Algonquin Power & Utilities Corp (AQN.TO)

Sold most of its renewables business. Coming out of some very dark years. Continues to put $$ in. Attractive looking out 5 years as new management regains footing and builds confidence with investors. Will grind higher. Yield is ~5%.

They've had several problems in recent years, but after selling their renewable business, they are on track to be a regulated utility. They have many US operations. Owns another utility. AQN lowered guidance for tax reasons.

Lots of issues over the years. Still in a big restructuring phase. Better companies to own for dividends. Yield is 4.3%.

Very tough couple of years. Looking better technically. But other names have better growth stories and valuations.

Look at CPX.

They spent a lot to enter the renewables space and overlevered the balance sheet. That was a disaster. They've been cleaning that up to be a pure-play utility, which is a predictable business that investors like. They have completely new leadership and have reset. This offers safe, predictable income. 

Nice beat last quarter. Energy infrastructure is a good theme. Management has righted the ship. Recent upgrade is justified. He's been buying since $6-7. Trades at 13x 2027 earnings (cheaper than peers), modelling ~14% EPS growth. Six analyst upgrades over last 30 days. Nice dividend. 

It could be a takeover target, though she doesn't own it for this reason. It did well last year, up 40%, but lagged its peers. It has a history of two dividend cuts. They've done a good job cleaning up the company by selling their renewables and are keeping hydro assets for now to become a pure-play utility. They are doing the right things. It's a new, different company now. Is the cheapest pure-play utility in Canada now. Is very bullish with utilities given data centres and the move away from fossil fuels.

They've gone through a serious transformation including cutting their dividend. An activist has come in so that the company focuses on AQN's core utility business. It's improving, and doing fine compared to other utilities. The turnaround has been successful.

It has had its difficulties. It sold its renewables and is more a utility company now and therefore more defensive. She is not sure what the dividend outlook is . She owns a different utility.

Likes this chart a lot -- it's a head-and-shoulders bottom. The head is at the end of 2024, with a shoulder at the end of 2023 and again at the end of 2025. A really strong technical base, creeping up on the neckline closer to $9. Looks ready to break out of the base. Very constructive and encouraging.

In general, renewables are starting to come back.

Follows both, has owned both in the past but not today. Quickest answer is not to invest in either. 

The reason against BCE is its growth profile. See his Top Picks for BIP.UN, an income name with a much stronger growth profile at a very attractive valuation.

He'd buy some of both, as they're both pretty attractive right now. He does like ARX a bit better than TOU, but he's not going to quibble. TOU is a great company.

As for AQN, he might become known as the patient guy who stays with these languishing stocks. After a really long time, we're now starting to see it in the headlines as a Top Pick again, cleaner story going forward, management execution improving. Long way a steady company like this can go in a short period of time once people get back on board.

Loves the space. The only one she's been buying recently, as other names have outperformed so much. Cheapest way to get distribution assets, particularly in the US. Potential for valuation to go higher. Sold off renewables, now moving to a pure-play utility that should have 4-7% rate-based growth. New management. Set up to do pretty well. Potential takeover candidate.

Also owns FTS and EMA, which are trading ~18x PE. Not crazy, but higher than historical norms.

In multi-year turnaround after its struggles from higher interest rates and slower execution. Most earnings come from stable electricity. Working to simplify its business. Moving away from riskier segments and towards regulated utilities, where cashflows are steadier and easier to forecast.

She's still cautious. Balance sheet improving. Leverage and execution keep her on the sidelines, especially when other utilities offer a cleaner story. She owns BIP.UN, H, and CPX.