Algonquin balances risk and growth

Article Excerpt

Algonquin Power continues to expand through big acquisitions, which adds risk. Still, it partially offsets that with acquisitions that add immediately to its cash flow—plus, its renewable energy projects sell their power under long-term government-guaranteed contracts. The company’s international expansion also reduces its geographic risk. ALGONQUIN POWER & UTILITIES $14.16 (Toronto symbol AQN; Shares outstanding: 470.6 million; Market cap: $6.6 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.7%; www.algonquinpower.com) operates through two main businesses: The Generation Group produces and sells electricity from 35 clean energy facilities across North America; and the Distribution Group provides regulated electricity, natural gas, water distribution and wastewater collection services. In the quarter ended September 30, 2018, overall revenue rose 3.6%, to $366.5 million from $353.7 million a year earlier. (All figures except share price and market cap in U.S. dollars.) Cash flow improved 22.4%, to $127.7 million from $104.3 million. However, on more shares outstanding due to acquisitions, cash flow per share was unchanged at $0.27. In the past few…

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