
TSE:AQN
This summary was created by AI, based on 28 opinions in the last 12 months.
Algonquin Power & Utilities Corp (AQN) has experienced significant challenges over the past few years, particularly stemming from high debt levels associated with its aggressive acquisitions in the renewable sector, which led to a dividend cut and a loss of investor confidence. Despite these struggles, recent reviews indicate that the company is undergoing a transformation, refocusing on its core regulated utility business after divesting most of its renewable assets. Analysts have observed signs of improvement, suggesting that AQN is gradually regaining footing under new management. However, the stock remains in the 'penalty box' and is viewed as a 'show-me' stock, awaiting proof of its capability to generate consistent profits again. While there is optimism about future earnings potential and attractive yields, many experts suggest a cautious approach due to the lingering restructuring phase.
The renewable energy transition is very positive. We have growing energy demand that needs to offset the growth even before replacing existing energy supplies. They have a big presence in the US. They just signed an agreement with Chevron to off-set carbon emissions. (Analysts’ price target is $20.50)
A regulated utility and they make green energy. 90% of revenues come from the U.S. It's defensive with a visible cash flow. Their renewable business is supported by long-term contracts. The 4.5% dividend is safe and will continue to rise. AQN recently raised $1 billion to fund their capital program this year into next. They've partnered with Chevron to develop their renewable energy. Last week, they bought a Chilean water utility and may buy the rest of it later. Overall, they're expanding their renewable power space. They have room to grow geographically here and abroad. Strong growth prospects here and an income stock. We're already seeing capital pour into renewable power globally and here in Canada. (Analysts’ price target is $20.59)
It is a hold like most utilities. Canadian utilities cleaned up their balance sheets since the last recession and then used them to acquire US companies. This has largely been played out now. The CEO has recently stepped down and this creates uncertainty.
There's lots of interest in renewables. BEP.UN has been a good performer. He did start a small position in AQN. It will be a competitive and challenging sector, but fossil fuels need to be replaced. The sector will only get bigger and better.