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Innergex Renewable Energy Inc. (INE)
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Capstone Infrastructure Corporation cumulative five-year rate reset preferred shares series A (CSE.PR.A)
Q: Hi, I live in BC where the above companies were just awarded 3 wind projects each totaling about 550MW with 30 year electricity purchase agreements from BC Hydro. (First Nations will have at least 51% ownership of the projects.) Both companies pay a good dividend, but seem to have seen better days. I am just wondering whether you answer questions about companies this small and if so what do you think of their current state of affairs and prospects for the future?
5i Research Answer:
CSE was acquired in 2016 so is no longer public and we do not folow the common shares. However its preferred shares still trade following the acquisition. INE is $1.6B market cap and certainly qualifies. Like most in the sector it has a high debt level. Cash flow is good, but it lost money in 2023 and likely last year (when numbers come in). 11c per share is expected this year. The stock has not done much, but we would consider it decent enough. Revenue continues to grow and has doubled since 2019. Hydro Quebec owns 19.9% of the company. The Q3 was good but we would note that estimates have been ticking down. In the energy sector, it would not be our favourite but we would not consider it too bad overall for small cap investors.