ALGONQUIN POWER & UTILITIES CORP. (Toronto symbol AQN; www.algonquinpower.com) has nearly tripled in size over the last year through a series of acquisitions.
The company’s regulated utility businesses now provide water, electricity and natural gas utility services to over 470,000 customers, up from 120,000 a year ago. Its hydroelectric, thermal energy and wind plants currently generate 1,100 megawatts of power, up from 460 megawatts.
Emera (Toronto symbol EMA), a recommendation of The Successful Investor, our conservative growth advisory, owns 24.5% of Algonquin. We reported on Emera’s own expansion projects a week ago. (View the post here.)
Dividend stocks: Algonquin raises dividend by almost 10%
Algonquin made four acquisitions in 2012, and it has completed another four so far this year. Most recently, the company bought a natural gas distribution utility in Georgia serving 64,000 customers for $140.7 million U.S.
These moves are paying off. In the quarter ended March 31, 2013, acquisitions pushed up Algonquin’s revenue sharply, to $196.7 million from $63.4 million a year ago. Cash flow per share also jumped, to $0.23 from $0.09.
The company just raised its dividend by 9.7% and yields 4.9%.
In the latest issue of Canadian Wealth Advisor, we look at the risks that come with Algonquin’s rapid series of acquisitions. We also examine the company’s prospects for cash flow and further dividend increases. We conclude with our clear buy-hold-sell advice on the stock.
COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members
Many investors are content to stick with big utilities like BCE or Emera. Do you think there is an advantage to be gained in investing in smaller, somewhat riskier utilities like Algonquin Power?
Comments
earl
AQN.to has been a ContratheHeard recommendation (both Benj and Ben, I think, for several years, and is up about 60% since first recommended. A good selection
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AQN.to has been a ContratheHeard recommendation (both Benj and Ben, I think, for several years, and is up about 60% since first recommended. A good selection