Asset sales further support their dividends

Article Excerpt

Concerns over their high debt levels, combined with rising interest costs, have hurt the shares of these two green-energy producers. However, both are selling less-important assets to pay down their debt. That will help them maintain their current dividend rates for shareholders. ALGONQUIN POWER & UTILITIES CORP. $6.94 is a buy for long-term gains. The company (Toronto symbol AQN; High-Growth Dividend Payer Portfolio, Utilities sector; Shares outstanding: 687.8 million; Market cap: $4.8 billion; Dividend yield: 8.6%; Dividend Sustainability Rating: Average; has two main businesses: the Regulated Services Group provides regulated electricity, gas, water distribution and wastewater collection services in Canada, the U.S., Chile and Bermuda; and the Renewable Power Group produces electricity from about 40 clean-energy plants in North America. To conserve cash for its planned purchase of Kentucky Power Co. for $2.65 billion U.S., Algonquin cut your quarterly dividend by 40.0% with the April 2023 payment, to $0.1085 U.S. from $0.1808 U.S. The new annual rate of $0.434 U.S. nonetheless yields a high 8.6%….