RE:Financial ratios comparison to AlgonquinYou are right its proven , but the real difference is AQN has solid senior executive team they know how to acquire and market their business and grow and add a value to share holders , ALA has team of idiot monkey lairs in spite of excellent assets
now ALA has new CEO i think he has to start cleaning the house from the CFO to some senior executives and the replacement of BOD by the voters
james1975 wrote: It is interesting to see how Altagas now stacks up against Algonquin Power and Utilities, a similar business, in terms of value. Altagas is a market outcast to some extent and Algonquin is a market darling.
They have very close market caps:
Altagas $4.3 billion
Algonquin $4.8 billion
(All the numbers are taken from 2019 projections from a big six bank analyst piece that came my way the other day.)
But Total Assets show that Altagas has close to twice the assets:
Altagas $19.8 billion
Algonquin $10 billion
And Total debt shows that debt is less than twice as much for Altagas:
Altagas $7.2 billion
Algonquin $4.2 billion
Giving Altagas a better debt to capitalization ratio:
Altagas 49%
Algonquin 52%
The book values diverge enormously, despite having the same market cap:
Altagas $19.30 per share
Algonquin $6.80 per share
And the AFFO/share diverges enormously, despite having virtually the same share price currently (both are in the mid 14's)
Altagas $2.77
Algonquin $0.82
And the AFFO payout ratios therefore are vastly different:
Altagas 34.7%
Algonquin 67%
The conclusion I reach from looking at the metrics are these:
1) Altagas and Algonquin are carrying quite similar debt levels overall compared to the size of their assets (2019 numbers).
2) Altagas is paying out approximately half the cashflow that they could in the form of a dividend compared to Algonquin, and this could be increased by approximately 100% in the future just to match Algonquin's payout ratio.
3) A purchase today gets Altagas for much less than book value, whereas Algonquin trades for more than twice book value, for quite similar business profiles.
My overall conclusion is that Altagas is very cheap today compared to Algonquin.
Any comments/constructive criticisms/alternative interpretations of the data are welcomed.