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Algonquin Power & Utilities Corp T.AQN

Alternate Symbol(s):  AQN | T.AQN.PR.A | AGQPF | T.AQN.PR.D

Algonquin Power & Utilities Corp. is a Canada-based diversified international generation, transmission, and distribution company. The Company through its two business groups, the Regulated Services Group, and the Renewable Energy Group, provides sustainable energy and water solutions through its portfolio of electric generation, transmission, and distribution utility investments to over one million customer connections, largely in the United States and Canada. The Company is engaged in renewable energy through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities. The Company owns, operates, and/or has net interests in over four gigawatts (GW) of installed renewable energy capacity. The Company is focused on its expanding global pipeline of renewable energy and electric transmission development projects, organic growth within its rate-regulated generation, distribution and transmission businesses, and the pursuit of accretive acquisitions.


TSX:AQN - Post by User

Comment by Capharnaumon Oct 08, 2022 2:24pm
168 Views
Post# 35014178

RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Phew, am I ever relieved...

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.

.
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.
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