4.42. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $38.33. The 10-year low, median, and high median Price/Graham Price Ratios are 0.68, 0.84 and 0.97. The current ratio is 1.28 based on a stock price of $49.16. The current ratio is above the high ratio for the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 1.10. The current ratio is 1.75 based on a Book Value of $8,720M, Book Value per Share of $28.02 and a stock price of $49.16. The current ratio is 60% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have a Book Value per Share estimate of 28.94. This analyst calculates the Book Value differently than I do and, in this case, the 10 year ratio is 1.01. The current ratio is 1.70 based on a stock price of $49.16, Book Value of $9,005M and Book Value per Share of $28.94. The current ratio is 75% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.26. The current P/CF Ratio is 10.91 based on Cash Flow per Share estimate for 2026 of $4.51, Cash Flow of $1,402M and a stock price of $49.16. The current ratio is 32% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 4.96%. The current dividend yield is 2.72% based on a stock price of $49.16 and dividends of $1.336. The current dividend yield is 45% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. Main problem is that dividends were cut in 2019 by 56%.
I get a 10 year median dividend yield of 5.21%. The current dividend yield is 2.72% based on a stock price of $49.16 and dividends of $1.336. The current dividend yield is 48% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive. Main problem is that dividends were cut in 2019 by 56%.
The 10-year median Price/Sales (Revenue) Ratio is 0.84. The current P/S Ratio is 1.07 based on Revenue estimate for 2026 of $14,234M, Revenue per Share of $45.74 and a stock price of $49.16. the current ratio is 29% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is relatively expensive. All my tests come back with the same answer. That is that the stock price is relatively expensive.
When I look at analysts’ recommendations, I find Strong Buy (4), Buy (4), Hold (2) and Underperform (1). The consensus would be a Buy. The 12 month stock price consensus is $49.73 and a high of $53.00 and low of $42.00. The consensus stock price of $49.73 implies a Total Return of 3.88% with 1.16% from capital gains and 2.72% from dividends based on a current stock price of $49.16.
Most analysts on Stock Chase in 2025 liked this stock. There were a couple of Holds. For 2026 there is a Top Pick and a Do Not Buy. The Do Not Buy does not say why. Christopher Liew on Motley Fool thinks this is a stock to buy and hold long term. Robin Brown on Motley Fool thinks this is a good stock to buy and tuck away in your TFSA. The company put out a Press Release about their fourth quarter results for 2025.
Simply Wall Street via Yahoo Finance. I do not know where they get their information on Cash Flow in their sentence of “Based on the last dividend, AltaGas is earning enough to cover the payment, but then it makes up 10,428% of cash flows.” See my paragraph above on DPRs. Simply Wall Street has two warnings of debt is not well covered by operating cash flow; and dividend of 2.75% is not well covered by free cash flows. Simply Wall Street gives it 2 and on half stars out of 5.
AltaGas Ltd owns and operates a diversified basket of energy infrastructure businesses. Business is conducted through given segments: Midstream, Utilities, and Corporate/other. The business generates revenue from customers in both Canada and the United States, with the majority coming from Canadian customers. Its web site is here AltaGas Ltd .
The last stock I wrote about was about was TC Energy Corp (TSX-TRP, NYSE-TRP0) ... learn more. The next stock I will write about will be Hydro One Ltd (TSX-H, OTC-HRNNF) ... learn more on Wednesday, April 8, 2026 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks April 2026.... learn more on Tuesday, April 1, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
