Shares of Canadian energy infrastructure company Altagas Ltd. (TSX:ALA) have been on the rise of late, following news that the company will be hiking its dividend after posting stronger than expected earnings this past quarter.
Altagas’ hotly anticipated acquisition of American utilities company WGL Holdings has largely held back the capital appreciation many investors expected post-announcement, as some analysts have pointed to the premium Altagas paid for these assets as well as the lack of apparent synergies the combined firm will potentially be able to glean from combining resources.
That said, rising commodity prices this past quarter has helped boost the bottom line of the company’s existing operations, providing positive sentiment for market participants awaiting the announcement of additional financing measures and asset divestitures which are expected to provide the remainder of the funding necessary to close the $8.4-billion acquisition.
With other firms such as Cenovus Energy Inc. (TSX:CVE)(NYSE:CVE) recently announcing the divestiture of assets in Alberta which fetched higher than anticipated prices, the ability of Altagas to effectively divest of some of its non-core assets while remaining profitable in the near-term has some investors and analysts very bullish on the medium to long term prospects of Altagas.
In an improving commodity price environment, Altagas is one company I will be keeping an eye on as the company transitions toward becoming a larger player and significant competitor to some of the other large North American companies in this space.
Invest Wisely, my friends.
