Algonquin Power & Utilities Corp (AQN.TO)

Company not performing well lately. Long term outlook for business is still "in tact". Believes company has future and could be a good time to invest. Utility and power assets have a strong future. Would recommend as a 5 year hold. 

Renewable power and utilities, both businesses have been hammered by interest rates. Debt and payout ratio were unsustainable. Cut dividend. Too many other, better opportunities out there.

Rising interest rates hard on business (debt costs going up). Cuts on interest rates not coming as quickly as anticipated. Would wait before buying. Might be a technical bottom soon. 

Doesn't see a lot of growth in the next couple of years. For income stocks, wants to see visibility to cashflow growth to fund dividend and possibly increase. Hasn't yet sold renewable power division, not a great environment for that.

It is in both the alternative and standard energy space but is selling its renewable assets. He is not sure of the prices these will bring in at this point. It could rebuild but big investments are needed in this space. Input costs are higher now and the industry needs electricity prices to go higher.

Tough period the past few years with high debt and poor management. Company needs major overhaul on assets. In the meantime, would not buy shares. High capital requirements with returns not high enough to justify risk. Better names in the sector. 

Disappointing. Valuation is inexpensive which, on its own, doesn't justify an investment. Activists involved, lots of pressure to break up company. Positive things should happen this year. Not ready to give up yet.

Plan is to spin off renewables for someone else to buy. Left with pure-play utility valuation. Path to realized value to at least get back to cost.

Thought with resurging energy prices and the thrust to renewable energy, that the sector would be better. Renewable power still worthwhile. Company and sector got over their skis. He largely sold. Bounce back won't be quick.

Tricky. He bought at $8 and sold at $17 because he didn't like their purchase of Kentucky Electric. Their business is part renewable energy, which is pretty good, and will benefit from strong tailwinds over time, but their assets are average. Their electric utility business brings some stability but little growth. They have major capex to convert utilities from coal. Also, they had debt issues, so they cut their dividend. Their crown jewel--water utility, isn't a huge business, but it's worth a lot and they might sell it. They need to reduce debt and decide whether they want to be about renewables (likely on the chopping block) or electric utility. But the latter has been depressed due to high interest rates in recent years. Take your loss and move on. Doesn't see much upside.

Has since sold shares (January 2023). Company in big trouble with floating rate debt. Recent dividend cut very hard on investors. Renewal power business up for sale, but not getting much interest. Would recommend selling and/or not investing. Dividend also not growing. 

Long term in Canada, utilities rank #16 out of 18; short term it's #15. Took small position based on really good value. Support at $7.75, and $6.84. Decent dividend. Buy 1/2, leave it, then decide if you want to buy more based on strength.

He was a longtime holder until the last CEO left. It was a very well-run business, but they overextended to buy assets in Spain. The structure was complicated. All the independent power producers suffered higher costs for materials as interest rates rose. AQN has new managers who did a strategic review, so AQN appears more stable. Was upgraded today. We may have seen a bottom below $7. 

He is uncertain as to whether to add to it but is interested. It has been in a downward trend with a recent upturn. It is showing a reverse head and shoulders which is a good sign.

Strategic review right now. Don't get in right now. See how the review goes.

He owns the rate reset, preferred shares. Flat this year, but resetting at over 6%. Difficult, contractually, to cut the preferred dividend. If these shares were redeemed, you could make a significant capital gain.

Added at share price below $10. Good time to buy at current share price. Would add more.