Q: What would a good entry price for AQN be?
Do you believe the dividend is safe?
Thanks
Do you believe the dividend is safe?
Thanks
5i Research Answer:
We see AQN as a hold right now given the high debt load that it is carrying. If the stock pulls back to the $7 to $7.50 range unrelated to performance we would see that as more interesting. Over the last twelve months, AQN paid $300.2M in common share dividends while cash from operations was $724.6M. This makes for about a 41% payout ratio from cash flow operations which is quite comfortable, but we do not like the $9B in net debt and negative free cash flow. AQN has plans to cut costs and deleverage which would make us feel better about it. Note the company has cut its dividend in the past (May 2022).