Algonquin Power & Utilities Corp (AQN.TO)

A renewable power company, and like a lot of Canadian companies, they made an acquisition in the US. There are a few more opportunities in the US. Bigger is generally better in utilities. They just raised their dividend by 10%. This is one of his favourite renewable plays. Their dividend track record in growth has been very impressive. A very, very solid name.

(A Top Pick Jan 21/16. Up 9.72%.) Chose this for solid growth. He believed that yield proxies had more life in them and that interest rates would stay low for some time. He still sees this growing really well, 16% over the next couple of years. He sees dividend growth. The whole group might be a little expensive when there are more exciting alternatives.

Primarily renewable power, and she likes that space. A well-managed company. Quite attractive to some of the other utility stocks out there. 5.1% dividend yield.

He likes this quite a bit. Interest rates look like they are going to go up, but you are getting a higher yield here. He thinks the stock is undervalued. Dividend yield of 4.8%.

They’ve done a great job. Just did an acquisition in the US. They are going to increase their dividend 8%-10% per year over the next couple of years. This could come off further with interest rates. He will probably be looking to increase his holdings in utilities over the next 12-18 months.

An independent power producer. Just made some acquisitions of wind farms. This was hurt at around the Trump election when there was talk of rebuilding coal. A very good stock paying a healthy dividend of 5.1%, which he doesn’t think is at risk. A utility like company which will give you utility like returns.

Just closed their US acquisition, which had been expected. There are instalments receipts that are going to get exercised, which is probably going to create some churn in the stock for the next month or so. This has a good dividend with a lot of growth from the US side. It has been hurt because it has been perceived as a utility play, which are now out of favour. If you are going to buy something in this group, you have to buy growth, and this has the best 12-month growth in the group.

They have a good track record with acquisitions. They just closed an acquisition of a US utility that should give them good growth prospects for the next two years. He is concerned about what happens under Trump with renewable power investments. The other problem is tax reform. He is worried if their tax credits will stay going forward.

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.

This company has a lot of their operations in the US, probably 60%-70%. If bond yields go up, investors in this will question why they are in it and would look at moving out. The chart shows a long upward move, but there has been a correction taking place since mid year. Because bond proxies tend not to do well in January, he would wait a little longer.

Had sold his holdings, and has recently stepped back into this name. Looking at utilities and telcos, anything that is interest sensitive has recently had a selloff. In its group, this is the top of class in terms of cash flow and EPS growth. They are also somewhat diversified. Dividend yield of 4.97%. (Analysts’ price target is $14.20.)

A great company. They have great growth, modelling 15% EPS over the next couple of years. A lot of their assets are in the US. Empire is on track to close, which is accretive to them. Q3 was in line. This shouldn’t be too impacted by Trump policies. In a rising bond yield environment, maybe you shouldn’t pay 19X, maybe 17 or 18. You could sell some Puts to get it at a lower level. Dividend yield of 5.1%.

(Market Call Minute.) This has good acquisitions, and continues to grow in the US.

He loves the alternative energy space. Over time we are going to have less carbon, and we are not going back to coal fired plants and dirty energy. The world is aiming to get cleaner. A company like this, that focuses on renewables, should do very well in the very long run. Looking at earnings and the multiple, it is a little bit expensive. At the current price, it looks very attractive. He would nibble away at this.

He likes utilities in general and he really likes this stock. Has a low ROC, but it is reliable. The dividend is fairly safe.