Opinions Jerome Hass
Algonquin Power & Utilities CorpAQN.TOCOMMENTDec 29, 2016
Jerome HassStock price when the opinion was issued
As of Sep 01, 2026. Market Open.
You might be interested:
Continues working through a multi-year turnaround. Now mostly a regulated utility providing natural gas, water, and electricity. Positive that management's returned focus to simpler utility operations. New, approved utility rates are helping earnings. More than 80% of operations in US, HQ plans to move to US (reduce taxes, attract more US investors).
Debt remains extremely high, earnings growth still modest. She's just monitoring, needs to see more execution.
He owns a preferred share. AQN's problem is the debt from all their acquisitions back in the day; interest rates hit them hard and forced a dividend cut. They sold their renewables business. Then, shares fell after an earnings report that lowered their 2027 profit guidance. AQN now focuses on gas, water and electric services. The street is saying to them, "Prove to me you can make money again." It's sitting in the penalty box waiting for management to show a positive move.
David Driscoll
There is hope. They are now focused on regulated utilities and are out of renewables, which didn't work out. They're under-earning what they are allowed to make, due to government strictures. The opportunity ahead is for them to increase their profitability both internally and what they're allowed.
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%.
Ryan Bushell
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.
Greg NewmanIt 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.
Rebecca Teltscher
A good company with about a 5% yield. Their policy is to try and grow the dividend at about 10% a year. Have been able to grow their FFO by about 11%+. Their payout ratio has been falling, which is good. The only caveat is that if interest rates are going to be rising, you have to be careful about stocks like this. They deal with a lot of debt, so their debt costs are going to be rising. Has been a high dividend payer. As interest rates rise, that tends to be discounted by investors. If he were dealing with this, he would hedge it out by being Long this and Shorting another utility against it.