Over a hundred years ago, TransAlta (TA) was launched as a small, local power company in Alberta. Today, the company has transformed itself to become Canada’s largest publicly traded generator and marketer of electricity and renewable power. With approximately $3 billion in annual revenue, more than $9 billion in assets held in power plants across Canada, the US and Australia, TA has certainly proven its worth as a power generator and a powerful dividend-payer.
The TransAlta Board of Directors has a formal dividend policy that targets to pay shareholders “an annual dividend in the range of 60 to 70 per cent of comparable earnings.” This means sustainable dividend growth is a priority for them, which makes it a priority for me to hold this stock and buy more of it over time…
I just received over $40 from TransAlta this month which purchased another full share via my DRIP.
Last month, I found out more good news about this dividend-payer. They announced a partnership with another power favourite of mine, Enbridge (ENB) for what will be Canada’s first fully-integrated carbon capture and storage (CCS) project by retro-fitting a coal-fired electricity plant. When complete, this project, Project Pioneer is expected to be one of the largest CCS facilities in the world and among the first to have an integrated underground storage system. This coal-fired plant is west of Edmonton and is jointly owned by TransAlta and Capital Power Corporation. I’ve read that the majority of cardon dioxide captured will be used for enhanced oil recovery while the rest will be used for CCS deep underground.
Project Pioneer is expected to account for at least 20% of the Government of Alberta’s target of reducing five megatonnes of CO2 emissions per year by 2015. In addition, the project’s technology has wide potential applications. It could be used by other coal-fired power plants in Alberta and throughout the world, as well as by other industrial sectors.
Sounds like powerful stuff from a powerhouse stock that should yield powerful dividends for years to come. TransAlta is currently yielding about 5.6% and is trading just above its 52-week low.
Do you own TransAlta or similar “power” stocks?