Investment Q&A

Q: Any reason for the increase in AQN yesterday and pre-market this morning ?

Q: Holding AQN in a dividend portfolio and down like many others. Pondering a switch to BEPC and looking for your thoughts on this move based upon prospects for total return over the next 2-3 years. I understand that in these situations looking forward is what matters but must admit I think my bitterness at the fall of AQN might be clouding my rationality a bit.

Q: Wondering what the current status of the AQN takeover of Kentucky Power is and if you have an opinion on the likelihood of its successful completion. As a AQN stockholder I feel it might be better if it was terminated but I’m sure AQN feels it can’t say that publicly. Is there a firm deadline for a decision? Comments?

Q: Do you foresee any share price growth over the next year? Two years?

6% is still a large dividend. Is it sustainable?

Is their debt manageable?

Q: I have an unregistered account with about 12 CDN blue chip stocks. The purpose of the account is to generate dividend income for the next several decades, while providing slow and steady capital growth.

I have taken the decision to exit ENB, LIF, NTR and TCL.A and to increase holdings in AQN, NPI, PMO205, XTR.

I know timing will never be perfect, but just looking for some timing guidance due to current market conditions and cyclicality of some of these stocks.

Trying to avoid horrible hindsight commentry: that was OBVIOUSLY a poor time to make that change....

Q: Keeps climbing while it seems to me that it's getting expensive compared to other utilities. I currently own AQN, BEP and BIP. Is AQN a keeper or replace with NPI or another?

Thx

Yves

Q: My Tfsa has the following three losers (each down by 50%). Are these sell, hold or buy more with new money?
Thank you

Q: Hi, I’m curious and very intrigued as to how an AQN takeover might happen. Could it be bought whole and if so who has the resources to pull this off? I’m thinking Brookfield/ BEPC or perhaps another Private Equity company like KKR? Or could it be sold off in parts perhaps renewables to a NPI or Brookfield and the Power Gen/Transmission/Water to a Fortis? Thanks in advance.

Q: Hello All,

Is it possible to rank my list of utility companies sorting via most financially vulnerable therefore most likely to underperform because of the increased cost of financing. i.e worst to best please.

Is that a blunt but reasonable filter?

Could it be that the "worst" companies have been so badly beaten up that they may be worth adding to for the long haul?


Many thanks

Q: Is AQNU a good buy today? What would total return be at today's price in June 2024?
Thanks
Cec

Q: What is your opinion of the management team at AQN? Do they have a strong enough team to orchestrate a turnaround of their fortunes? Is this a hold or sell?

Q: I'm not sure if you planned to take in the conference call today or not. RBC put out a one-pager on what Mgmt planned to do, which included a 40% cut to their dividend (creating a new yield of 6%).

Q#1 = As a result of Mgmt's plans going forward, what are your thoughts on AQN now?

I am fortunate that I bought AQN years ago at $5.60 (held in RRSP) and have trimmed (for asset allocation reasons) several times on the way up...as high as $21.10. However I do confess I added recently at $14.75. I still have some funds ready to top-up, but I am on hold for now...just watching.

Q#2 = would you add, hold or sell at this time?

Q#3 = my personal speculation is that AQN will probably just hang around the $9-10 range for a while. My hope is that a potential buyer will show up and take them out. In a November question, you thought the take-over chance was around 25%. With this new information in hand, do you have a new percent chance that they will be bought out?

Q#4 = if AQN does get taken out, would the usual ballpark premium of 30% apply? This would entice me to hang around for awhile.

Thanks...much appreciated.

Q: what is your opinion of AQN going forward long-term now that they have cut their dividend?

Q: I don't understand. A recent 5i answer on AQN stated:
"On an operating cash flow basis, the dividend was still coverered in the 12 months to Sept 30."
As I look at the Balance & Income Sheets as of Q3:
Working capital is $-579,890,000
Net income for the 3 quarters this year is $-182,000,000.

AQN will payout $0.92 per share in dividends for the year. They've already committed to $0.22 for Q4
676 million shares x $0.92 = $616,400,000 payable in dividends for the 2022 year ($154,000,000 to be paid in Q4)

Somehow, somewhere isn't it true that the dividend payments must be impacting that negative working capital, the negative net income, the increasing debt amount and increasing interest to service the debt? In essence, aren't the dividends coming from borrowing, whether directly or indirectly?

Thanks, always appreciate 5i's perspective.

Q: hi folks:

what am i missing here?

time and again, when a dividend company comes under pressure (in this case AQN) all the wags talk about 'soaring and unsustainable dividends'

this clip from today:

Yes – Algonquin’s juicy dividend. The drop in share price has caused Algonquin’s dividend to soar. As of the time of writing, the stock is down over 50% year to date, while the dividend yield has swelled to 10.93%.

That’s an insane, if not unsustainable, dividend yield. Even if Algonquin were to slash its dividend in half, it would still offer a very competitive yield, and still one of the better-paying options on the market.


the dividend $ has NOT changed; only the yield as a % of share price has

either the company can support the dividend or it cannot

my point: a dividend is a reflection of the strength of the balance sheet and the companies cashflow

that the price gets knocked in half is irrelevant to the dividend paid

UNLESS said bal/sht and cashflow will no longer support the divy at that amount

(yes, i understand that the current price reflects people's belief that the balance sheet cannot continue this level of dividend)

so, are these type clips just sensationalizing or am i completely wrong?

again.........

thx

happy new year team

Q: hi. I am still holding AQN. it represents about 3% of my portfolio now. I am considering selling. can you provide me 5 names of dividend companies ( dividends 3.5% or higher please) that you feel will have decent growth ( hopefully gaining back the capital loss from AQN's slide). they do not have to be sector specific, just your highest conviction names, regardless of sector.
cheers, Chris

Q: Hello Peter

Best wishes for the Season

I owne the above in my non taxable accounts with a considerable loss. I am a senior who tended to invest in growth stocks with some sucess exept in the last 12 months.
I consider that above list has some potential for recovery.
I would like to concentrate on the bests with the greatest potential recovery in 2023.
I will appreciate your advice on the stocks I could sell or add on or replace.
I always value your opinion
Raouf

Q: Hi Peter, Ryan, and 5i Team,

Sorry for yet another Brookfield question! In my RRIF, I hold these three Brookfield entities: BEP.UN, BN, and BAM.

As a retired investor who likes dividends, and is underweight in utilities (due to recently selling AQN) and is overweight in financials, would you endorse selling BN and BAM, and using the proceeds to buy more BEP.UN? Or is there a flaw in my thinking?

Thanks as always for your timely advice, and happy holidays to everyone at 5i.

Q: At what price could this stock could represent a reasonable" Buy" ?

Q: Hi 5i
I think Peter has been around long enough to remember December 1999 when TRP cut its dividend from 1.20 to .80 and the stock tanked to under $10. More recently ALA made a deal to buy WGL and issued shares at $31 ( I think Caisse depot or other big guys were in for $400 million). ALA went down to around $11 and recoverd to over $28 recently. So my question is: do you see any similarities to TRP or ALA turnarounds to think that AQN ($9.50) could follow a similar chart?
Thanks, Greg