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Opportunities of a Lifetime: AltaGas Ltd. Stock and Enbridge Inc. Stock Dividend Yields Closing in on 9%

Two energy infrastructure giants are giving investors a big opportunity, as they are in a sweet spot with regard to stock price, dividend yield, and growth prospects. We just need to work through a more difficult regulatory approval process for pipelines and keep our eyes on the long term.

AltaGas Ltd. (TSX:ALA) stock continues to drift lower, as the market is increasingly wary of any uncertainties these days.

When it comes to AltaGas, this is not new, as the stock has been languishing for quite some time now, as the company waits for approval of its WGL acquisition and more clarity as to the funding of said acquisition.

AltaGas stock has retreated another 15% year to date, bringing its dividend yield to a shockingly high 8.84% and giving investors the opportunity to grab this deal that won’t be around much longer.

With a dividend yield of this magnitude, this stock has been paying investors to wait for resolution of the issues that have been surrounding the stock.

Earlier in April, the company came a little closer to approval of the acquisition, receiving regulatory approval from the Maryland Public Service Commission. The next approval decision by the District of Columbia is expected by mid-2018.

While the stock rallied in response to the Maryland approval, apparently too much uncertainty still exists, because it has been weak again as of late.

Management is in discussions with many parties regarding the sale of different assets, including the potential sale of its minority interest in Northwest B.C. Hydro facilities, and it is expected that this monetization will bring in $2 billion in proceeds this year.

WGL’s high-quality assets and leading market position will bring AltaGas many growth opportunities as well as significant earnings and cash flow accretion.

At the end of the day, the company is seeing strong operational momentum, as evidenced by fourth-quarter results that showed normalized cash flow from operations that was 4% higher than the same period last year, with a very healthy payout ratio of well under 60% and good liquidity.

Enbridge Inc. (TSX:ENB)(NYSE:ENB) stock is another dividend-paying behemoth that has seen weakness, and it is now trading at an elevated dividend yield of 7.11%.

Since 1996, investors have enjoyed 22 years of dividend increases, with a 33% dividend increase in 2015, a 14% increase in 2016, and a 15% increase in 2017. Management expects the dividend to increase at a 10% compound average growth rate from 2017 to 2020.

But Enbridge is also facing a funding issue, with a $3 billion asset sale program targeted to be completed by mid-2018, and with the market eagerly awaiting the announcement of its completion.

Investors can feel reassured though, as the company has reaffirmed its 2018 guidance, calling for a 21% increase in EBITDA to $12.5 million and 10% annual dividend growth to 2020.

Investors who are able to stomach the uncertainty will likely do extremely well with these stocks.

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Fool contributor Karen Thomas has no position in any of the stocks mentioned. The Motley Fool owns shares of Enbridge. AltaGas and Enbridge are recommendations of Stock Advisor Canada.

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