From TD this morningAQN to Refile for Kentucky Power Approval; Dividend Cut by 40% Sean Steuart, CFA John Mould, CFA
Event Algonquin Power & Utilities released a corporate update this morning ahead of a call with investors.
AQN and AEP are committed to the Kentucky Power transaction. The parties will file a new FERC application in the near-term.
40% dividend cut. The annual dividend (paid quarterly) has been cut to $0.434/ shr as of April (previously $0.7232/share). We anticipated a 50% reduction based on a more conservative payout ratio policy. Conference Call: Today at 8:00 a.m. ET: 1-800-806-5484 or 416-641-6104, ID 3616196 (link to webcast, slides) .
Impact: SLIGHTLY NEGATIVE While the dividend reduction helps to right-size the payout ratio, many elements of the company's plans have not been detailed. The company did not provide longer-term EPS growth targets (previously 7%-9% five-year EPS CAGR), or context regarding its longer-term capital and funding plans.
We believe the Kentucky Power acquisition remains unpopular with many investors; the company remains committed to the pursuit of this transaction