Algonquin Power & Utilities Corp (AQN.TO)

The utility space is great if you want growing dividends. Assets are regulated, and a company has the ability to price its long-term assets and good cash flow. This one has been doing a good job, especially in the renewables area. He tends to go to larger utilities. There’s no reason why the dividend can’t continue to be increased.

This has solar and wind facilities, but are not a major factor. In most cases, they had government subsidies to help them into the area, but he is not clear as to whether these go on forever. Reasonable yield in a relatively stable company.

It is an interest sensitive stock. He bought back cheap when it was beaten up. It is one of the good investments in the renewable energy sector. Thinks you will see the growth phase resume. He is a regular buyer of this stock on weakness.

He has been adding to it because of the yield. He rates it as a sector outperform. He is moving money out of others and into this one. Couple of good catalysts coming. A solid dividend. Not too vulnerable to rising interest rates.

Doesn’t own this yet but it is one that he will start a position in.

Planning on holding his position for a long time in the future. Have a lot of projects in the pipeline and are very diversified in terms of good balance between power generation distribution and utility holdings. Emera (EMA-T) has a 25% stake in the company so there is the potential this company gets taken out down the road. Great growth and he sees them increasing the dividend on an annual basis.

The whole Canadian energy infrastructure stocks sold off a lot due to the bond yields care and this one sold off even harder. Market is concerned that they are going to need to raise equity, which they probably will do to finance expansion. Estimates their EPS can grow by 45% over the next 3 years from 1) a lot of acquisitions that haven’t yet been closed and integrated and 2) they’re building out $835 million of Canadian contract renewable power for the next 3 years.

Likes the power utilities for their yield and they are good solid companies. His company has an $8 target on this. Has had a pretty good pull back, so this is a pretty good entry point.

His company has an $8 target on this. Yield of 5%. Really good entry point.

Got caught in down draft. A fine company. Yield is good at 4.8%. Businesses they are in should continue to grow. This is the kind of company he would be in.

He has to lump them with the whole power and utilities sector. They are trading at large multiples to their earnings. These are high capital intensive businesses. He sees them as moderate risk due to the possibility of interest rates rising. They have stable businesses and you get to charge a regular ROE on the power over time.

He thinks it has had its run. He is selling down because it is now just purely a dividend story.

Buy more Algonquin Power (AQN-T) or buy BMO Equal Weight Utilities Index (ZUT-T)? ZUT gives you more diversification so he would unload Algonquin Power and buy ZUT. This will take the risk out of the equation.

About 99% of the people owning this own it for yield. If you can get a little capital appreciation out of it, that is a good thing too. Pretty expensive. About 4% yield. Be ready to climb off the bus if you see yields on bonds start to go up.

(A Top Pick Feb 16/12. Up 28.09%.) Sees it going up to $8.50. Has a very good development pipeline and a very good payout ratio. Management has done a good job of growing the company.