Algonquin Power & Utilities Corp T.AQN

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

Utilities Utilities - Diversified

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.

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Algonquin Power & Utilities Corp

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Post by retiredcfon May 13, 2022 8:35am

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Post# 34680783

TD

Currently have a US$17.00 target. GLTA

Algonquin Power & Utilities Corp.

(AQN-N, AQN-T) US$13.40 | C$17.47

In Line Q1 With Kentucky Purchase On Track; 6% Dividend Bump

Event

Algonquin Power & Utilities Corp. reported Q1/22 results last night.

Q1/22 adjusted EPS of $0.21 matched both our forecast and the consensus estimate. Q1/22 adjusted EBITDA of $330.6 million was close to both our estimate of $329.3 million and the consensus forecast of $334.8 million.
Dividend increase of 6% announced. Algonquin's annual dividend (paid quarterly) increases to US$0. 7233/share – up from US$0.6824/share. We expected a 7% dividend increase.

Conference Call: Today at 10:00 a.m. ET: 1-888-330-2454 or 240-789-2714, ID 5079453 (link to webcast).

Impact: NEUTRAL

Q1/22 EPS matched both our estimate and the consensus forecast. The 6% dividend increase was slightly below our expectations. Algonquin has a long-term 8090% dividend payout ratio target based on adjusted EPS (a 6% increase implies a 96% payout ratio for fiscal 2022). Algonquin's payout ratio target implies dividend growth of ~6% CAGR over the next five years. The Kentucky Power acquisition remains on track for a Q2/22 closing, following the Kentucky PSC's approval (with conditions) on May 4.

Details

Q1/22 operating results. Contributions from both the Regulated Services and Renewable Energy segments were slightly above our expectations, mitigating administration expenses that exceeded our forecast. Renewable Power generation was just 1% below long-term averages; higher-than-forecast HLBV income mitigated Renewable Energy segment price realizations that were below our forecast.
No update regarding Algonquin's 2022 guidance was referenced in its filings. Management previously guided to full-year 2022 adjusted EPS of $0.72- $0.77 (implied y/y growth of ~5% at the midpoint). Similar to some previous quarters, we anticipate that the company will reaffirm 2022 guidance on this morning's conference call (Algonquin did not provide guidance commentary in its Q2/21 filings but reaffirmed 2021 guidance on that conference call).
Kentucky acquisition update. On May 4, the Kentucky PSC approved Liberty Utilities' planned acquisition of Kentucky Power, subject to certain conditions. The Kentucky PSC has also approved the replacement of the Mitchell operating agreement. FERC and West Virginia PSC approvals are also required. Algonquin continues to anticipate a Q2/22 closing of this transaction (pending outstanding approvals).