Writing for nabtrade, James Dunn has this to say. As always, DYOR and don't take this as Gospel:
APA Group has always been considered a high-quality utility company, with a highly defensive income stream that is backed by an extensive gas pipeline network – that is still the case, and has given the company one of the longest dividend growth records on the ASX. That strength has underpinned expansion into renewable energy – APA is now one of Australia’s largest owners and operators of renewable power generation assets, with wind and solar projects across Western Australia, South Australia and Queensland, and the company recently announced its first hybrid energy “micro-grid” project at Gold Road Resources’ Gruyere gold mine in Western Australia, combining solar energy with battery energy storage.
Where it sits at the moment, APA is a crucial part of the federal government’s gas-fired recovery plan, APA plans to spend more than $1 billion between 2021 and 2023 on projects in Australia, including a three-stage, 50% expansion of capacity to deliver gas from Queensland to Sydney; the company is also eyeing large potential growth opportunities with renewables/firming/storage and electrification in this country, and APA is putting in the work to be able to participate in the “hydrogen economy,” should that come to fruition. All up, APA believes there is more than $68 billion worth of growth opportunities in Australia out to 2040.
This bonanza is dwarfed in the USA, where, for some time now, APA has been planning an expansion, seeing massive potential involvement in gas pipeline infrastructure, renewables/firming and electrification. The company envisages that $2.6 trillion of investments are needed in energy infrastructure and renewable generation in the US over the next 20 years, to meet changing energy needs; APA is looking at integrated gas and electricity transmission companies, where it expects growth to meet net-zero emissions targets, as well as gas pipelines and utilities.
While investors wait for a potential move into the US, and the capital-raising plans that will be required, FY21 earnings are likely to come under slight pressure, before resuming growth in FY22. However, the dividend yield situation is expected to hold-up, as a high-yielding stock, with analysts seeing substantial scope for the APA share price to move higher, augmenting the potential “total return” scenario the stock appears to offer.
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