RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Phew, am I ever relieved...TickerTwit wrote: The regulated side of the company acts as insulation against cash flow losses, but as you say, who the heck knows. Even regulated business can go sour with a radical change in government policy.
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SargeX wrote:
I also don't think AQN will cut their divy but who the heck knows.
It's a myth that government policy change can make "regulated business" go sour. They might not see the anticipated growth and public share price may suffer, but the cashflows behind still represent the invested money.
The negociation in price is due to the change in interest rates, which lowers the real return of the purchase and thus warrants a lower rate base multiple for the acquisition.
Imo, since AQN had a big investment pipeline which was part of their strategic plan, the question is what they will do with it in a higher rate environment. A project that did 8% real return has now shrunk to 4% real return and may not be as attractive and accretive, especially if financing requires issuing shares.
Long term, AQN should profit from higher rates, since it should increase their rate base returns.