Algonquin Power & Utilities Corp (Symbol-AQN)

Discuss your favourite picks, broker, and trading or investment style.
Post Reply
Taggart
Veteran Contributor
Veteran Contributor
Posts: 6893
Joined: 05 Dec 2005 07:34

Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Taggart »

Despite the glowing reviews from John Heinzl and his analyst contacts, unless I see positive change in the payout ratio covering the dividend coming from either present earnings or free cash flow, AQN won't be going on my watch list any time soon.

------------------------------

Algonquin Power: Why I'm not selling my shares despite stock's volatility

John Heinzl - Iinvestment Reporter
The Globe and Mail
Published Tuesday, Nov. 05 2013, 7:14 PM EST
Last updated Tuesday, Nov. 05 2013, 7:14 PM EST
Taggart
Veteran Contributor
Veteran Contributor
Posts: 6893
Joined: 05 Dec 2005 07:34

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Taggart »

Taggart wrote:Despite the glowing reviews from John Heinzl and his analyst contacts, unless I see positive change in the payout ratio covering the dividend coming from either present earnings or free cash flow, AQN won't be going on my watch list any time soon.

------------------------------

Algonquin Power: Why I'm not selling my shares despite stock's volatility

John Heinzl - Iinvestment Reporter
The Globe and Mail
Published Tuesday, Nov. 05 2013, 7:14 PM EST
Last updated Tuesday, Nov. 05 2013, 7:14 PM EST
Geez, I can't believe it. Someone else actually sees the same thing I'm looking at.

Globeinvestor

David Milstead

Published Wednesday, Nov. 13 2013, 8:02 PM EST
Last updated Wednesday, Nov. 13 2013, 8:02 PM EST

"Indeed, Algonquin’s story is very much about the future, not the past. In taking a tour of the company’s results, I find that its return on invested capital is paltry even by utility-industry standards; in most 12-month periods over the last decade, it fails to top 3 per cent. Similarly, except for a period in 2010-2011, the company’s operating cash flow has failed to cover its capital expenditures and its dividend."
JaydoubleU
Veteran Contributor
Veteran Contributor
Posts: 3103
Joined: 13 Sep 2007 22:52

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by JaydoubleU »

I've been watching AQN closely the last few months. In spite of a lot of analyst hype---we've learned to be very skeptical of analyst hype---I've held off, simply because, other than the yield, other numbers are not impressive. One has to have a great deal of faith in the future, indeed. Not to mention the significant sector risk now.
Londoncalling
Contributor
Contributor
Posts: 165
Joined: 26 Jul 2011 15:51

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Londoncalling »

I have held this for a few years now and it is for the reason above that I tend to watch this stock more closely than others in my portfolio. I would prefer that the company cease dividend increases until it can bring its payout ratio in line.

Cheers
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Shakespeare »

Down almost 10% today. Earnings release rescheduled. A little while ago it was declared not eligible for inclusion in the S&P Dividend Aristocrats.

Was on my watch list. Now isn't.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
2 yen
Veteran Contributor
Veteran Contributor
Posts: 4116
Joined: 09 Apr 2005 09:15

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by 2 yen »

Shakespeare wrote:Down almost 10% today. Earnings release rescheduled. A little while ago it was declared not eligible for inclusion in the S&P Dividend Aristocrats.

Was on my watch list. Now isn't.
And I believe Emera owns 25% of Algonquin, so many people actually own a chunk indirectly.

2 yen
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by AltaRed »

Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
JaydoubleU
Veteran Contributor
Veteran Contributor
Posts: 3103
Joined: 13 Sep 2007 22:52

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by JaydoubleU »

Siskinds LLP Announces Investigation Into Algonquin Power & Utilities Corp
A class action. Marvelous. Tomorrow should see some reply from the nice honest folks at Algonquin.

http://www.theglobeandmail.com/globe-in ... 0306005732
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Shakespeare »

The standard response goes something like "the action is without merit and will be defended vigorously."
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
2 yen
Veteran Contributor
Veteran Contributor
Posts: 4116
Joined: 09 Apr 2005 09:15

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by 2 yen »

JaydoubleU wrote:
Siskinds LLP Announces Investigation Into Algonquin Power & Utilities Corp
A class action. Marvelous. Tomorrow should see some reply from the nice honest folks at Algonquin.

http://www.theglobeandmail.com/globe-in ... 0306005732
Well, that's pretty vague. I wonder what's really up?

2 yen
User avatar
bpither
Contributor
Contributor
Posts: 616
Joined: 05 Jan 2009 08:34
Location: White Rock/Budapest

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by bpither »

I wonder for whom Suskind LLP is acting on behalf of ... must be someone with deep pockets ... dare I say EMERA?
While the common shares dropped 9% the AQN Preferreds didn't move that much ...
"We have two classes of forecaster: Those who don’t know and those who don’t know they don’t know.” John Kenneth Galbraith
User avatar
Shakespeare
Veteran Contributor
Veteran Contributor
Posts: 23396
Joined: 15 Feb 2005 23:25
Location: Calgary, AB

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Shakespeare »

Contingency 1/3 probably. They get $$$$ and the average shareholder gets ¢.
Sic transit gloria mundi. Tuesday is usually worse. - Robert A. Heinlein, Starman Jones
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by SQRT »

Looks like Emera owns 25% of a U.S. sub. Not sure what % of earnings that would represent. Will be interesting what the issue is. Wouldn't write too much into the law suit. Almost automatic when something like this happens. Probably a CFO out of work soon.

When I found out that their head office was in Oakville that raised a red flag for me. Executive probably live in big lakefront homes and don't want the hassle of driving into Toronto for work everyday. A little self serving?
OptsyEagle
Veteran Contributor
Veteran Contributor
Posts: 2240
Joined: 25 Feb 2007 18:59

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by OptsyEagle »

I doubt the drop on Friday had anything to do with the lawsuit. I suspect it is a, sell on the bad gut feeling one gets when a company reschedules an earning release. The CEO probably saw the bad numbers from finance, had an emergency meeting and the CFO and him came up with an ingenious way to cook the books to ensure their 2014 bonus is paid in full. Should only take 3 weeks to rejig the numbers and bury the problem in the notes.

That is my gut feeling as to why these things get reschedule. Most other reasons are listed in the rescheduling news release.
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by SQRT »

OptsyEagle wrote:I doubt the drop on Friday had anything to do with the lawsuit. I suspect it is a, sell on the bad gut feeling one gets when a company reschedules an earning release. The CEO probably saw the bad numbers from finance, had an emergency meeting and the CFO and him came up with an ingenious way to cook the books to ensure their 2014 bonus is paid in full. Should only take 3 weeks to rejig the numbers and bury the problem in the notes.

That is my gut feeling as to why these things get reschedule. Most other reasons are listed in the rescheduling news release.
Total speculation and negative cynical speculation at that. Surprised you would invest at all with this attitude? Anyway, I would think it is more likely an accounting problem (ie the right way to account for some complex transaction). A little surprised it surfaced so late in the process though. What I do know is that if this happened to me while I was working, I would have been fired shortly afterwards.
OptsyEagle
Veteran Contributor
Veteran Contributor
Posts: 2240
Joined: 25 Feb 2007 18:59

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by OptsyEagle »

SQRT wrote:
OptsyEagle wrote:I doubt the drop on Friday had anything to do with the lawsuit. I suspect it is a, sell on the bad gut feeling one gets when a company reschedules an earning release. The CEO probably saw the bad numbers from finance, had an emergency meeting and the CFO and him came up with an ingenious way to cook the books to ensure their 2014 bonus is paid in full. Should only take 3 weeks to rejig the numbers and bury the problem in the notes.

That is my gut feeling as to why these things get reschedule. Most other reasons are listed in the rescheduling news release.
Total speculation and negative cynical speculation at that. Surprised you would invest at all with this attitude? Anyway, I would think it is more likely an accounting problem (ie the right way to account for some complex transaction). A little surprised it surfaced so late in the process though. What I do know is that if this happened to me while I was working, I would have been fired shortly afterwards.
When you have been investing for as long as I have, you can become a little cynical. Just trying to give an explanation to Friday's drop...and todays. If there had been a legitimate reason for the delay of the earnings report, they would have explained it in the rescheduling news release, or at least by today.
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by SQRT »

I agree it hasn't been handled well to this point. These smaller companies just don't have the compliance/investor relations infrastructure bigger companies have and it seems to be showing here. I would doubt the actual issue is as serious as the market fears but who knows?
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13271
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Peculiar_Investor »

From late last night, Algonquin Power & Utilities Corp. Announces Plans to Issue 2014 Fourth Quarter and Year End Financial Results
Algonquin Power & Utilities Corp. wrote:Shortly before the previously scheduled release of its 2014 financial results, APUC became aware of certain anonymous, unproven allegations regarding certain APUC personnel. APUC shared the allegations with its auditors, and delayed releasing its financial results in order to consider, together with the auditors, whether certain of the allegations which related to APUC's financial reporting and related practices could impact its financial results. This assessment, which was led by a committee of independent directors with the assistance of independent legal and accounting advisors, is now complete and APUC will be releasing its financial results, having determined that the allegations did not impact the financial results. The committee's investigation into the allegations which are not related to APUC's financial reporting and related practices is continuing to be dealt with in a confidential manner in accordance with APUC's complaint-handling policies.
The actual results have been issued, see Algonquin Power & Utilities Corp. Announces 2014 Fourth Quarter and Year End Financial Results. I've only occasionally looked at this company and the fundamentals have never given me reason to invest, so I'll leave it to others to weigh in on recent events and potential impacts to investors.
Imagefiniki, the Canadian financial wiki New editors wanted and welcomed, please help collaborate and improve the wiki.

Normal people… believe that if it ain’t broke, don’t fix it. Engineers believe that if it ain’t broke, it doesn’t have enough features yet. – Scott Adams
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by SQRT »

Well, that's interesting. Confirms the old saying of buy on rumour, sell on fact. Still there may be some management issues in the background here. Will watch for a change in senior exec ranks over next few months.
Taggart
Veteran Contributor
Veteran Contributor
Posts: 6893
Joined: 05 Dec 2005 07:34

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Taggart »

Well, John Heinzl still hasn't forsaken his Algonquin. Seems to have worked out well for him.

A dividend darling that has held up well
SQRT
Veteran Contributor
Veteran Contributor
Posts: 5441
Joined: 01 Nov 2012 11:33
Location: Ontario/Arizona

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by SQRT »

Taggart wrote:Well, John Heinzl still hasn't forsaken his Algonquin. Seems to have worked out well for him.

A dividend darling that has held up well
It has performed fairly well over past 12 months despite the kerfuffle earlier in the year. Will probably buy more on Jan 4 for TFSA.
Taggart
Veteran Contributor
Veteran Contributor
Posts: 6893
Joined: 05 Dec 2005 07:34

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Taggart »

SQRT wrote:
Taggart wrote:Well, John Heinzl still hasn't forsaken his Algonquin. Seems to have worked out well for him.

A dividend darling that has held up well
It has performed fairly well over past 12 months despite the kerfuffle earlier in the year. Will probably buy more on Jan 4 for TFSA.
Hope Algonguin continues to work out well for you SQRT.
Davis
Contributor
Contributor
Posts: 291
Joined: 15 Nov 2014 07:24

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by Davis »

There seem to be differing views in AQN's payout ration. Heintzl thinks it's conservative, while other say it's over 100%. Does anyone know the right answer?
JaydoubleU
Veteran Contributor
Veteran Contributor
Posts: 3103
Joined: 13 Sep 2007 22:52

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by JaydoubleU »

AQN is my largest holding. I bought it because I wanted exposure to diversified renewables and also water utilities--there are very few ways to play the water theme that aren't highly speculative. Bought more when they converted dividends to US dollars: I like that most of their assets are in the US; it gives me a good proxy play.

AQN pays dividends from FFO not EPS. In the last quarter, they reported adjusted net EPS of 0.05 and adjusted FFO of 0.22. Dividends were 0.13, so about a 60% payout ratio on this measure. Very impressive was the growth in just about every category: revenue of $189 million vs $151; adjusted EBITDA of $70.2 million vs $41.4.

Most encouraging is that they have a lot of projects coming on stream in the next few years, which should enable them to continue their target of 10% annual dividend growth.

Until the share price rises to a level I find "absurdly overvalued," or the Canadian dollar shows signs of returning to par (thus decreasing the dividends in CAD), I'll be holding AQN and enjoying the ride.

Edited for grammar :roll:
JaydoubleU
Veteran Contributor
Veteran Contributor
Posts: 3103
Joined: 13 Sep 2007 22:52

Re: Algonquin Power & Utilities Corp (Symbol-AQN)

Post by JaydoubleU »

Not to be outdone by the big Fortis deal, Algonquin announces its own acquisition:

http://business.financialpost.com/inves ... llion-deal

The market appears to have disliked it a little less than the Fortis deal, but still AQN dropped .

But debt is cheap, and growth is dear. Haven't heard any analyst reactions yet to AQN's move.

But the same noises made to soothe investors: "this deal will support our dividend growth program, etc."
Post Reply