11:18 AM EST, 12/03/2024 (MT Newswires) -- (Adds analyst comment.)

AltaGas (ALA.TO) on Tuesday said it expects 2025 normalized earnings per share of $2.10 to $2.30 as it released its 2025 guidance and raised its common share dividend by 6%.

The EPS guidance at the midpoint is about 2% above the 2024 figure.

The utility and natural-gas infrastructure company also forecast 2025 normalized EBITDA guidance of $1.78 billion to $1.88 billion. The guidance represents about 6% growth at the midpoint. Growth will be driven by asset-modernization investments in the utilities segment and improved utilization in the midstream segment, the company said.

"The potential of AI and datacenter demand for natural gas in Northern Virginia adds to this already robust outlook and reiterates the long-term need for safe, reliable, and affordable natural gas to keep society moving forward," said AltaGas chief executive Vern Yu.

The company's 2025 capital program is expected to be $1.4 billion, with more than half allocated to the utilities segment. About 45% will fund long-term midstream projects. The remaining budget will be used on digital and systems initiatives to improve operating efficiency.

AltaGas also increased its dividend to $1.26 per common share per year. The company extended its 5%-7% compounded annual growth rate guidance on dividends to 2029.

National Bank of Canada kept its outperform rating and $39.00 price target for the company's shares following the news.

The bank said its target is based on a risk-adjusted dividend yield of 3.3% applied to its estimated 2025 dividend of $1.26 per share, a 14.5x multiple of its estimated 2025 Free-EBITDA and discounted cash flow valuation of $41.25 per share.

"With 2025 financial guidance largely in line with our current estimates, combined with a modestly higher capex profile (bumping up our longer-term estimates), we expect modest changes to our current estimates and valuation ahead of rolling over our valuation estimates to 2026 early in the new year," National Bank said.

AltaGas shares were last seen up $0.45 to $34.59 on the Toronto Stock Exchange.

Price: 34.61, Change: +0.47, Percent Change: +1.38