The TSX registered an all-time closing high of 34,541.30 on March 2, 2026, but has since blown hot and cold, sometimes moving sideways amid persistent geopolitical tensions. War headlines dictate market action on any given day. The energy sector is doing the heavy lifting for the Canadian stock market, gaining 46.3% year-to-date.
Many energy constituents have market-beating returns following the massive sector run, although many may also have reached their peaks. A compelling option with a rare profile and not yet overextended is AltaGas Ltd. (TSX:ALA). This hybrid utility stock is up nearly 28% thus far and stands ready to rise further in 2026.
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Dual engine
AltaGas is officially in the energy sector and operates within the oil and gas midstream industry. However, the $15.8 billion company operates as a hybrid utility, blending two distinct business models. Its Midstream segment, including exports, is the primary growth engine. Regulated natural gas utilities are roughly half of the entire business. Revenue streams from this defensive segment are predictable and recession-resistant.
Strong start to 2026
In Q1 2026, normalized EBITDA reached a record $818 million, an 18.7% increase versus Q1 2025. Utilities accounted for 62% or $555 million of the quarterly normalized EBITDA. Normalized net income rose 21% year-over-year to $415 million. Total export volume of liquid petroleum gases (LPG) was 124,917 barrels/day (Bbl/d).
Its President and CEO, Vern Yu, summarized the results, “AltaGas’s first quarter results were above our expectations and reflect strong operational performance across the enterprise and supportive energy fundamentals.” He notes the heightened demand for Canadian LPG exports due to LPG supply disruptions and ongoing global trade tensions.
“AltaGas continued to grow its export platform during the first quarter, serving a diverse and expanding customer base across Asia,” Yu added. The Ridley Island Energy Export Facility (REEF), a large-scale LPG and bulk liquids export terminal and marine berthing facility is under construction. According to Yu, REEF will further expand AltaGas’ open‑access export infrastructure when it goes online by the second half of 2027. It will also serve as storage for export products, such as butane, methanol, propane, and light diesel.
Dividend policy
AltaGas implemented a massive corporate restructuring in 2019, including a new dividend policy. The company changed the payout schedule from monthly to quarterly. Management focused on lowering debt and supporting dividends with stable, regulated utility earnings.
ALA has increased its dividend for six consecutive years now. If you invest today, the share price is $53.17, while the yield is 2.5%. The annual dividend guidance is a 5% to 7% compound annual growth rate (CAGR) through 2030. Its long-life energy infrastructure assets ensure compounding long-term value for shareholders.
Infrastructure developments in the midstream export division are ongoing, while the regulated utility rate base is expected to expand by 8% to 10% annually.
Highly attractive
AltaGas is among the highly attractive options for income-focused investors today. The large-cap stock offers the safety of a regulated utility and the dynamic growth of an energy exporter. Now is the time to own a top-tier, dividend-paying hybrid utility stock.
