Algonquin’s high dividend yield is supported by strong cash flow generation. It’s not only sustainable but also has substantial room to grow given its low payout ratio.
Meanwhile, the company plans to spend $2.5 billion between 2025 and 2027 on upgrades to its regulated utilities. That will continue to lift its cash flow even further.
ALGONQUIN POWER & UTILITIES (Toronto symbol AQN; www.algonquinpower.com) completed the sale of its 42.2% ownership stake in Atlantica Sustainable Infrastructure plc in December 2024 for $1.08 billion (all figures in U.S. dollars). Algonquin also sold its non-regulated renewable energy business to LS Power in January 2025 for up to $2.5 billion.
Today, Algonquin focuses entirely on its regulated utilities, which supply electricity, gas, water distribution and wastewater collection services to 32 million customers in Canada, the U.S., Chile and Bermuda.
In the three months ended September 30, 2025, revenue rose 1.7%, to $582.7 million from $573.2 million a year earlier.
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Cash flow jumped 24.9%, to $171.3 million from $137.1 million. Due to more shares outstanding, cash flow per-share rose at a slower rate of 22.2%, to $0.22 from $0.18. Cash flow rose on the higher revenue as well as lower expenses including interest.
Algonquin’s planned spending will raise the company’s cash flow
Due to asset sales, Algonquin cut your quarterly dividend by 40.1% with the October 2024 payment. The new annual rate of $0.36 nonetheless yields a solid 4.1%. Moreover, the
dividend payout ratio represents a more sustainable 60% to 70% of annual earnings in the long term.
Meanwhile, Algonquin now plans to spend $2.5 billion between 2025 and 2027 on upgrades
to its regulated utilities. That will continue to lift its cash flow.
Recommendation in Dividend Advisor: Algonquin Power & Utilities Corp. is a buy.
