ALGONQUIN POWER & UTILITIES CORP. (Toronto symbol AQN; www.algonquinpower.com) has nearly tripled in size over the last year through a series of acquisitions.

Algonquin made four acquisitions in 2012, and it has completed another four so far in 2013. Most recently, it paid $140.7 million U.S. for a natural gas distributor in Georgia that serves 64,000 clients.

The company’s regulated utility businesses now provide water, electricity and natural gas to over 470,000 customers, up from 120,000 a year ago. In addition, Algonquin’s hydroelectric, thermal energy and wind facilities generate 1,100 megawatts of power, up from 460.

Emera (Toronto symbol EMA), a recommendation of The Successful Investor, our conservative growth advisory, owns 24.5% of Algonquin.

The company is benefiting from these purchases. In the quarter ended June 30, 2013, acquisitions pushed up Algonquin’s revenue to $148.8 million from $58.7 million a year ago. Cash flow per share jumped to $0.18 from $0.11.

The company recently raised its dividend by 9.7% and currently yields 5.0%.

Canadian stock market: Heavy rainfall helps Innergex cash flow jump by 35%

INNERGEX RENEWABLE ENERGY (Toronto symbol INE; www.innergex.com) operates 23 hydroelectric facilities, five wind farms and one solar-power plant in Quebec, Ontario, B.C. and Idaho. Innergex gets 59% of its power from hydroelectric facilities. Wind farms supply 36% and solar generates 5%.

In contrast to Algonquin, Innergex is growing slowly, mostly by building its own hydroelectric and wind plants, rather than through acquisitions.

Innergex makes sure it has firm long-term power-purchase contracts in place before it starts building new facilities.

In the quarter ended June 30, 2013, Innergex’s cash flow jumped 35.7%, to $0.38 a share from $0.28 a year earlier. That was mainly because heavier rainfall increased the amount of power that the company generated. The stock yields 6.3%.

In the latest issue of Canadian Wealth Advisor, we look at the added risk Algonquin Power incurs through its growth-by-acquisition strategy as well assessing the progress Innergex is making with its internal growth policies. We also look at the earnings forecast for the two companies and whether they can keep their dividends high. We conclude with our clear buy-hold-sell advice for both of these stocks.

(Note: If you are a current subscriber to Canadian Wealth Advisor, please click here to view Pat’s recommendation. Be sure to log in first.)

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When you look at power and utility stocks, do you prefer a company that is attempting to speed up its growth—by acquisition or otherwise—or one with a conservative growth strategy? Or do you regard the dividend as a more important consideration than the stock’s growth prospects?