High-quality operations offset acquisition risk

Article Excerpt

ALGONQUIN POWER & UTILITIES CORP. $14 (Toronto symbol AQN; High-Growth Dividend Payer Portfolio, Utilities sector; Shares outstanding: 473.9 million; Market cap: $6.6 billion; Dividend yield: 4.9%; Dividend Sustainability Rating: Above Average; 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. The company last increased its quarterly dividend with the July 2018 payment. Investors now receive $0.1282 U.S. a share, up 10.0% from $0.1165 U.S. The new annual rate of $0.5128 U.S. yields a high 4.9%. In the third quarter of 2018, Algonquin’s revenue rose 3.6%, to $366.5 million from $353.7 million a year earlier (all amounts except share price and market cap in U.S. dollars). Revenues increased as a result of higher production at some of its facilities, along with the addition of a new solar facility in the U.S. Excluding one-time items, earnings in the quarter declined 4.4%,…

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