Algonquin Power & Utilities Corp (AQN.TO)

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.

He owns no utilities. A dividend stock should provide predictability, which AQN cannot. They've changed CEOs three times in the past 5 years, issued a lot of debt to get into renewables and now there's an activist on the board trying to unlock value by selling pieces of the business.

Troubled in the past. Looking at the chart, might be worth a 2-year hold -- you get the dividend, and it might get back in line with where the rest of the group is trading. 

Instead, he likes NPI and CPX a bit better.

He looks at peaks and troughs. What you may be seeing right now is a higher trough. Now the stock needs to take out the last peak, around $9. If it moves above $9, the technical point of view tells you that the sellers who didn't like the stock are being taken out.

Don't buy here but, funnily enough, he'd buy it higher.

Now more of a pure-play regulated utility company. Takes time to repair investor confidence after previous management's missteps. Likes management, and analysts are finally starting to warm up to the story. Trades at pretty big discount to peers, and that can be closed over time. Lower price means you're pretty well protected on the downside.

Smaller and more nimble now, almost 100% in the US. That provides more opportunity -- either as a takeout, or to grow organically and make smart deals again. Yield is 4.36%.

The uptrend action on the chart was quite positive, as it broke the downtrend. Renewables plus regulated utilities (where their focus is now, to come up the quality stream and become a more robust and growing business). This move would improve balance sheet and increase stability. Fantastic name to hold for the long term. Yield is 4.44%.

Sold most of its renewable assets, except for hydro. Water utilities in the US. Rate cases coming up always make analysts nervous in case rate increases are denied. New CEO trying to turn things around. Debt levels are a bit high. 

Old management expanded things too rapidly. Dividend was cut. Talk of redomiciling to the US, but might be too small to be on the US market. He'll monitor it.