TransAlta common a value play: its high dividend yield puts energy marketer in spotlight

Money Digest, Sept, 2002

In last month's issue of Money Digest, we wrote about TransAlta Power Limited Partnerships.

Given that the stock price of TransAlta (TSE: TA; Recent price: $20) common has been down because of the Enron scare and given that TransAlta stock yields about 5% in dividends, TransAlta, you may want to consider TransAlta common stock as well for your portfolio.

TransAlta is one of North America's lowest-cost operators of electricity generation and marketing. The company's growth is focused on developing coal-fired and gas-fired generation in Canada, the U.S. and Mexico.

In 2001, for the third year in a row, TransAlta was included in the Dow Jones Sustainability World Indexes, which identified TransAlta as a leading electric company in its group of global equity indexes.

TransAlta is the largest non-regulated power generator with operations in Australia, Canada, the U.S. and Mexico. Its strategy is to build on its strengths and take advantage of the new power economy where non-regulated assets provide higher growth and returns.

Over the years, TransAlta has been selling its regulated businesses so it can concentrate solely on unregulated markets. The company feels that its unregulated status puts it into a competitive generation services marketplace that provides higher growth potential than possible under regulation.

The company's stated policy is to maintain its dividend.

For investors seeking dividends in a well-managed company, TransAlta may be attractive at current levels.